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What is SEPA direct debit?
What is SEPA?
SEPA stands for 'Single European Payments Area'. It harmonises the way retail banking operations (money wire, direct debit or banker's card) are handled in the SEPA area. The SEPA area includes all European Union member states and Iceland, Liechtenstein, Monaco, Norway, San Marino and Switzerland.
A major change of SEPA - as of February 1st 2014 - is that the IBAN is required for money wires in EUR to a beneficiary in a SEPA country. The BIC of the beneficiary's bank is required as well.
What is IBAN ? What is BIC/SWIFT?
IBAN - short for 'International Bank Account Number' - represents the international notation of the old national bank account number. It allows you to easily execute money wires in EUR within the borders of the SEPA area.
The IBAN of a Belgian bank account always has the following format: BEXX XXXX XXXX XXXX. The first 2 characters are always BE and the next 14 characters will always be digits. The IBAN can have a different format in other countries: the IBAN can consist of up to 34 alphanumeric characters.
Along with the IBAN, you will need the BIC (Bank Identifier Code) to execute a money wire. The BIC is an identification number of the bank. Keytrade Banks BIC is: KEYTBEBB. To execute a money transfer in EUR to an account at Keytrade Bank, one needs the IBAN of the beneficiary's account as well as Keytrade Bank's BIC.
What is SEPA Direct Debit?
SEPA Direct Debit is the official name for: European Direct Debit. Since the 1st of February 2014 direct debits within the SEPA area are treated in a uniform way. 'Old style' direct debits (also called 'DOM80' or Belgian direct debit) are no longer offered, and only SEPA Direct Debits can be created.
What is the difference between SEPA Direct Debit and DOM80?
It used to work like this: you were a customer of company ABC, a supplier of a certain (recurring) service. This company offered you the possibility to use the automatic payment method for your bills, to ensure that you wouldn't forget to pay them. Such an automatic payment of bills was called a direct debit (DOM80). You gave your bank an instruction to create a direct debit in favor of company ABC. The moment you were no longer a customer of company ABC, you asked your bank to stop all direct debits to that company. In other words: the management of direct debits (DOM80) was possible via the bank.
This changed since the introduction of SEPA Direct Debit. It is no longer possible to create a DOM80 direct debit. A SEPA Direct Debit is now handled completely by the supplier and no longer by the bank. If you wish to create, modify or cancel a direct debit you are supposed to contact the supplier/creditor, and not the bank.
How to create or cancel a SEPA Direct Debit?
A SEPA Direct Debit is managed entirely by the supplier/creditor. In order to create, modify or cancel a SEPA Direct Debit, you will need to contact the supplier/creditor.
SEPA Direct Debit: what are the features at Keytrade Bank?
With regard to the creation, modification or cancellation of a SEPA Direct Debit mandate, you now need to contact the supplier/creditor - and no longer the bank. However, you have several useful possibilities at your disposal on Keytrade Bank's website:
- Payment to be executed: The SEPA Direct Debit payments that will be executed can be seen on the secure website of Keytrade Bank a couple of days in advance.
- Refund: You are able to ask for a refund via your online banking. Lets assume that the supplier/creditor has charged you too much for a certain bill. SEPA Direct Debit offers the possibility to obtain a refund. This refund can be requested up to 8 weeks after the execution of the SEPA Direct Debit payment. The refund is executed instantly. If you ask for such a refund we would advise you to contact the supplier/creditor to make an arrangement about the amount that needs to be paid, and how the payment needs to be done.
- Blacklist: Another possibility that SEPA Direct Debit offers is the creation of a blacklist. This blacklist allows you to refuse a SEPA Direct Debit payment for a certain supplier/creditor (for one or more mandates you gave this company) or to limit the amount (for example: for company ABC you create an order that no SEPA Direct Debit payment in favor of ABC can be more than 120EUR ). You can even block one or more of your current accounts for all SEPA Direct Debit payments.
SEPA Direct Debit: what modifications are possible online?
Depending on the state of a certain SEPA Direct Debit payment you have a range of possibilities to intervene if required. The possibilities you have on Keytrade Bank's website are:
- Reject this payment once: in your opinion a specific planned payment is incorrect. This functionality allows you to refuse this one and only payment. This reject is possible if the SEPA Direct Debit payment has not yet been executed. Other payments for the same supplier/creditor can and will still be executed.
- Request a refund: you feel that an already executed SEPA Direct Debit payment is incorrect? You have up to 8 weeks to ask for a refund, should you feel that an already executed SEPA Direct Debit payment was incorrect.
- Limit payment amount: by using this functionality you do not allow e.g. for company ABC - any SEPA Direct Debit payments larger than an amount chosen by you. This only relates to the given mandate. This won't have any influence on any other mandate for the same supplier/creditor.
- Block payment (recurring): this allows you to refuse any SEPA Direct Debit payments for a given mandate of a certain supplier/creditor. This blocking doesnt apply to other mandates for this same supplier/creditor. Payments of other SEPA Direct Debit mandates for this supplier/creditor will still be executed.
- Block creditor (recurring): block all SEPA Direct Debit payments for supplier/creditor ABC. This relates to all mandates you might have for this supplier/creditor.
- Block all SEPA Direct Debits: this will block the payment of all SEPA Direct Debit mandates on this current account.
- Cancel your request: you rejected or requested the refund of a SEPA Direct Debit payment? A cancellation can be requested as long as Keytrade Bank has not definitively processed your instruction. Once your instruction (a payment rejection or a refund request) has been processed, it can't be undone anymore. This means that you will need to contact the creditor/supplier in case you erroneously made this request.
How to ask for a refund?
A refund can be requested up to 8 weeks after the execution of the SEPA Direct Debit payment. This can be done on Keytrade Banks secured website in the section: Banking > Direct Debit.
If a SEPA Direct Debit payment was executed based on an unexisting or an unvalid mandate you can ask for a refund up to 13 months after the execution of the payment. In this case you need to send a registered letter to 'Keytrade Bank | Department Backoffice Banking' - requesting the refund of the SEPA Direct Debit payment.
At what time SEPA Direct Debit payments are handled?
The secured site of Keytrade Bank offers an overview of all executed, refused and pending payments. For each payment the due date is indicated. The due date is especially important for all SEPA Direct Debit payments that still need to be executed. The attempt to execute the SEPA Direct Debit payment is done as of midnight on the due date. If there are insufficient funds on your current account at that very moment the payment will not be executed, but rejected. If this occurs, we would advise you to contact the supplier/creditor immediately in order to determine how and when the payment can be done.
What to do if a payment was rejected?
Only one attempt will be made to execute each SEPA Direct Debit payment. The execution attempt of the SEPA Direct Debit payment is done as of midnight on the due date. If there are insufficient funds on your current account at that very moment the payment will not be executed, but rejected. If this occurs, we would advise you to immediately contact the supplier/creditor in order to determine how and when the payment can be done.
What is SEPA Direct Debit B2B?
It is a type of SEPA Direct Debit that can only be used by a legal entity. The rule that a refund can be requested up to 8 weeks after the execution of the SEPA Direct Debit payment is not applicable to SEPA Direct Debit B2B. In other words, the debitor renounces his right to ask for a refund. This type of SEPA Direct Debit is not offered by Keytrade Bank.