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Conditions for offering direct debits

4 min Reading time

A European direct debit can be used both nationally and internationally between countries in the SEPA zone.

 

You can use a direct debit for repeated payments (= a recurrent direct debit; e.g. monthly or quarterly) and for a single payment (= a single collection).

The direct debit mandates are managed by the creditor (not by the bank).

 

Measures for the protection of consumers

 

There are various measures to protect consumers who use direct debits:

  • Your customer is not only entitled to repayment, but may also determine the maximum amount and the maximum frequency (monthly, quarterly, ...) of their direct debits.
  • Your customer may also decide for themselves which suppliers they will authorise to collect the direct debits.
 

Receive or execute payments? Two methods highlighted

 

Executing payments

 

If you use direct debits to make payments, you do not have to do anything. Your supplier will do all the necessary. If you would like some help to set this up, please contact your bank.

Collecting payments

 

If you use direct debits to collect payments, you have to take the necessary steps yourself:

  • B2B:
    • Ask your customer to sign a specific mandate for B2B direct debits.
    • In a B2B context, you can also work with a Core direct debit, but be aware that your customer enjoys a certain level of protection.
    • Request your customer to have the mandate confirmed by their bank. Without this confirmation, no collection can take place
    • Since the SDD B2B (and Core) mandate is a mandate agreed between the creditor and the debtor, it is not necessary to additionally request confirmation from the debtor's bank. This has no added value and does not provide any form of confirmation or collection guarantee.
  • Individuals: 
    • Ask your customer to sign a specific mandate for Core direct debits.

How do you put the European direct debit into practice?

 

More information?

 

Companies that need more information are advised to contact their bank directly.

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