• 03 Feb 2022
  • 3 Minutes To Read
  • Dark
  • PDF


  • Dark
  • PDF

Article Summary

SEPA Direct Debit has been one of the main ways to transfer funds across the Eurozone since 2016. In contrast to a standard credit transfer, where a payer instructs their bank to send a specified amount to another bank account, a Direct Debit mandate authorises the receiver to collect amounts from a payer's account. The transfer can be one-time only or, more commonly, a recurring transaction, making Direct Debit the ideal scheme for paying off loans or items purchased on credit. The fact that the amount of each payment is not fixed and so can vary from transaction to transaction makes a direct debit scheme perfect for credit cards or telephone bills, which can go up or down each month. Online stores also benefit from the flexibility of Direct Debit, as with a single mandate they are authorised to make withdrawals as customers make purchases at irregular times and of irregular amounts.

The SEPA Direct Debit scheme provides a robust dispute mechanism. Individual payers can ask their bank for a refund of any unauthorised payments for up to 13 months and the scheme guarantees debtors a no-questions-asked refund within the first 8 weeks. The scheme also makes use of pre-authorisation, so transactions will not go through if, for example, the debtor does not have sufficient funds in their account to cover the payment, or payment details can not be verified.

For business customers the rules are slightly different, with no possibility of recalling a payment and more emphasis being placed on both parties being in full agreement with stricter guidelines on having the correct mandates in place before transferring any money and much shorter timelines.

SEPA Direct Debit in Mambu

Mambu supports processing and executing incoming and outgoing SEPA Direct Debit Collection Instructions made to a client's account, with the resulting transactions being automatically created and all steps logged and auditable through our Mambu Payment Gateway.

The below timeline covers the flow for a payment being made by a private individual, meaning it follows the SEPA CORE rulebook.

Sepa Direct Debit Timeline

  • Mandate signed → the customer signs a mandate authorising the receiver to withdraw funds directly from their bank account (not yet supported by Mambu)
  • Up to 14 days before transfer date → the receiver sends the payer's bank a collection notice indicating the day on which the transaction should take place and the amount to be credited. During this time the payer can indicate that they do not want the transaction to be processed by rejecting or refusing the transaction
  • Up to 5 banking business days from transfer date → the payer's bank makes the transfer, in the case of funds not being available or technical error they can retry for up to 5 banking business days, after which the transaction is marked as failed and the receiver notified. During this time the receiver can also issue a reversal and refund the payment
  • Within 8 weeks of transaction → the payer can dispute the transaction amount or validity of the mandate and, with no questions asked, instruct their bank to reverse the transaction
  • Up to 13 months from transaction → the payer can dispute the transaction and, if proven to be unjustified, can instruct their bank to reverse the transaction

Supported use cases

  • Processing Incoming Direct Debit Payments
  • Initiating Outgoing Direct Debit Payments
  • Dispute Management - Reversing or refunding Direct Debit Payments
  • Blocking some or all Incoming Direct Debits for an Account

Some things to consider

  • While accounts can be in any base currency, the transfer must be carried out in Euros, exchange rates should be set up from the account currency to Euros and kept up to date.

  • Customers can set up notifications related to Direct Debit Processing and execution status through the Streaming API mechanism, by specifying the Collection Order Activity event.


  • Customers can be notified about transactions related to Direct Debit Payments, you can do this in Mambu using automated email or sms notifications, for example, triggering a notification on a transactions using the _direct_debit_sepa_ transaction channel.

  • Mambu currently supports the flows set out in the 2017 SEPA Direct Debit Core Rulebook which provides for business to consumer use, as well as outgoing business to business payments according to the SEPA Direct Debit Business to Business rulebook.

Was this article helpful?