The European direct debit at a glance
The European direct debit (SEPA Direct Debit or SDD) came into operation at the end of 2009. There is a transition period during which it will co-exist alongside domestic direct debit mechanisms (in Belgium: DOM80). Following a decision by the European Parliament, domestic mechanisms will cease to be used from 1 February 2014.
A four-part model
The European direct debit is based on a four-part model:
- the debtor (payer);
- the creditor (recipient);
- the debtor's bank;
- the creditor's bank.
The mandate is the main difference as compared with the domestic direct debit system (DOM80). It is no longer an agreement between the debtor and the debtor's own bank, but between the creditor and the debtor. The creditor is now responsible for mandate management.
All about the direct debit mandate.
What this means, in practice.