How to collect payments by SEPA Direct Debit: a step-by-step merchant guide

What do you need before collecting SEPA Direct Debits?

Before the first collection you need a creditor identifier, a bank or payment provider that offers SEPA Direct Debit, and a decision on which scheme to use.

For definitions, the Core vs B2B schemes and the full table of return codes, see SEPA Direct Debit explained. This page is about running the process: the German Lastschriftverfahren, the Dutch automatische incasso and the Italian addebito diretto all follow the same European Payments Council (EPC) rulebooks.

• Creditor identifier (Creditor ID). A unique code that identifies you as the collector in every debit. In Germany it is called Gläubiger-Identifikationsnummer and is issued by the Deutsche Bundesbank (source: bundesbank.de). In other countries it is issued by a national body or through your bank.
• Bank or payment provider. It submits your collections to the SEPA system. Some providers let you collect under their own creditor identifier; this is quicker to start but ties your mandates to that provider.
• Scheme. SDD Core works for consumers and businesses. SDD B2B is for business payers only and removes the payer's refund right on authorised debits (source: EPC rulebooks). For B2B, both your provider and the payer's bank must offer the B2B scheme, and the payer must confirm the mandate with their own bank before the first collection.
• Terms and privacy notice. Your customer terms should describe how and when you collect.

How do you collect a SEPA mandate online?

You collect a mandate online by showing the payer a mandate text with the required fields and recording their agreement. Many merchants use an e-mandate in the checkout or sign-up flow.

Required fields (source: EPC SDD rulebooks):

Good practice for online mandates:

Whether a checkbox-style e-mandate is valid depends on national law and on your bank or provider. Check with them or with a legal adviser.

• Unique mandate reference
• Your name, address and creditor identifier
• Payer name and IBAN
• Payment type: recurrent or one-off
• Date and signature, or an electronic equivalent
• Show the mandate text before the payer confirms, including the refund right for Core.
• Validate the IBAN format before submission.
• Record the timestamp, the confirmation step and the mandate text version.
• Send the payer a copy of the mandate by e-mail.

Pre-notification: what and when?

Pre-notification is a message telling the payer the amount and the due date before you collect. Under the SDD Core rulebook the default period is 14 calendar days before the due date, and a shorter period can be agreed with the payer (source: EPC SDD Core rulebook).

A clear pre-notification is one of the simplest ways to reduce refund requests.

• For recurring payments with a fixed amount, one notice can cover a schedule, for example in the contract or the first invoice.
• For variable amounts, send a notice before each collection.
• Include the mandate reference and your creditor identifier so the payer can recognise the debit on their statement.

First and recurring collections: what are the timelines?

Your bank or provider submits each collection before the due date, within the deadline set by the EPC rulebook, and the payer is debited on the due date. Your provider will tell you its own cut-off time for submissions.

What to plan for:

• Cut-off. Submit early enough for your provider's cut-off before the due date. Check the current rulebook and your provider for exact days.
• Due date. The payer's account is debited on the due date; if that is not a business day, the next business day applies.
• Sequence. Mark collections as first, recurring, final or one-off where your provider still requires it.
• Funds. Plan cash flow for the period in which the payer's bank can still return the collection, and for the 8-week Core refund right.

Returns, refunds and retries (R-transactions)

A failed or reversed collection comes back as an R-transaction with a reason code, and your response depends on that code. The main types are reject (before settlement), return (by the payer's bank after settlement), refund (requested by the payer) and reversal (by you).

Banks do not retry on their own. You or your provider decide whether to resubmit. The full code list is on the SEPA Direct Debit page (source: EPC guidance on reason codes, EPC173-14).

How can you reduce failed debits?

You reduce failed debits mostly through clean data and clear communication with payers. Practical measures:

• Validate IBANs at sign-up.
• Send pre-notifications that show the amount, date and your name as it appears on statements.
• Pick due dates close to typical pay days for consumer subscriptions.
• Retry only for codes where a retry can work, such as AM04, and limit the number of retries.
• Offer a fallback method, such as a card or Pay by Bank, after repeated failures.
• Keep the creditor name on the statement consistent with your brand.

Step-by-step: how to collect your first SEPA Direct Debit

Get a creditor identifier from the national issuer, or agree to use your provider's.

Choose a bank or payment provider that offers SDD Core and, if needed, B2B.

Set up the mandate flow in checkout or sign-up with all required fields.

Record the mandate with timestamp and text version, and send the payer a copy.

For SDD B2B, ask the payer to confirm the mandate with their own bank before the first collection.

Send the pre-notification with amount and due date.

Submit the collection before your provider's cut-off for the due date.

Confirm settlement and match it to the invoice.

Handle R-transactions by reason code, with retries only where they make sense.

Keep mandates active. A mandate expires 36 months after the last collection (source: EPC rulebook).

How do you run SEPA Direct Debit collections through OrsunPay?

OrsunPay is payment orchestration software that connects you with payment providers offering SEPA Direct Debit, so the method runs alongside your other payment methods in one integration. OrsunPay is a payment orchestration platform that connects you to licensed PSPs; it does not process or hold funds itself.

Mandates are set up with your SEPA Direct Debit provider; check with your provider how it captures and stores them.

Recurring collection schedules (amounts and due dates) are set up in your own billing system or with your provider; check with your provider which scheduling options it offers.

Collections go through the provider connection you choose. Fees, cut-offs and payouts are set by your provider.

Whatever setup you use, the process practices in this guide apply: send pre-notifications with amount and due date, read the reason code of every return, and set retry rules per code, retrying only where a retry can work. Check with your provider which of these steps it handles and which you run yourself.

Step-by-step: how to collect your first SEPA Direct Debit

1. Get a creditor identifier from the national issuer, or agree to use your provider's.
2. Choose a bank or payment provider that offers SDD Core and, if needed, B2B.
3. Set up the mandate flow in checkout or sign-up with all required fields.
4. Record the mandate with timestamp and text version, and send the payer a copy.
5. For SDD B2B, confirm the mandate with the payer's bank before the first collection: the payer registers it with their own bank.
6. Send the pre-notification with amount and due date.
7. Submit the collection before your provider's cut-off for the due date.
8. Confirm settlement and match it to the invoice.
9. Handle R-transactions by reason code, with retries only where they make sense.
10. Keep mandates active. A mandate expires 36 months after the last collection (source: EPC rulebook).