SEPA Direct Debit B2B

Introduction to SEPA Direct Debit B2B

SEPA Direct Debit B2B (SDD B2B) is used for transactions between businesses, including loan repayments or large purchases, throughout the SEPA zone. It was introduced in 2009 alongside SEPA Direct Debit Core (SDD Core), shortly after the launch of SEPA Credit Transfer in 2008.

Unlike SDD Core, SDD B2B is used only for business-to-business transactions. You can find in-depth information about the SEPA zone and its payment scheme in our guide to SEPA payments.

• Year introduced: 2009
• ‍Operated by: European Payments Council
• ‍Participation: 2,646 PSPs as of July 2022 (68%)
• ‍Availability: Business days
• ‍Settlement: One business day
• Maximum amount: None
• ‍Fee per payment: €0.20 (approx.)

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How SEPA Direct Debit B2B works

SDD B2B is a pull payment method, meaning that the creditor is given approval to collect funds from the debtor’s account. This typically takes place on a recurring basis but the scheme can also be used to collect one-off payments.

In order to use SDD B2B, businesses must establish a contractual relationship with a bank or PSP in the SEPA zone that will act as a creditor on behalf of the business. PSPs set their own fees for using SEPA Direct Debit B2B with a typical pre-transaction cost around €0.20.

Processing cycle

With SDD B2B, debtors must be notified at least fourteen days before the collection date, unless otherwise agreed, and the collection instruction must be submitted to the PSP or bank at least one business day before the due date.

How do SDD B2B returns work?

Customers using SDD B2B are not able to request a refund after the account has been debited unless it’s deemed an unauthorized collection. This includes collections made without an active mandate in place or where an incorrect amount is called. In such cases the debtor can dispute the collection for up to thirteen months afterwards.

The debtor’s bank can return the collection for up to two business days after the collection due date in the event of technical errors, such as the account being closed or containing insufficient funds. When a collection is returned, banks and PSPs charge fees ranging from €2 to €5 that are passed onto to the creditor.

How do SDD B2B mandates work?

SDD B2B mandate needs to be signed by the debtor prior to the first collection. Unlike SDD Core mandates that are typically signed digitally, SDD B2B mandates often have to be signed with a traditional wet ink signature, though digital signatures may be accepted in some cases. A scanned copy of the original document must be sent to the debtor’s bank for registration.

It’s mandatory to include the following information in the mandate, as specified by the SDD B2B rulebook:

• Scheme type (SEPA Direct Debit B2B)
• Unique mandate reference
• Name of the debtor
• IBAN of the debtor
• BIC of the debtor’s bank
• Creditor’s company name
• Creditor Identifier (CID)
• Creditor's full address
• Signatures and time of signing

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Benefits and drawbacks of SEPA Direct Debit B2B

SEPA Direct Debit B2B is a relatively low-cost way to process direct debits throughout the SEPA zone and is well-suited for business-to-business use cases such as supplier payments. Payments through SDD B2B cannot be refunded by the debtor if there was a valid, authorized mandate in place – unlike an SDD Core payment. Additionally, it is not mandatory to pre-notify the debtor before a collection is made.

However, participation in the SDD B2B scheme is not mandatory for PSPs or banks in the SEPA zone and its adoption is lower than that of SDD Core accordingly. Transaction volumes are also lower than those of SDD Core, mainly because the mandate setup process can be cumbersome.