SEPA Credit Transfer vs SEPA Direct Debit
Whether you’re handling a one-time payment or managing recurring transactions within the SEPA (Single Euro Payments Area) network, there are two convenient options at your disposal: SEPA Credit Transfer and SEPA Direct Debit. While both of these facilitate seamless transactions, they serve different purposes and come with distinct requirements.
So, what are the main differences between these two payment methods, and when should you use each?
SEPA Credit Transfer
SEPA Credit Transfer is a straightforward money transfer method, which only requires the recipient’s IBAN. It’s commonly used for making one-time payments for services or goods within the SEPA network.
This method is well-suited for both personal and business transactions, offering fast and secure transfers that typically reach the recipient’s account within one business day. A standardized and low-cost option for sending money across borders within the SEPA zone, SEPA Credit Transfer is also often used in online shopping and international transfers.
SEPA Direct Debit
In contrast, SEPA Direct Debit is managed by the customer’s bank, credit union, or another financial institution on their behalf. This process works under the conditions of a signed mandate, which gives the biller permission to collect payments directly from the customer’s account.
Most SEPA Direct Debit transfers are recurring payments of a fixed amount that are processed monthly or at regular intervals, which makes this method convenient for service subscriptions, rent, and paying off debts. As an automated solution for recurring expenses, it ensures timely payments without the need for manual action each time.
You can find more useful information in our FAQ section or on our blog.
