It is important for companies to offer payment methods aligned with the habits and preferences of Spanish customers. In fact, 86% of customers say they usually abandon online purchases if their preferred payment methods are not available. Direct debits are one of these preferred methods. According to data from the Bank of Spain, direct debit accounted for over 12% of all electronic payments in the second half of 2024, making it one of the most popular payment methods in Spain.

Furthermore, the use of direct debits is expanding. This is reflected in the 3.2% year-on-year increase recorded in 2024. Therefore, integrating this payment method into your company’s payment stack could help boost sales. In this article, we explain direct debits, including how they work, the Spanish regulations that govern them, and steps to follow to accept them.

What’s in this article?

• What is a direct debit?
  
• How direct debit works in Spain
  
• Advantages and disadvantages of direct debits
  
• Types of businesses that benefit from direct debits
  
• How Spanish regulations govern direct debits
  
• How to use Stripe to set up direct debit payments for your business
  
• How to handle cancellations and returns of direct debits
  
• FAQs about direct debit in Spain
  

What is a direct debit?

Single Euro Payments Area (SEPA) Direct Debit is a payment method that allows an authorized company to automatically charge a recurring payment to a customer’s bank account. As a prerequisite, the customer must authorize the charges with a SEPA Direct Debit order. From then on, the amount is withdrawn directly from the customer’s bank account on the due date.

This payment method is common among companies that follow a subscription business model and facilitate transactions within the SEPA. This includes almost all member states of the EU. There are two types of direct debit. Their differences include the type of customer and the repayment period.

Direct debit for individuals

SEPA Core Direct Debit (known as “SEPA Core”) contractually links businesses with individual customers. The period for processing refunds is 8 weeks for authorized charges and 13 months for charges made without explicit customer authorization.

Direct debit for businesses

SEPA Direct Debit for Businesses (often referred to as “SEPA B2B Direct Debit”) is intended for transactions between businesses. In this case, the debits cannot be refunded after authorization.

How direct debit works in Spain

Despite their differences, the operation of both direct debit types is identical. Below, we summarize their three stages.

Signature

First, the customer must sign a SEPA Direct Debit mandate. If they do not sign this mandate, they cannot pay via direct debit because the company will not be authorized to withdraw the indicated amount from the customer’s bank account. To collect the signature, the mandate must contain the following information:

• Unique SEPA mandate reference number
  
• Customer’s name, address, and International Bank Account Number (IBAN)
  
• Business’s name, identifier, and signature
  
• Date of signature
  
• Type of payment
  

Receipt

Once the customer authorizes the direct debit, the amount owed must be proven by a bank receipt detailing information about the product or service sold.

Collection

To confirm that the bank is processing the collection of the bank receipt, it typically issues a remittance. This is a document that instructs the bank to handle several collections. Remittances must include the bank receipt information in an extensible markup language (XML) file that complies with the International Organization for Standardization (ISO) 20022 standard.

For recurring payments, remittances must be sent periodically to the bank. On the payment date indicated on the remittance, the bank withdraws the money from the customer’s account and deposits it into the company’s account.

Advantages and disadvantages of direct debits

For businesses with recurring revenue models, offering direct debit as a payment method has several benefits. There are some disadvantages they should take into account as well. We discuss both below.

Advantages of direct debits for businesses

• More predictable revenue
  Knowing the amount of income in each cycle and the payment date in advance can improve control over cash flow.
  
• Lower administrative burden
  By minimizing manual tasks, businesses can increase productivity and reduce administrative costs.
  
• Fewer declined payments
  Linking to a bank account can reduce the rate of declined payments compared to recurring card payments, which are subject to expiration and blocking.
  
• Customer loyalty
  Direct debits reinforce consumption habits and can help reduce the number of customers who switch between different payment solutions. Reinforcing this continuity is especially important in sectors with high competition or low-cost subscriptions.
  
• Greater security
  Direct debit payments are more secure for businesses because the SEPA mandate formalizes an agreement with the customer. In turn, this payment method is more secure for customers. The mandatory initial signature can help them avoid unexpected charges.
  

Disadvantages of direct debits for businesses

• Limited availability for B2B payments
  Banks are required to accept SEPA Core Direct Debit, but they are not required to accept SEPA B2B Direct Debit. Therefore, companies that receive many B2B payments should confirm that their banks offer this payment method.
  
• Delayed crediting
  Companies do not receive the money immediately when it is withdrawn from the customer’s bank account. Instead, banks can take until the end of the next business day after receiving the payment order to credit the funds to the company’s bank account.
  
• Less payment oversight
  Due to the convenience of automatic payments, some customers do not check SEPA Direct Debits frequently. Thus, it can take them longer to detect potential errors. For businesses, this translates into a greater administrative burden and some financial uncertainty stemming from possible late claims.
  

Advantages of direct debits for customers

This payment method also provides advantages to customers who use it for their recurring payments:

• Greater convenience: Direct debit payments are processed automatically, so customers don’t have to remember due dates and can avoid service interruptions.
  
• Time savings: By not manually handling payments, customers save time on repetitive tasks.
  
• Price reduction: Many companies reward customer loyalty with discounts on long-term subscriptions, such as annual subscriptions that offer one or two months of savings.
  

Types of businesses that benefit from direct debits

Direct debit can be very useful for companies that rely on subscription or recurring billing business models. In fact, 77.5% of recurring payments in Spain are processed through direct debits. Below, we provide a list of the types of businesses that can benefit most from offering direct debit as a payment method.

Subscription services

Stability is fundamental for businesses that offer subscription services, and direct debit is an ideal payment method for achieving this. For example, El País—Spain’s most popular daily newspaper—allows customers to pay for physical edition subscriptions by direct debit. Similarly, Legálitas—one of the most prominent legal advice companies for families, the self-employed, and small and medium-sized enterprises (SMEs) in Spain—uses direct debit as the main form of payment for its subscription service. In 2024, the company responded to almost 1.3 million queries.

Ecommerce stores that offer recurring purchases

Direct debit is very common among ecommerce stores in Spain that sell products customers replenish regularly, such as baby diapers or household cleaning products.

SMEs and large enterprises in B2B environments

In B2B relationships—such as those in B2B marketplaces—businesses often use direct debit to reduce a common problem: delays in payments from companies to their suppliers. In fact, almost 50% of Spanish companies in 2025 said they expect an increase in insolvencies among their B2B customers during the next year.

Companies in the financial sector

Companies that offer financial services often prefer direct debits for customers to repay loans and debts. This payment method helps reduce defaults, which are very common with consumer credit.

Nonprofits

Direct debit is beneficial for nongovernmental organizations (NGOs) because it encourages continuity of donations and guarantees the transparency of operations. According to the study Reality of Partners and Donors (Realidad del Socio y Donante), direct debit was the preferred payment method for people who donated money to nonprofits in 2023.

Real estate agencies

Generally, rental payments managed through real estate agencies are made by direct debit because this method can reduce late payments. In 2024, one in five Spanish households was rented. Therefore, it is likely that millions of SEPA Direct Debits are processed monthly for rental payments.

Public entities

Some government agencies that handle recurring charges of taxes and fees offer taxpayers the option of paying through direct debit. For example, the Spanish Tax Agency (AEAT) allows corporate income tax (IS) installment payments. This makes it easier for Spanish companies to pay this direct tax, which raised over €39 billion for the AEAT in 2024.

Utility companies

In the utilities sector, direct debit is the most widely used payment method in Spain. Payment amounts vary each month, depending on consumption. SEPA Direct Debits are compatible with variable amounts, which makes them an ideal payment method for companies with usage-based billing models.

How Spanish regulations govern direct debits

In Spain and Europe, there are several regulations that govern direct debits. Below, we summarize the most important laws and obligations:

• Regulation (EU) 260/2012 on direct debits in euros
  Regulation (EU) 260/2012 is the European regulation that governs payments in euros within the SEPA. It sets forth obligations such as signing a SEPA mandate and informing the customer of the amount and payment date at least 14 calendar days in advance, unless a different period is explicitly agreed upon in the contract.
  
• Anti-fraud law
  The anti-fraud law sets out the requirements of the software used to automatically generate invoices and manage payments. In addition to other features, this solution must record the correct amount charged when the direct debit payment is processed.
  
• The Create and Grow (Crea y Crece) Law
  The Create and Grow Law requires businesses that have commercial agreements with other companies or self-employed individuals to issue electronic invoices. That is, if a business receives recurring payments from other professionals via direct debit, it must issue and send invoices in electronic format after approval of the final regulations of The Create and Grow Law, scheduled for the end of 2026.
  
• General Law for the Protection of Consumers and Users
  This law unifies and regulates several consumer rights, such as the right of withdrawal, which allows customers to cancel contracts. When this occurs, businesses must stop direct debits and process corresponding refunds.
  

How to use Stripe to set up direct debit payments for your business

To implement this payment method and comply with current regulations, define the recurring products or services and clearly indicate them in the direct debit description. Then, determine the period between charges to customers’ accounts. Regardless of the billing frequency, you must inform customers in a transparent manner to comply with regulations and reduce failed payments. Stripe offers several helpful tools for this process.

To set up direct debit as your payment method, choose a payment processor that offers direct debit services and maintains close relationships with payment networks and banking partners, such as Stripe Payments. By integrating Payments into your technology stack, you can accept more than 100 payment methods from customers in more than 195 countries. This includes SEPA Direct Debits, which you can activate in a single click from your Dashboard. In addition, Stripe ensures that all payment processes comply with local regulations. Stripe Billing allows you to automate recurring payments and avoid manual processes, such as requesting payment from banks.

Lastly, set up recurring invoices and decide how they will be issued in each billing cycle. By working with a solution that integrates payments and billing—such as Stripe Billing—you can automate invoice management with Invopop. This is an electronic invoicing solution developed in Spain that complies with European regulations and mandatory electronic invoicing requirements established by the Create and Grow Law. From the Stripe App Marketplace, you can access this and many other solutions that easily integrate with your payment platform.

How to handle cancellations and returns of direct debits

Even with recurring payment systems, payment returns and cancellations are inevitable. The most common reasons involve lack of funds, the right of withdrawal, and billing errors. In any case, it is important to know how to handle these incidents.

Cancellation of direct debits

To cancel a SEPA Core Direct Debit before the next payment is processed, the customer must provide the bank with a signed document stating the date of the request. However, this request will only be accepted if it is submitted no later than one business day before the payment date. On the other hand—and unlike SEPA Core Direct Debits—payments authorized through SEPA B2B Direct Debits cannot be refunded.

Return of direct debits

Customers can request a refund from their bank. However, this process is only possible in two cases:

• The customer did not authorize the direct debit
  If the customer receives a charge on their account that they did not previously authorize, they have 13 months from the receipt of the charge to request a refund from their bank.
  
• The business did not clearly indicate the amount of the charge
  Despite having authorized the direct debit, the customer can request a refund within eight weeks. They must demonstrate that the business did not clearly indicate the amount or increased the amount after the customer made several payments of a similar amount.
  

If the customer requests a refund, the bank has 10 business days to either repay the full amount charged or reject the request. If the bank rejects the request, it must explicitly state the reason and how to appeal that decision.

FAQs about direct debit in Spain

Do all Spanish banks accept direct debits?

All banks are required to accept direct debits, provided they are core transactions (i.e., SEPA Core Direct Debits between a company and an individual). However, banks are not required to accept SEPA B2B Direct Debits. To check whether a bank accepts this B2B payment method, consult the European Payments Council (EPC) register.

What happens if the customer doesn’t have sufficient funds when a direct debit payment is processed?

If the customer doesn’t have sufficient funds at the time of payment, the bank rejects the SEPA Direct Debit. As specified in Decree Law 19/2018, the bank can also reject direct debits for other reasons, such as discrepancies with the account holders’ names or suspicion of fraudulent transactions. Subsequently, the company can reissue the payment or agree on another payment method with the customer.

What should a company do if the customer makes changes to a subscription in the middle of a billing period?

If the customer requests changes that affect the amount of a direct debit during the billing cycle, it is appropriate to apply prorated billing. This way, the amount charged by SEPA Direct Debit will be adjusted based on the actual use of the service during that period.

Does the SEPA mandate need to be renewed for each direct debit payment?

The SEPA mandate only needs to be signed when the contractual relationship begins. It is not necessary to renew it in each billing cycle. The company must store it electronically for the duration of the contract in case proof of authorization is needed.