What is a SEPA Direct Debit?
The SEPA direct debit is a practical payment instrument that allows companies to easily collect regular payments from private or business customers from their account while keeping track of regular payments.
In this overview, we answer the most important questions about the SEPA Direct Debit:
- How does a SEPA direct debit work?
- How can I pay by SEPA direct debit?
- What are the advantages and disadvantages of the SEPA Direct Debit?
How does a SEPA direct debit work?
A SEPA direct debit is effected by a written agreement, the SEPA direct debit mandate, between the payee (creditor) and the debtor (customer). Digitally, this is also simply valid without a signature.
A SEPA mandate contains the customer's IBAN and a unique mandate reference defined by the recipient. Direct debits can thus be clearly assigned to a direct debit mandate that has been issued.
Before the direct debit is made, the bank sends an advance notice informing the customer of the amount and due date. On the due date, the amount is simply debited from the debtor's account and transferred to the creditor's bank account.
How can I pay by SEPA direct debit?
To pay by SEPA Direct Debit, payers must give written or electronic consent to the creditor.
The creditor then stores the information from the mandate in its system and collects the agreed amount on the specified date.
To do this, the company needs a unique creditor identification number, which it can apply for from the Bundesbank.
Show transcription
[On Screen: Intro: the SEPA-Transfer logo with the German tagline “SEPA-Zahlungen automatisieren und Zeit für wichtige Arbeit sparen” (automate SEPA payments and save time for important work).]
Managing a high volume of SEPA payments without any fuss? SEPA-Transfer is your banking tool focused on the functions that really matter.
SEPA transfers can occur regularly. If you have to send an invoice to the same supplier once a month, perhaps only the amount and the payment reference change — the IBAN stays the same. SEPA-Transfer enables convenient and secure transfers via its interface: the transfer is saved as a template; for the next payment you only need to load the template and adjust the amount and payment reference. That saves an enormous amount of time.
[On Screen: “Handy templates”: a booking form with recipient, IBAN, BIC, amount, payment reference, execution date, and SEPA Purpose Code, saved as a template and loaded again.]
Organize your payment data in Excel tables, in a CSV or a SEPA XML file. Import the data into SEPA-Transfer as a batch with ease. To do so, click on “Import/Export” and here on the import wizard. Select your file type and booking type.
[On Screen: The SEPA-Transfer import wizard with a choice of booking type (credit transfers or SEPA direct debits).]
SEPA-Transfer supports both SEPA credit transfers and SEPA direct debits, individually and in batches. If, at the end of the month, you want to pay salaries to all your employees, that is extremely fast with SEPA-Transfer. Select “Credit transfers” and make sure the row mapping is correct. SEPA-Transfer recognizes the columns directly and maps them correctly to the transfer.
[On Screen: The column mapping assigns the Excel columns to SEPA fields (recipient, IBAN, amount, payment reference, execution date, and more), with a data preview.]
After the import, you see all open transfers in a list. You can also import SEPA direct debits as a batch, for example to regularly collect membership fees as the treasurer of an association. Import your payment data and then select “SEPA direct debit”. The mandate reference uniquely identifies the SEPA mandate; SEPA-Transfer can import these as well or create them automatically. Finish the import, and you see all bookings in the usual view.
[On Screen: The “Handling invalid transactions” wizard, and the management of mandate references and SEPA mandates.]
With SEPA-Transfer, forward bookings straight to your bank, in an HBCI- or FinTS-compliant way. Click on “Send bookings” and select the open bookings you want to send. Enter your PIN. SEPA-Transfer supports several TAN methods — besides the classic list-based TAN method, also iTAN, mobileTAN, smartTAN, and chipTAN. Then just send it off.
[On Screen: “Secure online banking”: the online-banking dialog (HBCI/FinTS) with PIN and TAN entry and the confirmation “Online banking successful”.]
Open your account in SEPA-Transfer. Here you can narrow down the time periods in a clear list. If you are looking for unusually high amounts, you can filter for bookings of, say, more than 500 euros. This way you keep a clear overview of your payments.
[On Screen: “Smart management”: a list of account transactions with filters by period and amount to spot irregularities.]
Would you like to give your tax advisor access to the last week's account transactions? Simply export the data as a PDF or print it directly from the interface.
How can you use SEPA-Transfer for your payments? Why not try it out — with our 30-day trial version.
[On Screen: Closing screen with the SEPA-Transfer logo and the address www.jam-software.com.]
Advantages of the SEPA Direct Debit
- Convenient and simple payment method for recurring direct debits.
- Reduced administrative burden for companies and customers when making payments.
- Payers can request a refund within eight weeks if required.
- Overview of upcoming payments through advance notice.
Disadvantages of the SEPA Direct Debit
- Customers must ensure that there are sufficient funds in their account to enable the direct debit.
- Possible incorrect debits require a reclaim, which is possible up to eight weeks after the debit.
- Disclosure of bank data entails a low security risk.
Questions and answers about the SEPA direct debit
Is a SEPA direct debit the same as paying on account?
No, SEPA direct debit is not the same as "paying on account".
In the case of a direct debit, the payment amount is debited directly from the debtor's account after the debtor has given consent (direct debit mandate) to the creditor.
"Paying on account", on the other hand, means that the customer first receives the goods or services and later receives an invoice, which he must then pay within a certain period.
Is there a difference between SEPA and direct debit?
SEPA stands for "Single Euro Payments Area" and is a system for cross-border euro payments within 36 European countries.
The SEPA direct debit is only one of the payment options within the SEPA system. However, a direct debit can also exist outside the SEPA system and usually refers to national payments in a specific currency.
Does the SEPA Direct Debit pose a risk?
A direct debit is generally a secure payment method.
SEPA offers private customers a right of return of eight weeks in the event of unjustified debits or errors. Customers should therefore check their account statements regularly to ensure that all direct debits are correct and that there are enough funds in their account. In addition, a regular check helps to keep track of everything.
In addition, customers should be careful who they simply give a mandate to in order to avoid potential abuse.
So, on the whole, direct debit is a reliable and practical payment method for recurring payment transactions.
Want to Give SEPA-Transfer a try?
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