What is company required to do in order to collect payments through direct debit from its suppliers?

If the company want to collect its receivables using direct debit, it is needed to request its bank to provide the service of a SEPA direct debit. Each bank has its own specific criteria, on the grounds of which it decides, if it establishes a contractual relationship in order to execute SEPA direct debit with the company, the future Payee.

If the bank decides to concluded an agreement with the company, related to the SEPA direct debit execution, it arranges the CID for the Payee (Creditor ID) within the registry of the National Bank of Slovakia. Subsequently, the Payee concludes a Mandate with his Payers, in which he provides them with a unique identifier – Mandate reference. These mandates shall be kept by the Payee in a material and a non-material for the purpose of potential litigations. 14 days before each SEPO, the Payee is obliged to notify the Payer about the sum and date of the collection maturity date (e.g. in a form of invoice). SEPA direct debit shall be sent by the Payee through an electronic channel following the period set by the bank. (within the consumer scheme – CORE, first collection, 6 business days, and the other ones, so-called repeated collection, 3 business days, before the maturity date, while in a B2B business scheme these are two business days ahead of the maturity date, regardless on the fact, if it is the first B2B collection or the following B2B collection).

The Payer receives a SEPA direct debit directly onto his account as a pending transaction, while the bank the bank of the Payer will give him the right to cancel the direct debit up to the maturity date, in an electronic form or in a branch. If this is the case of a consumer direct debit in the so-called consumer CORE scheme, the Payer has the right to request his bank for a refund of collected payment in 8 weeks after the execution of direct debit, even without any purpose.

This is not characteristic for the B2B direct debit, where the Payer may refuse to execute a direct debit, but no later than one day before its maturity date.