Do not introduce your business to the EU without SEPA

Breaking into the EU market could mean phenomenal growth for your e-commerce business.

But before you get the ball rolling, you need to become SEPA enabled.

Single Euro Payment Area (SEPA) is beneficial for e-commerce businesses for abundant reasons.

It allows you to process euro payments breezily and make them equivalent to domestic payments.

What’s more, SEPA seamlessly allows FinTech companies to transfer money in euros to bank accounts within just one working day.

This is generally affordable for all parties involved, including domestic and cross-border payments.

What are the benefits of SEPA payments?

• SEPA allows your business to send and collect EU payments.
• It has direct debit and credit options.
• SEPA credit transfers allow you to make payouts to your customers.
• The direct debit option allows you to collect payments without your customer having to be present.
• It lets you reach young customers who may not yet have a credit card.

How could the SEPA payment scheme help your business?

Easy payment collections
SEPA authorizes you to pull payments from customers (e.g. payments for subscriptions).

This gives you better control over collects which also means you’ll have more reliable cash flow.

More customers
As SEPA payments are widely accepted, even with customers who don’t own credit cards, this means you can target more potential clients.

What’s more, SEPA reaches clients on a global scale.

Flexibility
When it comes to claiming money for payouts, the SEPA scheme is quite flexible.

You can choose to calculate an exact amount that you need for a pay out or you can set a payment to automatically pay out when you need it to.

Less work
SEPA allows automatic payments, monitors payment statuses and notifies you about missed payments.

This drastically reduces the heap of work that collection teams undertake.

How does SEPA benefit your customers?

Convenience
As the SEPA direct deposit scheme lets you process a payment collection without the customer being present, there’s less of a hassle.

In the long term, this enhances the user experience.

Security
Your customers will feel secure with SEPA as it has a refund mechanism. This allows them to request a refund within eight weeks of them putting a direct debit through.

Furthermore, it will put them at ease because in the case where their accounts are wrongly debited, they have protection.

More accessibility
Your customers will be able to receive funds easily from their current account and from any place within the Single Euro Payment Area.

Know this before allowing SEPA payments
Although SEPA comes with an array of benefits for your business, beware, there could be some setbacks too.

In some cases, SEPA payments may take a long time to clear and it could take up to three days before you receive confirmation that a customer has paid.

Another concern is that any shopper can perform a chargeback for up to eight weeks after a purchase, without having to request permission from your end.

Yikes!

SEPA best practices to keep in mind before you decide to take the SEPA plunge:

Consider setting a maximum transaction value for SEPA direct debits. You could check your average transaction value to decide on this amount.

• Consider having a seven-day shipment holding. This will help your business to avoid excess losses if a payment is unsuccessful.
• On the confirmation page, state clearly that a payment could take up to seven days to complete.
  
  This will ensure they won’t get a surprise when they’re charged for their purchases later.
• Emphasize that refunds could take a few days too. Make this clear in your return/refund policy.
  
  This lowers the chances of customers initiating chargebacks.
• Connect with local debit collecting agencies.
  
  In cases where you can’t collect funds after hefty transactions, you’ll be able to crosscheck your customers with these agencies.
  This is helpful, particularly in situations where an item has been shipped already.
• Ensure that you have an up to date IBAN blacklist so you can easily identify and block payments from bank accounts which are invalid.
• Limit the number of orders a shopper can place within a specific timeframe. In the case of chargebacks, this means the losses will be lowered.

Now that you’ve gone through our comprehensive overview of how SEPA payments work, you’ll be able to customise the service to suit your business.

Remember, the way you choose to implement SEPA will depend on your business’s location, available providers and the cost of each option.

At Centrobill we’re experts in SEPA focused Direct Debit Payments. With our service, you can process transactions with ease as we have a large database of blacklisted accounts.

Furthermore, we work alongside debt collection agencies and have experienced up to 30% of returns on chargebacks and the associated fines were returned to clients.

With our team of professionals with a whopping 10 years of experience and an experienced team of Customer Service and Fraud agents, rest assured your online company will be in good hands.

Here’s to a booming e-commerce business with Centrobill, thanks to SEPA!