What is SEPA Direct Debit?

The Single Euro Payments Area (SEPA) is a payment network that makes it easy and cheap to process euro payments in the European Union (EU). SEPA Direct Debit is a specific payment scheme within SEPA that is used for regular payments such as for subscriptions and bills. Like all SEPA payments, these transactions must be in euros, and payments are bank to bank.

SEPA Direct Debit is quite straightforward: the creditor issues a contract called a “mandate” with all the details necessary about the direct debit. Once the customer consents, the merchant pulls the payments on a regular basis, notifying the customer before the payment is due. See this guide for a more comprehensive overview.

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