SEPA direct debit for business customers: mandates, the B2B scheme and returns

If you sell to businesses, you will have heard it: “Can't you just send the debit to my bank?”. For many trade customers, cards are a nuisance. The company card is held by one person, has limits and expires, and the accounts department prefers to see the charges on the account with a clear reference. SEPA direct debit is what they expect.

This article is not a step-by-step guide to generating a batch, but about how to approach direct debit for business customers in an online store: which scheme to use, how to collect the mandate and what to do when a debit comes back.

CORE and B2B: two schemes, two levels of risk

SEPA direct debit has two schemes, and the difference matters a great deal to the party collecting payment:

With CORE, a customer can return a legitimate debit weeks later, after you have already shipped the goods. With B2B that risk largely disappears, in exchange for one more step: the customer has to register the mandate with their bank. If their bank has no record of the mandate, it rejects the debit.

The mandate: what it is and what it must include

The mandate is the authorisation the customer signs so that you can debit their account. Without it there is no valid direct debit. The essentials:

• Unique mandate reference, which accompanies every debit.
• Your SEPA creditor identifier, assigned by your bank.
• Debtor details: account holder and IBAN.
• Payment type: recurring or one-off.
• Scheme: CORE or B2B.
• Date and signature (or its electronic acceptance).

Keep the mandate for as long as you use it and for as long as your bank requires after the last debit. If there is ever a claim for an unauthorised debit, it is your proof.

In an online store, electronic acceptance at checkout is the most practical option: the customer enters the account holder and IBAN, ticks that they accept the mandate and confirms the order. For B2B, it is also a good idea to give them the mandate document so they can hand it to their bank before the first debit, or the first one will be rejected.

Check the details before they reach the bank

A mistyped IBAN produces a rejection days later, when the order has already been prepared. Validate it there and then:

• IBAN check digits: they catch almost all typing errors.
• Account holder required, matching the customer's registered company name when it is a business.
• Mandate acceptance recorded, with its date.

And all of this should be checked on the server, not just in the browser.

Pre-notification of the debit

SEPA rules require the creditor to notify the debtor of the amount and date before each debit. The default period under the SEPA rules is fourteen calendar days, unless you agree a different one in the contract or terms. In practice, an email with the amount, the expected date, your creditor identifier and the mandate reference does the job and avoids surprises for the accounts department.

When the debit comes back

SEPA debits can fail for several reasons, and each calls for a different response:

• Rejection before the debit: account closed, incorrect IBAN, mandate not registered (in B2B). Check the details with the customer.
• Return due to insufficient funds: the customer exists and wants to pay, but there was no money in the account. Get in touch and resubmit or collect another way.
• Refund requested by the debtor (in CORE): it may be an admin error or a dispute. Talk to them before debiting again.
• Mandate revoked: the customer has withdrawn the authorisation. Do not submit any more debits under that mandate.

What matters is that the order status reflects reality. A direct debit order is not paid when it is created, but when the bank credits the batch and the rejection period has passed. Marking it as “payment accepted” when it is generated is the quickest way to ship goods you never get paid for.

Organising the process

1. Decide who can pay by direct debit: only trade customers, those with a certain history, or everyone.
2. Set a batch schedule: weekly, fortnightly or per order. A fixed schedule makes reconciliation easier.
3. Generate the standard direct debit file (ISO 20022 format, pain.008) and upload it to your online banking.
4. Mark payments as collected or returned as the bank reports them, and have that update the order status.
5. Review returns every week and decide case by case.

If you also sell subscriptions, each renewal should create its own pending payment linked to that subscription, and revoking the mandate should stop the next renewal. And since the payment module handles bank details, it is one of those you most want to keep up to date, along with PrestaShop and PHP.

How to do it in PrestaShop

RKR Domiciliación SEPA adds direct debit as a payment method at checkout: the customer enters the account holder and IBAN and accepts the mandate, and those details are checked on the server. It supports the CORE and B2B schemes depending on the mandate type you configure. In the back office you have each customer's mandates, the payments waiting to be batched and the batches themselves, with the SEPA pain.008 file ready to upload to the bank. You mark each payment as sent, collected, returned or cancelled; when you mark it collected, the order moves to payment accepted, and returns are recorded with their reason. The customer receives a pre-notification of the debit by email with the creditor and the date. With RKR Suscripciones, each payment is linked to its subscription.