A guide to SEPA payments and SEPA Direct Debits

The Single Euro Payments Area (SEPA) scheme allows customers to make cashless euro payments to any country in the European Union, as well as some non-EU countries, via credit transfer and direct debit. This page provides a comprehensive overview of SEPA transfers, SEPA Direct Debit, and the advantages and disadvantages of making SEPA payments.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

A SEPA payment refers to a type of electronic payment made within the Single Euro Payments Area (SEPA). SEPA allows individuals and businesses to make euro-denominated payments across participating EU member states and a few non-EU countries, under a unified framework. SEPA payments take two main forms: credit transfers and direct debits.

• SEPA Credit Transfer (SCT): This allows for the electronic transfer of funds between accounts within the SEPA region. It is commonly used for one-off or recurring payments, such as salary transfers, bill payments, or other transactions where funds are transferred from one account to another.

• SEPA Direct Debit (SDD): SEPA Direct Debit enables authorised businesses or service providers to collect payments directly from the bank accounts of individuals or businesses within the SEPA region. This method is often used for recurring payments like utility bills or subscription services.

While both types of SEPA transfers make it easy to send euro payments across borders, the essential difference is in how they’re initiated: credit transfers are sent by the payer, while direct debits are pulled by the payee (with prior authorisation).

All the following 27 EU member states are part of the Single Euro Payments Area:

• Austria

• Belgium

• Bulgaria

• Croatia

• Cyprus

• Czech Republic

• Denmark

• Estonia

• Finland

• France

• Germany

• Greece

• Hungary

• Ireland

• Italy

• Latvia

• Lithuania

• Luxembourg

• Malta

• Netherlands

• Poland

• Portugal

• Romania

• Slovakia

• Slovenia

• Spain

• Sweden

Alongside the EU member states, Switzerland, United Kingdom, San Marino, Vatican City, Andorra, Monaco, and the three EEA countries of Iceland, Norway, and Liechtenstein participate in the SEPA initiative. Montenegro and Albania joined SEPA in April 2025.

SEPA (Single Euro Payments Area) is an initiative for standardising euro payments across Europe. SEPA Direct Debit is a system which allows businesses to collect payments directly from a payer’s bank account, commonly used for recurring transactions like bills or subscriptions. While SEPA covers various electronic payment types, SEPA Direct Debit focuses specifically on the authorisation-based collection of funds.

A SEPA Direct Debit on your account indicates that a payment has been made using the Single Euro Payments Area (SEPA) Direct Debit system. It may appear as ‘SEPA DD’ on your bank statement to begin with, but it will eventually be updated to show the company or service name.

Possible reasons for a SEPA Direct Debit on your account include recurring payments that you’ve authorised. You might have recently set up a new membership, subscription service, or loan repayment. 

It’s essential to review your transaction history and associated details to understand the specific nature and purpose of the SEPA Direct Debit in question. If you don’t recognise the charge, speaking to your bank or the entity initiating the direct debit can provide further clarification.

You may need to set up a SEPA Direct Debit if, for example, you subscribe to an ongoing service. The provider will need permission to take the money from your bank account each month, and you give permission by providing a mandate.

A mandate form includes your name, address, bank account number in the form of your IBAN, payment type, and other relevant details. You can sign the mandate in various ways:

1. Paper mandate: Fill out a paper form, scan it, and send it back by email or post.

2. Electronic mandate: You can sometimes complete an electronic mandate form when signing up online.

3. e-mandate (not available for all banks): Some banks offer an e-mandate that allows customers to directly complete the mandate through online banking.

Once your mandate is confirmed, the business can start collecting payments on the dates you’ve agreed to, and from then on, you won’t need to manually send the money each time. You’ll usually get advance notice before the first payment is taken.

SEPA payments generally take one working day from when they were initiated. However, this timeframe typically applies to payments made electronically; paper-based payments (such as one made with a form at a bank branch) can take up to two business days. The exception is a SEPA Instant Credit Transfer, which ensures euro payments are settled within 10 seconds – regardless of the day of the week.

There are a few important cut-off times to be aware of. For the SEPA transfer to arrive the same working day, some banks require the payment to have been initiated in the early afternoon. For a SEPA payment to arrive the following working day, it usually needs to be made by about 4pm on a working day (but this will depend on your particular bank).

While they enable convenient European payments for businesses and individuals, SEPA Direct Debits are not without their downsides:

• Customers must ensure adequate account funds. Insufficient funds during the direct debit process may lead to rejection by the customer’s bank, accompanied by fees for a returned debit. 

• Businesses face risks associated with incorrect or invalid payment data when utilising SEPA Direct Debit. 

• Another limitation for businesses using SEPA Direct Debit is the possibility of customers initiating chargebacks up to 13 months after purchase. Customers can request a refund up to eight weeks after a payment, and up to 13 months if the debit was unauthorised.

SEPA payments, including SEPA Direct Debits and SEPA Credit Transfers, offer benefits for both individuals and businesses thanks to the standardised payment processes within the Single Euro Payments Area. Consumers can enjoy the convenience of using just one bank account and card to make purchases online with shops based in other SEPA countries.

For businesses, key advantages include cost-effectiveness, wider reach across SEPA countries, and predictable cash flow. The standardised processes and security measures contribute to a trustworthy and efficient payment environment, while regulatory support from the European Union establishes a clear legal framework for transactions. Overall, SEPA payments enhance efficiency, reduce costs, and simplify international money transfers.

To cancel SEPA Direct Debit authorisation, customers must inform their bank in writing, stating a reason for cancellation. You may be able to do this through online banking. The bank will then notify the business and halt further collections or refund the disputed amount. However, some banks may require you to inform the business that set up the direct debit.

Required information for cancellation:

• Name and address of the customer

• Name and address of the contractual partner

• Date and place

• Customer number, contract number, or other identification number

Following cancellation, the contract remains with the company, meaning an alternative payment method may be necessary. SEPA Direct Debit authorisation can be cancelled within eight weeks without justification, with reimbursement as appropriate.

Yes, all transfers between your nominated account and your Raisin Account are processed as SEPA transfers. To get started, simply open a Raisin Account by completing the online registration form. 

Once set up, you can easily transfer funds using SEPA payments, and choose from a variety of savings accounts that best suit your needs.