SDD SEPA debit, the essentials for your invoices

SDD SEPA debit (or also SDD direct debit or SDD SEPA direct debit), a term that is part of everyday life.
But are we sure we know it well? that we understand what it is and how it works?
Did you know, for example, that there are software programs dedicated to managing your recurring billing that support various payment services, including subscription management software and payment gateways?
Okay, enough questions, let's look at the answers:
What are SDD debits and the SEPA area?
SEPA stands for Single Euro Payments Area, or single euro payments area.
The SEPA unified payment area includes 34 states and their overseas territories. It was established by the member banks of the European Payments Council (EPC) in response to a request from the European Commission.
These countries, which do not necessarily have the euro as their currency, are:
- European Union countries (including 19 in the euro zone) +
- Monaco
- Switzerland
- Liechtenstein
- Norway
- Iceland
- San Marino
- Isle of Man
- the Channel Islands
- French overseas territories
What is the purpose of the SDD debit system?
Within the framework of Economic and Monetary Union, the principle of SEPA is to enable consumers, whether individuals or professionals, within both BtoC and BtoB exchanges
- to make payments on the same terms for all countries in the European area
- to harmonize means of payment in euros among member states
- To take full advantage of the trade and commerce zone
We are talking about non-cash payments (excluding cash and banknotes), such as :
- the SEPA credit transfer
- the SEPA instant credit transfer (SEPA Instant Credit Transfer or Instant Credit Transfer)
- SEPA direct debits (SEPA Direct Debit or SDD)
- SEPA bank card payments (SEPA Card Payment or SCP).
Therefore, compared to domestic payments, cross-border payments benefit from:
- the same standards
- with the same speed
- the same security
- the same costs
This is in order not to slow down, if not to promote, the development of trade and investment within the area.
Focus on SEPA direct debits
As defined by Unicredit:
SEPA Direct Debit is the payment instrument that allows the customer to arrange collections in euros within the SEPA area on the basis of a prior agreement (mandate) between creditor and debtor that allows the debtor's account to be debited automatically bank to bank; it is the opposite of the SEPA credit transfer, made at the initiative of the debtor
Unicredit
The SEPA Core Direct Debit sdd direct debit and the SEPA B2B direct debit.
There are two types of SEPA direct debits.
The SDD Core Direct Debit applies to all creditors and debtors, while the SEPA B2B Direct Debit, as the name suggests, applies only to B2B direct debits so as to cater to the specificities of the latter type of trade.
The latter, in fact, does not have the same guarantees:
- the right to repayment of transactions is not systematic, unless the debtor can prove that it did not accept the B2B mandate (absent or invalid mandate),
- sampling times, however, are shorter
The SDD SEPA Mandate
It is used to materialize the debtor's consent to be debited, without any amount being mentioned.
Here is an example of a payment mandate:
© Diazilla
It can take 2 formats:
- paper: is filled out by the debtor and returned to the creditor;
- electronic: it is filled out online by the debtor on the creditor's website or through his online bank (e-mandates).
The validity of a SEPA mandate is:
- unlimited: that is, until the debtor's consent is revoked (for recurring withdrawals)
- revocable: at any time upon request of the debtor to his creditor,
- subject to expiration: if no SEPA Direct Debit order has been sent for a period of 36 months.
The delay for SEPA direct debit.
Unlike direct debits on credit cards, SEPA direct debits are not immediate; they do not occur in real time. Payment is collected in the creditor's bank account within at least two interbank business days from the debit date.
Other conditions
- Both the creditor and debtor must be in the SEPA zone.
- There is no limit on the amount.
- It exempts the debtor from the need to send a receipt every time recurring transactions (formerly TIP, interbank payment voucher) are settled or due.
- Since the introduction of SEPA, there is no longer any specific form to be filled out in addition to the signed direct debit mandate.
- Previously, the debtor's bank had to be informed by the debtor. The agreement is now made directly between the customer and the company.
Obligations related to SEPA direct debits.
SEPA direct debits require identification codes
- A SEPA Creditor Identifier code (CIC or SEPA code) to suppliers.
- In practice, if the company name, firm, bank account or address changes, it remains unchanged;
- a RUM (unique mandate reference) code , defined by the creditor and communicated to the debtor.
How to obtain the CIC?
The request is made directly from the creditor's bank to the IRS or through a payment gateway.
This code consists of:
- ISO country code
- Automatically generated control code
- Business code (as specified by the creditor)
- Business tax code (if not present automatically generated non-significant code)
Generation of the RUM code
The automatically generated RUM code is based on criteria :
- consists of up to 35 Latin characters, including :
- letters A to Z, with capital letters recommended
- numbers from 0 to 9
- punctuation / - ? :() . and space (not recommended)
- is unique for each warrant
- does not contain sensitive data such as IBAN, passport number, etc.
- may include contract or customer references, as long as they are unique
SEPA debits and company
When does a company use SEPA direct debits?
From the moment a company sells products or services and bills its customers on a recurring or repeated basis, it can use SEPA Direct Debits because it allows it to:
- to attract customers through easy, fast and secure settlement;
- To get customers to pay regularly and automatically;
- to ensure adherence to a schedule, without payment delays or reminders;
- to build customer loyalty, with the subscription system, pay-per-use payment (on actual consumption, Pay as you go) or payment in multiple installments;
- to easily identify payments received, references being decided by the creditor itself (see RUM code);
- to limit the risk of non-payment.
On the other hand, it is also possible to offer SEPA direct debits for a single payment, called "One Off"
Obligations of the company
The obligations cover three dimensions:
- The collection and physical or electronic storage of mandates,
- the right information from its debtors,
- updates, changes and cancellations of warrants.
Therefore, the supplier or service provider must:
- provide its customers with a point of contact that allows them to modify or revoke the SEPA direct debit mandate;
- inform them before each direct debit, at least 14 calendar days before the due date, by invoice, a single separate or recurring direct debit notice, or a calendar, mentioning:
- the date,
- the amount,
- the ICS number,
- if possible, the RUM code that will be assigned to the mandate;
- execute and send the sampling mandate to the customer, which must contain:
- "SEPA Direct Debit Mandate" header,
- the RUM code,
- the contact details (address and name or company name and, if different, name or company name),
- the creditoridentifier,
- mandatory information;
- send your bank the first payment order 5 business days before the due date, 2 business days for recurring orders;
- change the mandate upon the debtor's request (new bank account, etc.) upon receipt of a valid letter (no new signatures).
The unique mandate reference is visible on the debtor's bank statement (paper and/or online) so that he can identify and dispute a direct debit.
How to activate and block an SDD?
The creditor can collect warrants and send them to his bank, but in the case of SEPA online payment, a payment management solution is required for e-merchants.
This allows them to protect the sensitive data of their customers, which circulate on the web, and to entrust responsibility, particularly for storing bank data, to a trusted third party.
Some of the most popular payment gateways include:
- Braintree
- GoCardless
- SlimPay
- etc.
Braintree
Braintree is a service of Paypal. It is a platform that brings together Paypal, cards, ATMs and also major digital wallets.
By offering all the fastest, smoothest, and most modern payment methods to their customers, they want to be able to significantly change their user experience.
With Braintree you will be able to:
- make payments around the world
- use the latest payment tools on a single platform
- for both online and in-store payments
- few integration costs

Braintree
GoCardless
GoCardless is an English software spread throughout Europe. In Italy for the time being it must be used in English.
It connects easily with other software adopted by the company and deals mainly with recurring payments and invoice payments.
Its features include:
- supports SDD SEPA
- online direct debit mandate
- payment scheduling
- create a payment plan
- control dashboard

GoCardless
Slimpay
Slimpay is an extremely successful payment gateway in France that has also conquered the Italian market for the past couple of years.
The solution allows, through its refined interface, to collect customers' banking data, but also to activate them thanks to an electronic signature form, which can be used online or in stores, for contracts and SEPA direct debit mandates.
The electronic signature includes archiving with evidentiary value and time stamping.
SlimPay also allows you to:
- accept SEPA direct debit payments, after filtering IBANs for optimal security
- monitor the status of recurring payments via dashboard
- access customer information and modify it as required
- set up SEPA direct debit schemes
- reimburse customers
It can be integrated into your website or mobile application with just a few lines of code, thanks to an advanced API.

SlimPay
Periodicity and security at the service of your offering
SEPA direct debits provide a secure framework and harmonize payments within and outside Europe. This not only facilitates business development for companies, but also the management of subscription payments, which are increasingly popular among individuals and businesses.
For e-merchants and online service providers, tools adapted to subscription-based consumption manage recurring billing for them and the collection of banking and payment data from their customers.
How do you handle SEPA direct debits?
Article translated from Italian