The Single Euro Payments Area (SEPA) Direct Debit (SDD) simplifies payments across member countries of the European Union by allowing direct debit of every EUR-denominated bank within the SEPA region.
SEPA has two schemes, one for consumer transactions and another meant for business-to-business (B2B) transactions. A SEPA transaction must be made in euros, but the accounts can be in any currency within the European Union.
Merchants can set up SDD with their bank, which allows them to receive payments directly into their bank account. Consumers can sign up for SDD through their online banking account or by visiting their local branch. They can also sign up via telephone or mobile app if they don't have access to online banking services.
SDD is accepted globally; however, some merchants may charge additional fees for processing this type of transaction. It's important for consumers who use this method of payment to read about any additional charges before signing up.
SDDs can be used for both one-off transactions and recurring payments (for example, monthly utilities).
The European Union is known for laws that protect the customer, and SEPA direct debit is no exception. The biller (the merchant) is accountable for any fraudulent activity, and thanks to the unique identification of each transaction, biller’s are easily identified. Customers can get a refund up to eight weeks after a transaction with no reason given.