SEPA Direct Debit and iDEAL are payment methods available to European stores that let you directly debit your customers' bank accounts as a form of payment. These methods work even if the accounts are with different banks, or you and your customer are located in separate countries. 

This guide provides an overview of how these payment methods work together. Refer to Enabling SEPA Direct Debit and iDEAL for complete instructions to enable this on your store.

Eligibility 

To be eligible to use SEPA Direct Debit and iDEAL you must:

• Use Stripe as your payment processor.
• Have your store process orders in Euros.
• Use the Recharge Checkout on Shopify, Recharge Checkout on BigCommerce, or the BigCommerce Checkout Integration.

SEPA Direct Debit

SEPA Direct Debit is a form of debiting a customer’s bank account directly between banks, using the International Bank Account Number (IBAN) standard. SEPA Direct Debit allows you to debit a customer's bank account, even if the account is held with another bank.

SEPA Direct Debit works across all European Union countries and offers a simple and cost-efficient way to accept payments, especially recurring payments. This process usually involves multiple banks, often operating in different countries. Depending on the banks and countries involved, it may take anywhere from 2 -14 days for the money to be transferred from one bank account to another.

As we are unable to immediately collect payment from the customer when SEPA is used as a payment method, we introduced both a pending charge and shipment record, as well as a locked subscription, to manage these customers.

iDEAL

iDEAL is a bank-to-bank method that only works between Dutch banks, but settles almost immediately.

This payment method requires customers to authenticate the purchase with their own bank and approve the transaction, making it virtually impossible to use iDEAL for recurring payments.

As such, we can use iDEAL to process checkout orders and then switch to SEPA Direct Debit for future recurring payments.

Enable SEPA Direct Debit and iDEAL

Refer to enabling SEPA Direct Debit and iDEAL for complete instructions on getting started with this payment method.

Switch from iDEAL to SEPA Direct Debit for recurring payments 

Stripe handles the process of switching the payment method from iDEAL to SEPA Direct Debit and updates our database with the new payment credentials. 

The process to switch payment methods is straightforward and requires no additional work from you or your customers.

Manage customers using SEPA Direct Debit

Payments are not instantly captured when using SEPA. Recharge added the following feature to make it easier to manage customers using this payment method:

Pending charges

When a customer checks out with a subscription product using SEPA Direct Debit, their payment is not settled immediately as payment confirmation from the banks involved is required. While this process generally takes less than 48 hours, it may take up to 14 days for some banks to settle a customer's payment. 

To account for the order, Recharge creates the charge and shipping records for any new charges. For checkout orders, Recharge also creates the necessary subscription and customer records. These records are marked with a pending status until Recharge receives confirmation that the payment was settled. The pending status is removed once the payment has successfully been settled. For more information on pending charges, see Handling pending charges.

Queued charges are not created in Recharge or your ecommerce platform until the existing payment is settled. 

Process pending SEPA orders: 

1. In the merchant portal, click Customers and select Customers from the dropdown.
2. Search and select the customer. 
3. On the pending order, select Submit now.
   
4. Click Process order to confirm.
   

Locked subscriptions 

Recharge set the subscription to a locked state while the charge is pending. This means the charge, shipping information, and subscription cannot be altered, until the charge is cleared, or returns with an error. 

A subscription can be cancelled while pending, but no other changes can be made.

Recharge admin

With the pending state on charges, there is a tab in the orders list to track charges marked as pending. The merchant portal highlights when charges, orders, subscriptions, and customers are pending. 

A limitation with this payment method is that you will no longer be able to update the customer's SEPA Direct Debit information on their behalf in the merchant portal. 

SEPA Direct Debit requires that the customer gives their permission to debit money from their account, by supplying their IBAN during checkout. Customers must go in and update their information themselves via the customer portal, so that they can authorize these changes.

Notifications

The Delayed payment checkout success and the Delayed checkout payment failed are two notifications specifically created to help you manage customers using SEPA Direct Debit. These are found in your Recharge notifications.

Charge errors

If a SEPA Direct Debit charge results in an error, the charge and shipping records are updated, and the charge enters the regular retry process.

Once the charge is retried, the shipping records are updated to "pending."

Error messages

Stripe may return the following charge errors depending on the customer's order:

Charge errors on checkout orders

Unlike our other payment methods, with SEPA we now have to wait for the settlement to know if a charge was successful or failed, which means we are unable to confirm at the checkout if there is an error with the charge. 

Since the payment isn't processed immediately at checkout if there is an error capturing the payment, the customer will need to update their payment information in their customer portal before the charge is tried again.

Customers are notified of any charge errors at the checkout through our new email notification Delayed checkout payment failed. You can edit this notification by clicking Settings in your merchant portal and selecting Notifications.

Cancellations and refunds

Due to its delayed nature, SEPA Direct Debit cancellations and refunds are handled slightly differently from regular credit card cancellations and refunds.

Cancellations

Cancellations are not instantaneous when a charge is pending. It is possible to cancel a pending charge, however, at this time we have to cancel the full charge, resulting in cancelling the entire subscription.

SEPA Direct Debit transfers cannot technically be cancelled. As a workaround Stripe queues up a refund and waits for the initial charge to settle. If the result of the charge is an error, the queued refund is discarded. If the charge is successful, the refund is applied.

It is possible to cancel just the shipment, and leave the subscription in place. However, this does not automatically refund the customer, which means the refund will have to be applied manually.

Refunds

Refunds must be processed within 180 days of the settled transaction and can be applied even when a charge is pending.

Refunds can be full or partial but never more than the original charge, similar to our existing refund processes. It is not possible to process an additional refund while the original refund is pending.

As with the original charges, refunds follow the same delayed process and will cause the charge to enter a pending state again.

You can refer to the Pending status reason on the Pending orders tab, to determine why an order is in a pending state.

Communicating cancellation and refund requests

Besides planning for cancellations and refunds, it is important to consider that with multiple banks involved in addition to Stripe, there’s a higher likelihood of confusion for everyone involved.

For example, a customer could go to their bank and dispute the charge in addition to disputing the charge with you and possibly Stripe.

Notifications

As a legal requirement when using SEPA Direct Debit, you must make sure that you have the Upcoming charge email notification enabled in your Recharge notification settings, or use a third party to alert your customers of upcoming orders. 

The default notification includes the required information, with exception of a Creditor ID, which will need to be added as raw text to your notifications. 

Please reach out to Stripe's support team if you have additional questions about the Creditor ID. 

Delayed payment checkout success notification

When enabled, customers receive the Subscription activation notification once the order is processed. Due to the delayed nature of SEPA Direct Debit, customers checking out with this payment method won't receive this notification immediately. 

To notify your customer of their order, you can enable the Delayed payment checkout success notification. This notification informs the customer that the order request has been received, and will be created once the payment has settled. 

Customers will receive any additional notifications you may have enabled, such as the order created notification, once the payment settles. 

Delayed checkout payment failed notification

If a customer uses SEPA Direct Debit as their payment method, and the charge fails, no order is created, and the charge is left in an error state. The Delayed checkout payment failed notification notifies customers of the attempted order and the failed transaction and refers them to the Customer Portal to update their payment information. 

Considerations

• For merchants using the Recharge Checkout on BigCommerce, there is a delay between the charge settlement and order creation. At the checkout, Recharge creates a “pending” charge that can be settled in minutes for iDEAL payments but may take days for other SEPA payments to settle. Once the payment is settled and Stripe confirms it is successful, there can be up to a one-hour delay with the adapter capturing the new order and sending it to BigCommerce.
• If you offer iDEAL as a payment option, it will be used for the initial checkout payment and all recurring payments will use SEPA Direct Debit.
  • iDEAL payments are settled almost immediately, but since they require the customer to be present to authenticate the payment at the time of the charge it can’t be used for recurring payments.
• Unlike our typical payment methods, SEPA Direct debit payments can take up to 14 business days to settle but are usually completed in 24-48 hours.
• Customers and subscriptions are only considered active once the payment has been settled. While the initial checkout charge is pending, they are considered pending.
• If a charge fails, it’s usually due to insufficient funds or a wrong account number. In either case, the charge will enter the regular dunning process.
• Refunds must be processed within 180 days of the transaction. Like the initial charge, refunds can take up to 14 days to process.
• Disabling SEPA in the checkout settings will hide it for new users, but allow existing users to continue using this payment method.