SDD — SEPA Direct Debit

Definition

The SDD (SEPA Direct Debit) is the SEPA direct debit: the payee debits the payer's account directly, based on a mandate the payer has signed.

It is the logical opposite of the SCT (where the payer pushes the money): here, the payee pulls it. It is the go-to instrument for subscriptions and recurring invoices.

SDD vs SCT: who pushes, who pulls

SCT / SCT Inst — push: the payer initiates. Ideal for one-off payments.
SDD — pull: the payee initiates, based on a mandate. Ideal for recurring flows (subscription, rent, invoice).

The SDD reduces friction on the payer's side (nothing to do each month), but requires a legal basis — the mandate — before any debit.

The 2 schemes: Core and B2B

SDD Core — for consumers: submission lead time of D-2 or D-1, refund possible within 8 weeks without reason (and 13 months for an invalid mandate). The payer can suspend or cancel their mandate at any time.
SDD B2B — reserved for businesses: no refund once the debit is executed, shorter banking lead time (D-1), scheme not mandatory for banks.

The Core/B2B choice is made at the time of the mandate.

The SEPA mandate (RUM)

This is the central legal building block:

identified by a RUM (Référence Unique de Mandat / Unique Mandate Reference), unique per creditor-debtor pair;
contains the creditor, its ICS (SEPA Creditor Identifier), the debtor's IBAN, the type of direct debit, the date and the signature;
paper or electronic (e-mandate);
to be kept for at least 14 months after the last direct debit.

Without a valid mandate, no debit is possible.

What an SDD allows

Debiting fixed or variable amounts, recurring or one-off.
Managing subscriptions, recurring invoices and credit repayments.
Operating in all SEPA countries with a single mandate.
Collecting regularly without any action from the payer.

What an SDD does not allow

Debiting without a valid mandate: immediate sanction, with the dispute won by the payer.
Guaranteeing success: a payer without funds triggers a rejection (R-message) and a manual follow-up.
Instant speed: an SDD takes 2 to 5 days to become "final" on the creditor's side (the dispute window).
A currency other than EUR.

In the PSD2 ecosystem

The SDD is not within the direct scope of PSD2 (which addresses AIS and PIS), but it is the natural instrument of any product handling recurring flows. Note: there is no "PISP-initiated SDD" — a PISP cannot set up a mandate on your behalf.

Concrete examples

Consumer subscriptions: Netflix, Spotify, Free, Engie, EDF and Canal+ collect via SDD Core, on a mandate signed online at sign-up.
B2B SaaS: Pennylane, Notion or Datadog collect via SDD B2B when amounts are significant and an 8-week dispute would be risky.
Direct-debit platforms: GoCardless (the European leader) and SlimPay handle mandates, debits, follow-ups and reporting for thousands of SMEs, without direct interaction with the bank.
Classic mistake: forgetting the pre-notification (informing the payer of the amount and date at least 14 days before the first debit, unless otherwise agreed) — without it, the debit can be disputed.
Rejection risk: a payer who disputes without reason costs refunds and SEPA penalties — hence the importance of clean onboarding (clear mandate, double opt-in, confirmation email).
PSD3 evolution: the PSR does not overhaul the SDD but tightens anti-fraud obligations on payees — creditor KYC and rejection-rate monitoring to be hardened.