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SEPA payment method

Single Euro Payments Area (SEPA) Direct Debit, a common payment method in the European Union.

What does it do?

The European Union launched the Single Euro Payments Area (SEPA) to streamline payments across and among member states. To enable the direct debiting of each bank account within the SEPA region denominated in EUR, they created and enforced banking regulations.

How does it work?

Businesses must collect the IBAN formatted name and bank account number of their customers in order to debit an account. Customers must agree to a mandate during the payment flow so that the company has permission to debit the account. This mandate can be produced by Stripe for businesses to give to their clients.

A reusable, delayed notice payment option is SEPA Direct Debit. This means that after you initiate a debit from the customer’s account, it may take up to 14 business days—on average, five business days—before you receive news of the success or failure of a payment.

Rules and regulations

The SEPA payment method follows the payment processing rules of the European Payments Council, known as schemes. The payment service providers use the guidelines as mentioned on these schemes to make SEPA payments.

Banks are required by EU SEPA rules to charge the same fees for both local and international electronic payment transactions in euros. To make payments in euros, payers and the payees may have to bear the currency conversion fees (or divide the costs).This is applicable to Credit transfers, direct debits, ATM cash withdrawals, debit and credit card payments, and money transfers.

Who can use SEPA?

Not all of the 36 participating nations in SEPA are members of the euro zone or the European Union (EU). The nations that accept SEPA payment options are listed below:

  • Austria
  • Belgium
  • Cyprus
  • Estonia
  • Greece
  • Ireland
  • Italy
  • Finland
  • France
  • Germany
  • Denmark
  • Hungary
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Portugal
  • Slovakia
  • Slovenia
  • Spain
  • Bulgaria
  • Croatia
  • Czech Republic
  • Poland
  • Romania
  • Sweden
  • Andorra
  • Iceland 
  • Liechtenstein
  • Monaco
  • Norway
  • San Marino
  • Switzerland
  • United Kingdom (UK)
  • the Vatican City State / Holy See

How to set up SEPA payment?

SEPA transfers are set up in a manner akin to how ACH transfers are set up in the US. The following are the steps to setting up a SEPA payment:

1. State the amount of the payment and the payer’s  bank account information.

2. Submit an “SDD Mandate” to the payer. The European Payment Council (EPC) has mandated the use of an authorization agreement that enables the payer to give the biller permission to withdraw money from the payer’s account.

3. Configure the SEPA Direct Debit feature in the customer’s or payee’s bank account.

4. Send the payment(s) to be processed.

Getting started SEPA payment methods with Stripe

Getting started with the SEPA payments are easy when you have the stripe plugin installed. All you need to do is to create an object to log payments, gather payment method details and mandate acknowledgement, and send the money to Stripe for processing in order to accept SEPA Direct Debit payments on your website. 

The PaymentIntent payment object is used by Stripe to track and manage all payment states up until the completion of the transaction.

Without modifying your code, you can add SEPA Direct Debit and other payment options from the Stripe Dashboard. By taking into account the currency, payment method restrictions, and other factors, Stripe decides what list of accepted payment methods to display to each consumer.

Note: Prices for all line items must be expressed in Euro in order for SEPA Direct Debit payments to be supported in Checkout (currency code eur).

Payment Processing Limits

The maximum amount for any SEPA direct debit transaction is 10,000 EUR. As you execute more SEPA direct debit payments, your weekly limit quickly rises from the initial 10,000 EUR for new users.


If your current payout timing is less than 5 business days or 7 calendar days, SEPA Direct Debit payments are subject to a 5 business day payout timing. Payout timing for SEPA Direct Debit payments resumes normal operation once you process 35,000 USD worth of SEPA Direct Debit transactions.

Refund and disputes

For SEPA Direct Debit, the refund window is up to 180 days following the first transaction. There is no appeal mechanism and customers have up to 13 months after the original payment to challenge a payment through their bank.

Setting up Webhooks

Webhooks are a very important aspect when it comes to setting up your SEPA payments with Stripe. You can automatically change the payment status from “Pending” to “Succeed” using Stripe webhooks. 

To enable your SEPA Direct Debit and iDEAL credentials, you must generate and enable a webhook with Stripe. The process of generating a webhook differs depending on how your Stripe account was set up. You can check the process described in this article.

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