SEPA: a direct debit to Lisbon costs the same as one to Lugo
It has been running for more than a decade and there are still companies asking for “a Spanish account”. As well as being unnecessary, it is prohibited.
The single euro payments area, in which transfers and direct debits work under the same rules in every country that belongs to it.
Single Euro Payments Area. Its reference legislation is Regulation (EU) 260/2012, and the operating schemes are published by the European Payments Council.
What it covers
The 27 European Union countries and several more: Norway, Iceland, Liechtenstein, Switzerland, Monaco, San Marino, Andorra, the Vatican and the United Kingdom. Everything is identified by IBAN, which in Spain has 24 characters.
The instruments
- Credit transfer (SCT) and instant credit transfer (SCT Inst).
- Direct debit (SDD), in two schemes: Core, valid with any debtor, and B2B, only between businesses and professionals.
What you cannot do
Requiring a client to have an account opened in a particular country is what is known as IBAN discrimination, and the regulation prohibits it. If your client has an account in France and wants to pay by direct debit, you have to be able to collect from them just as you would from someone in Valencia.
An example
An association with 210 members, 14 of whom live outside Spain, sends a single monthly batch with all 210 debits. The 14 foreign IBANs go in the same file, in the same format and at no extra cost.
The mistake that comes up most
Setting up a payment process that only accepts IBANs starting with ES. As well as excluding perfectly good clients, it is a practice prohibited by Regulation 260/2012 and a commercial friction you pay for in cancellations.
Where this carries on in Cairos: Payments, batches and forecasting.
Terms that go with this one
Almost no tax concept makes sense on its own. These three are the ones that most often turn up beside it.
Direct debit
The collection order the creditor presents to their bank so that the amount leaves the debtor's account, backed by a mandate the debtor has signed.
Payments and bankingSEPA mandate
The authorisation signed by the debtor allowing the creditor to raise debits against their account and their bank to honour them.
Payments and bankingDirect debit batch
The set of debits or payment orders sent to the bank in one go, in a file in a standard format.
This, handled without thinking about it
Cairos keeps the invoices, the record books and Hacienda's forms from the same data, so the theory on this page turns into boxes that are already filled in.
No card and no minimum term.