Disputes

Unlike most payment methods, SEPA Direct Debit does not offer a formal dispute process. Instead, chargebacks are a guaranteed right under EU regulations, enabling consumers to reverse payments with relatively few restrictions, depending on the reason and timing.

Additionally, SEPA Direct Debit does not support real-time authorization to check the available balance in the consumer’s account. This means a transaction may initially appear successful, even if there are insufficient funds, which can later result in a chargeback.

Consumers may also initiate a chargeback even after a refund has been issued. In such cases, we recommend reaching out to the consumer directly to resolve the matter and avoid further complications.

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SEPA Direct Debit is not currently available through the Disputes API.

Timeframe

SEPA Direct Debit chargebacks fall into two categories:

Unauthorized Debit
- Timeframe: Up to 13 months from the debit date
- Condition: The consumer claims they did not authorize the debit (e.g., no mandate exists or it was revoked)
Authorized Debit
- Timeframe: Up to 8 weeks (56 calendar days) from the debit date
- Condition: The debit was authorized, but later reversed either due to insufficient funds or because the consumer requested a refund (e.g., dissatisfaction with the product or accidental payment).

Best practice

Risk mitigation relies heavily on clear mandates, communication, and monitoring returns. Merchants usually:

Ensure valid mandates are properly collected and stored
Use advance notifications before charging the account
Ensure they have a good risk system in place and perform rigorous checks on the consumer
Consider a maximum transaction value for SEPA Direct Debit
Refunds are not taken into account

Thresholds

Chargeback ratios for SEPA Direct Debit are inherently higher than those for credit cards, due to the way SEPA is designed. Based on transaction volume, if a merchant's chargeback ratio exceeds 7.5%, PPRO may take action to reduce the risk—this can include working with the merchant to lower their chargeback rate or, if mitigation is unsuccessful or the volume poses a significant risk to PPRO's banking partners, suspending the merchant.