While you’ve likely heard of SEPA direct debit (SDD), you might not know about SEPA direct debit for business (SDD B2B).
Standing for “Single Euro Payments Area,” SEPA is used by almost all of the European Union’s member states for cashless payment transactions within the EU.
Read on to find out about the crucial differences between SEPA SDD B2B and the “core” SEPA SDD.
| 👀 Centralized ⚙️ Automated |
Direct debit collection directly in Qonto. Visualize all your cash flow in a single place - SDD sits alongside other in+outflows. |
| ⏰ Time saving |
Standard direct debit collection directly in Qonto. No need to juggle multiple tools, no time wasted switching between apps - everything in one place. |
| 💸 Faster payments |
Make sure you get paid on time. Receive money in your account faster by doing it directly in Qonto. |
| ⚒️ Integrate with existing tools | Standard direct debit collection via EBICS: are you using an ERP to invoice your customers? Connect it to your account and start collecting direct debits directly in Qonto. |
The SEPA direct debit system was implemented in 2014 and has since then been used for electronic transactions within the EU. In addition to the 28 EU states, Norway, Switzerland, Iceland, Liechtenstein, Monaco and San Marino also support the SEPA Direct Debit Scheme.
Before SEPA, each EU member state had its own payment and transfer system. Under this scheme, anyone who wished to make a cross-border payment was not able to do so as seamlessly as they can now.
The IBAN is the most important aspect of SEPA direct debit. This is your International Bank Account Number and is the account number belonging to account holders in nearly every SEPA member state.
You also have a BIC (Bank Identifier Code), which is designed to make bank identification easier.
When collecting a SEPA payment, you will also need a direct debit mandate or company direct debit mandate.
Direct debit turnover in 2022
SEPA core direct debit allows individuals to make transfers in Europe more seamlessly than before.
When making payments in the B2C sector, core direct debit is ideal for recurring payments for things like rent, phone, electricity bills, or insurance premiums. The payments will come straight from your account without you needing to confirm or sign anything.
You’ll see this kind of payment procedure all across the online commerce sector. The SEPA mandate authorizes the collection of the amounts due. Without it, you as the beneficiary can’t collect the money you’re owed.
You have the right to object to unauthorized direct debit payments within eight weeks.
Any valid SEPA core direct debit mandate will have the following information submitted in writing to the payee:
The original mandate can be kept if the amount changes, and the mandate may be revoked at any point during the transaction.
Still on the hunt for a digital business account? Apply for your Qonto account in just 15 minutes.
SEPA SDD B2B is a mandate for transactions between companies, exclusively for corporate customers.
Just like with “core” SDD, the mandate must be valid for the transaction to be successful.
The idea is that no incorrect bookings may occur between businesses.
The corporate customer always authorizes the beneficiary to collect. Refunds are only possible in the case of a fraudulent or erroneous direct debit, within a 13-month window.
Each SEPA B2B payment is checked by the corporate customer’s bank before execution. As a company, you can avoid delay by sending a copy of the mandate to your own bank.
The information required for the mandate between businesses is similar to the core direct debit mandate requirements.
However, there's a key difference:
The B2B direct debit is an “authorized” payment
So long as the mandate has been correctly authorized and remains valid, the receiver will not be entitled to a refund, and can only request one if both parties agree (once the debit is made).
While the procedures are similar, there are crucial differences:
| SEPA basic direct debit | SEPA B2B direct debit |
|---|---|
Business with private customers (B2C) |
Business with Business Customers (B2B) |
It is only checked whether a mandate exists. However, the data itself is not checked for accuracy. |
Companies deposit copies of their business direct debits with their own bank: verification of the SEPA business direct debit mandate data before execution by the debtor’s bank. |
Return of an unauthorized direct debit possible without giving reasons within a period of 8 weeks. |
As a rule, direct debit returns are not possible, except for extreme cases of fraud and erroneous data. |
No special formal requirements. |
In addition to content requirements, the SEPA business-to-business direct debit mandate must also meet certain formal requirements (detailed below) |
Qonto users can collect SEPA direct debits from their account space without leaving the platform. No more searching for templates on the internet, no need to manually draft a mandate in writing, we automate the transaction for you. Our customers across Europe can easily obtain Creditor Identifiers and start initiating SEPA business-to-business direct debits right away.
On the surface, the SEPA Business to Business and Core Direct Debit payments appear similar. It’s crucial however that, as an entrepreneur or business owner, you fully understand the small but key differences between them.
Most important among these is that once a B2B direct debit has been collected, the debtor cannot reverse it if the mandate is still valid. Also note that the mandate for B2B transactions must follow a formal protocol:
