SEPA Direct Debit

Under SEPA Direct Debit the payer signs a mandate once, and the creditor then collects due amounts on schedule. It is the standard collection method for instalment lending in the euro area because it removes the need for the borrower to remember to pay.

The operational detail that matters is failure handling. Collections bounce for ordinary reasons — insufficient funds, a closed account, a revoked mandate — and each failure has its own return code and its own correct next step. Automating collection is mostly automating what happens when collection does not work.