SEPA Direct Debits for faster payments

SEPA stands for "Single Euro Payments Area," or "Espace unique de paiement en euros" in French. It is an initiative by the European Union to harmonize and simplify electronic euro payments across Europe.

The main goal of SEPA is to allow individuals, businesses, and public administrations to make and receive euro payments under the same conditions, with the same rights and obligations, wherever they are in the SEPA zone.

This harmonization applies to transfers, instant transfers, and direct debits.

In a transaction between a business and an individual, it is referred to as a SEPA Core direct debit, whereas a SEPA B2B direct debit is reserved for inter-business transactions.

When an unknown SEPA direct debit appears on your bank account, the debtor should check their banking transaction history. Each transaction includes useful information to help identify the creditor, such as:

• their name;
• the date and amount of the debit.

If the debit is still unrecognized after these checks, they can check their email inbox for any notifications the creditor might have sent before the debit.

The debtor can also directly contact the service provider identified on their statement for clarification on the origin of the debit. Most companies have customer service accessible by phone or email.

If after all these steps the debit remains unexplained or seems fraudulent, the debtor has rights to dispute and refund a debit.

When a business wants to revoke a SEPA direct debit mandate, it must contact its bank to inform them of the desire to refuse future debits from this creditor.

The business can choose to temporarily suspend the direct debit authorization or to revoke it permanently. In the latter case, they must notify the service provider of their decision and communicate the payment method to be used in the future (transfer, check, credit card, etc.).

Unlike a SEPA Core direct debit, a SEPA B2B direct debit does not allow the company to dispute the transaction after the debit of its account as long as a direct debit mandate exists. Therefore, obtaining a refund of the debited amount is impossible.

To block future payments, companies can ask their bank to refuse the debit of their business account until the due date.

However, companies have a period of 2 months from the debit date to dispute an unauthorized or erroneous SEPA B2B direct debit. To do this, they must contact their bank to investigate the transaction.

Note that this investigation process does not guarantee a refund of the funds by the creditor's bank.

Like the ICS (SEPA Creditor Identifier), the RUM is an essential element of a SEPA direct debit mandate to ensure that the debit authorization was given by the debtor. Additionally, they allow the identification of all debits issued within the banking system.

Each direct debit mandate has its own RUM to allow the bank, the creditor, and the debtor to clearly identify the service and debit authorization related to the payment. This reference consists of a maximum of 35 alphanumeric characters chosen by the creditor. 

The organization that regulates the SEPA direct debit and transfer system, the European Payments Council, allows the following characters:

• letters, ideally uppercase;
• numbers;
• special characters: / - ? : () . , "" + space.

For obvious security reasons, the RUM must not consist of sensitive data such as the debtor's IBAN or passport number. However, the creditor may choose to use the contract number or a customer identifier.

You are eligible for incoming direct debits if: 

• your company is fully operational and not in the process of closing;
• 2-step authentication is activated on your Qonto account; 
• Nonprofit organizations are not eligible;
• your account has never been debtor;
• you have never received a seizure on your account following a debt contracted with a company, an individual or the financial authorities in your country.

Good to know: internal eligibility criteria are added to this list and are also taken into account.

Additionally, the refund rate must be below 20 %. This rate corresponds to the percentage of automatic debits that have been refunded, at your client's request, since you started using this feature. This percentage refers to refunded automatic debits.

Similarly, we assess your eligibility for direct debit each month. As such, your eligibility for this feature may change.