How Direct Debit is used in Europe
Direct Debit in Europe is broadly similar to Direct Debit in the UK, but there are a few important differences.
Direct Debit in Europe comes under the remit of the European Single Payments Area (SEPA) an EU initiative designed to make cross-border cashless payments seamless. Within this, the European Payments Council (EPC) has created three payment schemes, one of which is SEPA Direct Debit (SDD). SDD aims to make cross-border payments faster, cheaper and more secure.
Payments must be made and collected in euros, not Sterling, and as from 31st October 2016 all UK businesses collecting Euro-denominated payments (whether in the UK or Europe) will be required to migrate to the SEPA Direct Debit Scheme.
Unlike the UK, the SDD is split into two parts. SEPA Core Direct Debit is for B2C customers while SEPA B2B Direct Debit is, as the name suggests, for business to business transactions. Bear in mind that the B2B scheme is optional, so not all banks will offer it.
The B2B scheme gives payees no right to a refund, while B2C gives payers up to 13 months. The mandate process may also vary, with the payer having to send a copy to their bank.
Bank details for SDD transactions are also different. Rather than the sort code and account number, businesses will require the customer’s Bank Identifier Code (BIC) and International Bank Account Numbers (IBAN). Mandates must be in the payer's language.