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Direct Debit

A direct debit is a transfer initiated by the payee, who is the recipient of the payment. Direct debits are often used for recurring payments, such as utility bills, but may also be used for one-off payments. In any case, direct debits require a pre-authorisation (mandate) from the payer.

The European Payment Council launched the SEPA direct debit schemes in November 2009, defining common rules and procedure for a core scheme (scheme for consumers and enterprises) and for business-to-business (B2B only) direct debit schemes. The latter is largely based on the core scheme, but includes specific fea-tures for payment solely between corporate entities.

Since November 2009 an unitary European direct debiting procedure exists. It can be used for EURO-payments inland as well as in all SEPA-countries Europe-wide.

  • The direct debit applies to both consumers and companies (not final).
  • The direct debit substitutes today’s common Austrian procedures (direct debit authority procedures/direct debit procedures)

Important for SEPA Direct Debit

  • Use of IBAN (International Banking Account Number) and BIC (Bank Identifier Code)
  • Creditors have to sign an agreement with their bank to process SEPA direct debits
  • Use of CID (Creditor Identification)
  • Use of mandate references (New mandates are required for the SEPA DD B2B scheme!)
  • When using the SEPA DD schemes, a due date has to be stated.
  • To ensure settlement at due date, creditors have to respect the following deadlines (arrival at debtor bank):
  • SEPA DD Core scheme
    • One-off or first DD: 5 days before due date
    • Recurrent DD: 2 days before DD
    • Option: 1 day before due date
    • One-off, first, recurrent DD: 1 day before due date
  • An objection period of 8 weeks persists for direct debits if a valid mandate exists. For unavailable/invalid mandates you can enter an objection within 13 months.
  • Furthermore, DDs have to be marked as “One-off“, “First”, “Recurrent” or “Last”.
  • The SEPA direct debit schemes distinguish between these debtor groups
  • SEPA DD Core (with refund right) for consumers and corporate customers
  • SEPA DD B2B (without refund) only for corporate customers
  • Technical adaptation of the internal system for the XML format
  • Since April 2013 there is a possibility to abbreviate the objection period: intra-Austrian direct debits may be submitted not later than 1 bank-workday before the due date at the bank. Precise informations about objection periods are available at your house bank.

Creditor Identifier (CID)

The Creditor Identifier is part of the EU-wide SEPA standardisation process. In the absence of a national identification code for direct debit schemes, CIDs are issued by the Austrian National Bank.