SEPA Core (B2C)
Introduction
SEPA Core, also known as SEPA Direct Debit Core (SDD Core), is the standard direct debit scheme for collecting payments from individual consumers across SEPA-participating countries. It enables merchants to automate payments by debiting customer bank accounts based on an authorized mandate. SEPA Core is widely supported by banks within the SEPA region and is particularly useful for recurring payments such as subscriptions, utility bills, or installment plans.
To process a SEPA Core payment, the merchant must first obtain a mandate from the customer. This mandate authorizes the merchant to initiate direct debits from the customer's account. SEPA mandates can be created through SmartPay's Web SDK or API flows. When using the Web SDK without integrated mandate management, only SEPA Core payments with JPM MPS as the creditor are supported. Mandate management is required to enable merchant-specific Creditor Identifier and to support SEPA B2B payments.
Merchants must retain a record of the mandate to comply with SEPA regulations and to handle potential disputes.
A key feature of SEPA Core is its built-in consumer protection. Customers have the right to request a full chargeback within 8 weeks of the debit being processed, with no requirement to provide a reason. Additionally, if a transaction is unauthorized, meaning no valid mandate exists, the customer can dispute the debit and claim a chargeback for up to 13 months.
While these chargeback rights provide customers with flexibility, they introduce financial risks for merchants.
To mitigate these risks, merchants should implement pre-notifications to inform customers of upcoming debits, verify customer account details before processing transactions, and maintain accurate mandate records.
SEPA Core transactions are processed asynchronously. After initiation, there is a processing time of 2 to 5 business days before funds are settled. During this period, the transaction may be rejected due to insufficient funds, a closed account, or a revoked mandate. Merchants must account for these potential delays when managing payment flows and cash flow expectations.
To integrate SEPA Core into a payment flow, merchants can use SmartPay's mandate management service or Web SDK-based processing. The Web SDK provides an embedded form for collecting SEPA mandate details, ensuring compliance with regulatory requirements and reducing the need for merchants to handle sensitive payment information directly. If mandate management is required as a separate service, SmartPay offers API-based mandate creation, retrieval, and validation.
For SEPA Core (B2C) payments, J.P. Morgan Mobility Payments Solutions S.A. always acts as the creditor, with mandates created, signed and stored on behalf of JPM MPS. For SEPA B2B payments, the creditor can be either JPM MPS or the merchant, depending on the configuration. When mandates are collected via the Checkout Web SDK, only SEPA Core payments with JPM MPS as the creditor are supported. Mandate management is required to enable merchant-specific Creditor Identifiers to support both SEPA Core and SEPA B2B payments. For more information, please refer to our SEPA integration options table.
SEPA Core is an effective solution for businesses handling consumer payments, offering a standardized and efficient approach to direct debits.
However, due to its chargeback policies and processing time, merchants should assess the potential impact on payment operations and implement risk-mitigation strategies.
If you are unsure which SEPA scheme to implement, contact your assigned Product Solution Specialist (PSS) for guidance.
Transaction Types
SmartPay supports SEPA Core (B2C) for collecting direct debits from consumers. Merchants can use either the Web SDK or backend APIs to collect mandate authorizations and initiate payment setup. SEPA Core mandates do not require bank validation, allowing for quicker onboarding, though they are subject to consumer chargeback rights. Once the customer provides their IBAN and signs the mandate, the mandate is stored and linked to a SEPA B2C stored payment option within the SmartPay platform.
All SEPA Core transactions are asynchronous and processed over several business days. During this time, the transactions may be rejected due to issues such as insufficient funds or revoked mandates. Merchants must retain a record of each mandate and monitor rejection events to maintain compliance.
SmartPay enables both Customer-Initiated Transactions (CIT) as well as Merchant-Initiated Transactions (MIT) for SEPA Core, with distinct integration behaviors. CIT flows support first-time conversions and immediate customer engagement, while MIT flows are designed for recurring revenue use cases. Merchants using SEPA B2C for MIT payments should account for chargeback risk and ensure that proper pre-notifications and customer communication are in place.
CIT
CIT payments are initiated by the customer during a checkout flow. The Web SDK is used to capture the customer's IBAN and secure digital signature. The transaction is submitted immediately following mandate creation, making this flow ideal for one-off payments or first-time purchases. Each CIT payment is tied to an explicit customer action.
For more information, please refer to our Integration Journey.
MIT
MIT payments are recurring transactions that do not require customer involvement at the time of execution. After a SEPA Core mandate is created and stored, merchants can schedule automated MIT payments, such as subscriptions or renewals, using SmartPay's Subscription or Payments APIs. The mandate is referenced internally during each payment call.
Please refer to details on the standard MIT flow here.
SEPA Mandate Distinctions
SEPA DD payments require a signed mandate for each payment flow.
For CIT, a one-time mandate must be signed before the transaction can proceed. This mandate is valid only for that specific transaction and expires immediately afterward. For MIT, a separate recurring mandate must be signed. This mandate grants the merchant permission to collect payments at regular intervals or upon specific triggers defined in the agreement. It is important to note that these mandates are not interchangeable, a CIT mandate cannot be reused for MIT flows and vice versa. Both must be created, stored and managed independently.