SEPA Direct Debit

Introduction

SEPA Direct Debit (DD) is a bank-to-bank payment method available across the Single Euro Payments Area, enabling merchants to collect funds directly from a customer's account in EUR. It is widely used for recurring billing and one-off payments, particularly in markets where bank transfers are preferred over cards. SEPA Direct Debit is designed to standardize euro-denominated bank payments across participating countries, and offers a secure and reliable method for debiting accounts with the customer's authorization.

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SEPA DD operates as a "pull-based" payment method, where the merchant initiates the debit after receiving prior authorization from the customer.

This authorization is granted through a mandate, which is a legal document signed by the customer to allow the merchant to collect funds from their account. The mandate includes critical information such as the customer's IBAN, the merchant's unique creditor ID, a unique mandate reference to identify the agreement, and the terms under which funds may be collected. Once signed, the mandate permits the merchant to initiate future payments without requiring repeated customer input.

The merchant, also referred to as the creditor in SEPA terminology, is required to store and manage mandates securely. The creditor must also include their Creditor Identifier and the Mandate Reference in each payment instruction. These values ensure that the customer and their bank can identify and validate the source and legitimacy of the direct debit.

The customer, who authorizes the payment by signing the mandate, is referred to as the debtor. The debtor agrees to allow the creditor to initiate direct debits from their account under the terms specified in the mandate. The debtor's bank processes the payment based on the mandate details provided, ensuring that the amount and conditions match the agreement established between the customer and the shop.

SEPA provides a unified framework for processing direct debits within the EU and select non-EU countries, and is widely used for recurring payments such as subscriptions, invoices, and installments. Once authorized via a mandate, payments are pulled automatically from the customer's account, removing the need for manual bank transfers or card authorizations.

There are two types of SEPA schemes: SEPA Core (B2C) and SEPA B2B. Both use the same infrastructure but serve different customer profiles and follow distinct mandate rules. SEPA Core is available to both individuals and businesses and includes consumer protection features such as the right to a chargeback. SEPA B2B is reserved for business-to-business payments and requires stricter validation, including a waiver of chargeback rights by the customer.

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Currently, only SEPA Core is supported in KontoCloud via SDK integration, SEPA B2B is not available.

Merchants integrating KontoCloud should ensure that their payment use case aligns with the SEPA Core scheme, which is designed for payments involving individual customers or business acting in a consumer-like capacity.

KontoCloud Integration Flow for SEPA

The integration flow through KontoCloud includes full support for SEPA Core mandates, which means the customer provides their bank account details and signs a mandate to authorize future debits. Once the mandate is confirmed, the merchant can initiate payments directly from the customer's account without requiring repeated manual actions.

Mandate handling, including the collection of required customer information, validation, and storage is seamlessly managed through the SDK. Once the mandate is active, KontoCloud allows the shop to initiate direct debits in accordance with SEPA scheme rules. This provides a streamlined and reliable way to handle euro-denominated recurring or one-off payments within the supported SEPA markets.

Merchants integrating SEPA Direct Debit should follow these steps:

1. Integration Journey
   Set up testing and production environments, ensure compliance with SEPA regulations and acquire API credentials.

2. KC Web SDK
   Leverage the Web SDK to implement SEPA DD in web applications, including secure data collection for mandate creation.
   Please visit the SEPA-specific documentation on collecting customer bank account details securely through KontoCloud's Web SDK. Instructions for SDK setup are available in the Web SDK SEPA Setup Guide.

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Should you need help with SEPA integrations, please contact your assigned Product Solution Specialist (PSS) for guidance.

SEPA Test Data

Test data is provided to support simulation of payment flows across all available payment options during integration and testing. It facilitates validation of API behavior, verification of SDK rendering, and end-to-end troubleshooting without processing real transactions.

Debtor Bank Accounts

IBAN	SWIFT / BIC	Country	Result
DE89370400440532013000	COBADEFFXXX	Germany	Success
DE72710900000147433891	GENODEF1BGL	Germany	Success
DE75512108001245126199	SOGEDEFFXXX	Germany	Success
MT84MALT011000012345MTLCAST001S	MALTMTMT	Malta	Success
FR1420041010050500013M02606	PSSTFRPPLIL	France	Success
PL61109010140000071219812874	WBKPPLPPXXX	Poland	Success
IT60X0542811101000000123456	BLOPIT22	Italy	Success
ES9121000418450200051332	CAIXESBBXXX	Spain	Success
AT483200000012345864	RLNWATWWXXX	Austria	Success