In the current payment system, businesses face a lot of difficulties in collecting payments from other SEPA countries. Due to the differences in payment models, these payments often require different formats and data elements. Taking these payments is usually expensive and time consuming.
The SEPA Direct Debit scheme simplifies the collection of payments across multiple countries, by defragmenting the payment procedures. This will allow customers as well as businesses to make payments across the SEPA member states just as they make domestic payments.
What are the advantages for businesses?
The advantages for business include, but are not limited to:
- Optimizing cash management. Businesses now know exactly when payments will be received from any of the SEPA member states.
- Reliability in cash flow. Payment completion within a pre-determined cash cycle.
- Economies of Scale. By removing the costs involved in collecting payments from other SEPA member states.
- Expanding your business. By making it simpler to collect payments from across Europe.
- Automation. Ability to automate handling of refunds, rejections and returns.
What are the advantages for customers?
The advantages for customers include, but are not limited to:
- Simple and secure method to pay bills across 33 SEPA member states.
- Payers don’t have to deal with consequences of late payments.
- Easy reconciliation of debits on account statements.
How does SEPA Direct Debit differ from the current payment model?
Overall, the following differences can be seen between the current payment model and the SEPA DD scheme:
- Unification of payment systems and data flows, which currently vary between each member country
- Uniformity in customer experience across the member states
- Reduction in complexity, improved security and efficiency
- Single account for trading activities in multiple markets
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