Issue and sign SEPA mandates electronically

The most important facts about the SEPA mandate

The SEPA mandate is an important component of the European payments system which facilitates the processing of payments throughout the EU and some other countries. The clear legal basis creates trust and security in this means of payment. Companies and private individuals benefit from this simple and convenient cashless payment option. Below we answer all the important questions about the SEPA mandate.

What is a SEPA mandate?

To improve the freedom to provide services, the SEPA Regulation (Regulation (EU) 260/2012) created a standardised payment area for credit transfers and direct debits. For Germany, the regulation was accompanied by the SEPA Accompanying Act of 3 April 2013. These regulations have been fully implemented as of 1 February 2017. Since then, bank customers have been able to issue direct debit mandates. This has the advantage that the invoice amount is automatically debited from the account and does not have to be transferred.

An example would be the monthly instalment for a rented flat. If you issue a SEPA direct debit mandate for this, the amount due will be automatically debited from your bank account each month.

Note

SEPA stands for Single Euro Payments Area

Where can a SEPA mandate be used?

The SEPA mandate can be used throughout the European Union (EU), in the United Kingdom, in small states such as Monaco, San Marino, Andorra and Vatican City and in the EFTA (European Free Trade Association), i.e. in Iceland, Liechtenstein, Norway and Switzerland.

What types of SEPA mandate are there?

A SEPA mandate can be divided into different types:

Single mandate / multiple mandate
Core direct debit / business-to-business direct debit

Single mandate and multiple mandate

As the name suggests, the single mandate is a one-off direct debit authorisation. A certain amount is debited from the account once.

In the case of a multiple mandate, an amount is debited from the account for an indefinite period and at certain intervals. This continues until a revocation takes place or the multiple mandate loses its validity. This is the case if no amount has been debited within 36 months of the mandate being issued.

SEPA core direct debit mandate and SEPA business-to-business direct debit mandate

A distinction can also be made between a core direct debit mandate and a corporate direct debit mandate.

A core direct debit mandate is a payment in the B2C area (business-to-consumer). For example, a private individual buys a mobile phone from an online shop and gives the company in question a direct debit authorisation. This is a simple SEPA core direct debit mandate.

A SEPA business-to-business direct debit mandate is a payment in the B2B area (business-to-business), i.e. a payment transaction between two companies. For example, a company regularly purchases production goods from another company and therefore issues multiple company direct debit mandates.

What data is required for a SEPA mandate?

For a SEPA direct debit procedure, the IBAN (International Bank Account Number) and BIC (Business Identifier Code) are required. The account number and sort code are no longer relevant.

In addition, the payee, the amount in euros, the intended purpose and details of the account holder (name, IBAN) are entered in a similar way to a bank transfer.

Can a SEPA mandate be issued electronically?

Is there a form requirement? People often ask whether there are special form requirements for the SEPA direct debit mandate. It has been clarified several times that there are no form requirements for issuing a direct debit mandate.*

However, it should be noted that, in case of doubt, proof must be provided that the direct debit mandate has been issued. It is therefore recommended that a SEPA mandate including the necessary signatures be issued in paper form or digital form.

* Bundestag Resolution recommendation on the SEPA Accompanying Act BT 17/11395, 7 November 2012 SEPA Council, 8th Meeting, 21 August 2013.

How is a SEPA direct debit mandate issued electronically?

If a company has an electronic signature solution such as inSign, this software can be used to create a template for SEPA direct debit mandates and sent to the buyer or business partner if required.

The signatory receives the document by e-mail, for example, opens it, enters their bank details and signs digitally.

With the software solution inSign it is also possible to create a weblink. The company can simply integrate the SEPA mandate as a weblink on the website. Website visitors can then call it up, fill it in and sign it with a single click. As soon as a signature has been provided, the company automatically receives a notification and sees the process in its process management system. The person who issued the SEPA mandate can download and save the document.

What are the advantages of electronic processing?

Online banking is very widespread. The majority of bank customers use this function because it is more convenient, simpler and faster. Numerous purchases and transactions are processed via online shops. Business processes are becoming increasingly digital. If everything works digitally these days, you no longer want to go to the bank for a direct debit mandate.

Advantages of electronic processing:

Time and cost savings / no journey to the bank
Possible at any time / not tied to the bank’s opening hours
Less paper consumption
End-to-end digital processes for companies and private individuals

More about the electronic signature inSign

Find out more about the electronic signature solution inSign. Get the most important facts summarised in a PDF.

Summary

With the introduction of the SEPA mandate, a simple and convenient payment instrument was created. This is an authorisation to the payee to collect invoice amounts from an account on a regular or one-off basis. Thanks to digitisation the payer no longer has to go to the post office and can issue the direct debit authorisation much more quickly.

We would like to point out that we do not provide legal advice and recommend that you seek legal advice for a final assessment. For example, you can contact mindtrace Stieber Beratung GbR for more information.

About the author

Christina Detling – Online Marketing Manager

Christina has been working at inSign for over four years and is happy to pass on her knowledge of electronic signatures and digitisation.