Accepting SEPA Direct Debit as a merchant

You do not contract with a scheme. You need a creditor identifier and a bank or PSP that supports collection, and you must hold a valid mandate for each payer. Two schemes exist: Core, used for consumers, with an eight-week no-questions refund right and thirteen months where a mandate is disputed; and B2B, restricted to businesses, without that refund right but requiring mandate confirmation by the debtor bank. Choosing the wrong one for your customer base is a common and expensive error.

Regulation (EU) 2024/886 obliged eurozone payment service providers to be able to receive instant euro payments from 9 January 2025 and to send them from 9 October 2025, with fees no higher than for ordinary transfers. From 9 October 2025 those providers must also offer Verification of Payee, checking that a payee name matches the IBAN before a transfer is authorised. Providers outside the eurozone have until 9 July 2027. The precise point for merchants: Verification of Payee applies to credit transfers, not to direct debits, though the European Payments Council has indicated the principle could extend to mandate verification as the rules develop. The broader effect is that instant credit transfer is becoming a credible alternative rail for collections that direct debit has owned by default.

Direct debit does not separate authorisation from capture, because there is no authorisation at all. Nothing is reserved, no balance is checked and no decision comes back before the due date. That rules out pre-authorisation, delayed capture, partial capture and split shipment, so any model that depends on holding an amount and taking it later cannot be built on this rail.

The timing is set by the rulebook rather than by your provider. The collection must reach the debtor’s bank at the latest one inter-PSP business day before the due date, and no earlier than fourteen calendar days before it. That window is the same for first, one-off and recurrent collections.

The obligation most often missed sits on you rather than on your PSP. You must pre-notify the debtor at the latest fourteen calendar days before the due date unless you have agreed a different timeline with them. A shorter notice period is available, but it has to be agreed in your terms rather than assumed.

There is no ceiling in the scheme either. Neither Core nor B2B sets a maximum collection amount, so any limit your customers run into comes from their own bank or from your PSP. It varies from one customer to the next, which means it cannot be designed around, only detected.

The scheme sends failure signals, not success signals. A collection that works produces nothing at all. You infer success from the absence of a return message, across a window that does not close for eight weeks.

What can arrive instead is a reversal, and each kind carries its own deadline and its own decision-maker. Dunning, revenue recognition and any fulfilment you defer until payment therefore have to be built on the absence of a signal rather than the arrival of one, over a period measured in weeks rather than seconds.

From 15 November 2026 the SEPA schemes accept only a structured or a hybrid address. An unstructured address leads to a reject. This applies to any collection executed or settled from that date that carries a debtor or a creditor address.

Whether it touches you turns on a detail most coverage skips. Under the direct debit rulebooks the creditor address is optional, and the debtor address is mandatory only where the creditor’s bank or the debtor’s bank sits in a SEPA country outside the EEA. For most eurozone collections the question is therefore not whether you can supply a compliant address, it is whether you are supplying one at all. If your submissions carry addresses and those addresses are unstructured, those collections will be rejected from that date. If they carry none, nothing changes for you on 15 November.

Hybrid is the lighter route to compliance. Country and town name have to be structured, while street, building number and postcode may stay in up to two unstructured address lines of seventy characters each. The structured format has been available since March 2024 and the hybrid format since October 2025, so neither is new.

The work sits in your own customer data rather than at your provider. The EPC expects creditors to upgrade the debtor records they hold so that those records can store a structured, or at least hybrid, address by 15 November 2026.

What you pay is set in your PSP contract, not by the scheme. Start by establishing whether you are overpaying your PSP, or move straight to cutting your PSP costs, because a cheap method priced badly still costs more than it should.

Relevant markets: eurozone