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) created the SEPA Direct Debit payment scheme, which aims to make cross-border payments faster, cheaper and more secure.
Unlike the UK, the SEPA Direct Debit is split into two parts.
• SEPA Core Direct Debit which is for B2C customers, and
• SEPA B2B Direct Debit which, as the name suggests, is for business to business transactions.
It’s important to bear in mind, however, that the SEPA B2B Direct Debit scheme is optional, so not all banks will offer it.
The SEPA B2B Direct Debit scheme also gives payees no right to a refund, while the SEPA Core Direct Debit scheme gives payers up to 13 months.
SEPA standardises the way automated payments are made across Europe, however, and both payment schemes allow European consumers and businesses to make and receive the following transactions equally:
• Credit transfers
• Direct Debit payments
• Card Payments
The aim, quite simply, is to make cross border payments in Euros as easy as domestic payments.
The advantages of SEPA are:
• A single system from both domestic and cross border bank transfers
• Allows cross border transactions by Direct Debit
• Allows a single UK bank account to accept salaries or pay bills in a new country
• Delivers cheaper, safer, and faster cross border payments
The SEPA project was introduced by the European banking and payment industry represented by the European Payments Council (EPC.)
It might sound a little complicated at first but it really isn’t. If you’re interested in collecting payments from customers in the EU, talk to us now and we’ll guide you through the most suitable process.