Since 1 February 2014, the SEPA direct debit (“Single Euro Payments Area”) has replaced the former national direct debits and has established itself as the reference system for automatic payments in euros within the European Union. It makes it possible to settle payments on a recurring or one-off basis, without having to issue a bank transfer or a cheque each time. For a company as well as for its employees, it is a payment method particularly suited to group insurance contracts, whether health, death and disability, pension or employee savings. Let us take stock of how it works, how to set it up and the new features to know about in 2026.
How does the SEPA direct debit work?
The SEPA direct debit is based on a simple principle: it is the creditor (the provider, for example your insurer) who initiates the transaction, unlike a bank transfer where it is the account holder who triggers the payment. For a creditor to be able to debit your account, you must first give them an authorisation: this is the SEPA direct debit mandate. Without this signed mandate, no direct debit can be issued.
This system is widespread throughout the SEPA zone, which has expanded in recent years.
Which countries make up the SEPA zone in 2026?
The SEPA zone now brings together around forty countries and territories. It includes:
- the 27 member states of the European Union;
- the three countries of the European Economic Area outside the EU: Iceland, Liechtenstein and Norway;
- Switzerland and the United Kingdom;
- the micro-states using the euro: Monaco, San Marino, Andorra and the Vatican.
The zone has also welcomed new members recently: Albania and Montenegro in November 2024, then North Macedonia and Moldova in March 2025. Serbia has likewise joined the system. Within this area, a cross-border direct debit in euros is processed with the same security and the same timeframes as a national direct debit. A French creditor cannot therefore refuse an IBAN issued in another EU country simply because it does not begin with “FR”.
What information should be entered on your direct debit mandate?
Your creditor provides you with a document to complete and sign, containing the following information:
- Unique Mandate Reference (RUM): a series of numbers and/or letters specific to each mandate, determined by the creditor. It serves as your reference.
- SEPA Creditor Identifier (ICS): a unique reference used to identify the creditor, assigned by their bank.
- Bank details of the account to be debited: IBAN, BIC, name and address of your bank.
- Type of payment: one-off or recurring.
- Place, date and signature.
The creditor keeps this mandate and must inform you of the amount of each direct debit at least 14 calendar days before the due date (unless a bilateral agreement provides for a different timeframe), by any means of their choosing: invoice, notice or payment schedule. Please note: a mandate for which no direct debit has been issued for 36 months becomes void and can no longer be used.
SEPA Core or B2B direct debit: what is the difference?
There are two SEPA direct debit schemes, which it is useful to distinguish, particularly in a professional context.
- The SEPA Core direct debit (SDD Core) is the most common: it concerns both individuals and companies and applies to subscriptions, insurance contracts and taxes. Its main advantage for the debtor is the right to a refund: an authorised direct debit can be refunded within 8 weeks of the debit.
- The SEPA inter-company direct debit (SDD B2B), for its part, is reserved for exchanges between professionals. It is designed to speed up financial flows between companies, but an authorised B2B direct debit does not give any right to a refund: the debtor must therefore be careful before validating their mandate.
In both cases, an unauthorised direct debit (missing or invalid mandate) can be contested for 13 months.
What are the advantages of the SEPA direct debit?
With the SEPA direct debit, no more missed payments: you are automatically debited the amount agreed with your creditor, which avoids unpaid bills. This payment method saves you from sending a bank transfer or a cheque at each due date. For your health insurance or group death and disability contracts, it thus reduces the risk of entering the dispute process and seeing your contract cancelled for non-payment. It is also a valuable administrative time saver for the HR and payroll departments that manage employees’ health and death and disability benefits.
How to set up a SEPA direct debit?
- The creditor sends a direct debit mandate to the debtor.
- The debtor enters their details, their IBAN and their BIC, then signs the mandate and returns it to the creditor (and, for the B2B scheme, to their own bank).
- At least 14 calendar days before the due date, the creditor informs the debtor of the date and amount of the direct debit.
- The creditor issues the direct debit order to their bank, which forwards it to the debtor’s bank.
- The debtor’s account is debited in favour of the creditor’s account.
To be able to debit its clients, a company must obtain a SEPA Creditor Identifier (ICS) from its bank. This payment method integrates naturally into the management of a group contract, for example when setting up company health insurance or a company PER.
How to contest a SEPA direct debit?
If you notice a non-compliant direct debit, you can contest it with your bank. Have to hand the SEPA Creditor Identifier (ICS), the Unique Mandate Reference (RUM), as well as the date and amount of the direct debit.
For an authorised direct debit (for example an incorrect amount under an SDD Core), your refund request must be made within 8 weeks of the debit. Your bank then has 10 working days to notify you of its decision. For an unauthorised direct debit, this timeframe is extended to 13 months. You can also revoke your mandate at any time, by informing your creditor and your bank.
Good to know: the refund by the bank in no way prejudges the validity of the debt. It is then up to the creditor and the debtor to settle any dispute between them.
