SEPA Direct Debit
OverviewPayment group: Direct debit
Payment product id: 770
Direct Debit is a payment method that allows you to debit the invoice amount directly from the consumer’s bank account. This is done through a pre-authorized mandate given by the consumer. It offers consumers an easy and hassle free payment method while providing them with protection against unauthorized debiting. This payment method is predominantly used for recurring payments, making it perfect for monthly subscriptions in the Gaming and Publishing or other verticals that have subscription based business models. In recent years Direct Debits have also become widely popular for one-time purchases.
SEPA Direct Debit (SDD) is the default direct debit scheme for SEPA countries. It has replaced the domestic direct debit schemes that have been used prior to August 1, 2014. The basis of this scheme is the use of the IBAN.
SEPA (Single Euro Payment Area) is a European regulatory initiative to create a standard format for processing transactions across 33 markets in Europe. SEPA can be seen as a second phase in introducing a uniform payment landscape in Europe. During the first phase, a single European currency has been introduced in 2002, providing consumers and corporates the convenience of paying in the same currency without having to worry about things such as exchange rates: the EURO. However, paperless payments such as Direct Debits and Credit Transfers couldn’t profit from this change in an optimal way. Payment systems still continued to follow their own national rules with regards to processing formats of transactions and the formatting of an account number. With the introduction of SEPA the goal is to take away these differences and make intra-European payments as convenient as a domestic payment.
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