The SEPA Direct Debit is a payment initiated by the creditor based on prior authorisation, i.e. the mandate given by the debtor. A general mandate will be used for recurring payments and a unique mandate for one-off payments.
SEPA Direct Debits will be used for one-off or recurring euro-denominated direct debits within the SEPA area.
Features of the SEPA Direct Debit:
- the debtor must give the creditor an authorisation or “mandate”. This mandate will be stored by the creditor;
- the creditor will not be able to initiate a payment unless it has an authorisation from the debtor;
- the creditor will issue its payment order at least five business days (for a first or one-off payment) or two business days (for recurring payments) before the debit date. On the due date, the debtor’s bank will transfer the funds to the creditor’s bank;
- a field of up to 140 characters will be used to forward remittance data in full and without alteration right up to the beneficiary;
- IBAN and BIC will be used to identify the debtor’s account (as in the SEPA Credit Transfer);
- the debtor may ask its bank to reimburse a SEPA Direct Debit after settlement. It may do so within a period of up to eight weeks following the debit date if the direct debit was executed using a valid mandate, and up to 13 months in the absence of a valid mandate. In the event of a reimbursement, the debtor shall nonetheless not be relieved of its obligations to the creditor.