What SEPA Direct Debit means for your business?
POSTED ON: 6 Jul, 2018
SEPA Direct Debit or SDD is a European direct debit system that enables merchants to collect EUR-denominated payments from 34 SEPA countries and associated territories. Before introducing SEPA standard, payments between accounts in different European countries were difficult and complicated. Due to the differences in banking systems sending or receiving funds from abroad was time-consuming and costly. Having SEPA system and especially SEPA Direct Debit brings numerous benefits for both customers and business.
Once a customer authorises the merchant to initiate payments, SEPA Direct Debit scheme begins. Creditor can then initiate direct bank-to bank transactions without any amount limitation. All communications happens directly between banks, without any card networks involved. For customer the main advantage is a guarantee of no delays in his payments, which can always result in penalties or service disruption. For the businesses, the advantages are countless: it highly reduces the chances of not receiving the payment or having errors in the credited amount; it also greatly simplifies the processing of invoicing and has overall impact on the company’s cash flow.
The level of control SDD gives to merchants makes it ideal for the collection for recurring payments, for example subscriptions or membership fees. Apart from a guaranteed payment every month, you eliminate unsuccessful payments due to card expiry or cancellation and of course increase loyal customer pool by offering “set it and forget it” payment method. It also gives you a lot of flexibility as it differs from standing orders method where new instructions are required every time there is a change in the amount. With SDD, every time the change is needed, a merchant can automatically claim a new amount.
So as you see SDD can make a huge difference in simplifying your business processes and make your customers even more happy. Ready to try out SEPA Direct Debit yourself? Get in touch with us and we will have a solution for you and your business.