Differences between SEPA Direct Debit and Credit Card Payments
There are significant differences between SEPA Direct Debit and credit card payments. Instead of opposing them, it is important to understand their differences.
| SEPA Direct Debit | Credit Card Payments | |
|---|---|---|
| Real-Time Payment | No | Yes |
| Availability | Customers from the SEPA zone, which includes 34 countries | VISA, MASTERCARD, and AMEX networks are present in over 200 countries. |
| Preferred Payment Method for Customers | In Germany or Scandinavian countries, SEPA Direct Debit is extremely popular, even more so than credit cards. In France, this payment method is favored by businesses. | In France, it is the number one payment method. |
| Expiration Date | None. The mandate remains valid as long as it is used at least once every 3 years. | Yes. The average validity period of a card is around 2 to 3 years. |
| Payment Limits | No limits. | There are several limitations that can lead to a declined credit card payment, including the maximum payment threshold, which depends on the type of card and its options. On average, the threshold is around €2000. |
- Real-Time Payment: Credit card payments are instant or near-instantaneous (via IPN). The payment gateway can quickly confirm whether the payment has been successful or not. SEPA Direct Debit is not instant. Payment confirmation occurs several days after the initiation of the direct debit.
- Availability: Credit card payments with VISA, MASTERCARD, or AMEX cards are possible in almost every country worldwide (present in over 200 countries). SEPA Direct Debit is available in 34 countries. (Source: Single Euro Payments Area)
- Preferred Payment Method for Customers: Credit cards are not the number one online payment method in all countries. While in France, 80% of online payments are made by credit card, in Germany, the usage of IBAN (SEPA) is significantly higher than credit cards.
- Expiration: While credit cards typically have an expiration date of 2-3 years on average, a SEPA Direct Debit mandate does not have an expiration date. A mandate remains valid for 3 years from the agreement or the last debit. SEPA Direct Debit has a clear advantage over credit card payments for long-term subscriptions (> 6 months).
- Payment Limits: Officially, there are no payment limits or maximum thresholds for SEPA Direct Debit. Consequently, this reduces the likelihood of a direct debit being declined. With a credit card, there is always a payment threshold limit of around €2000.
In certain industries, SEPA Direct Debit may not be suitable, while in others, credit cards are the preferred option. However, in many cases, it is ultimately the customers who make the choice.
Note: With ProAbono, without any technical intervention, you can enable SEPA Direct Debit in addition to credit card payments to increase your customer conversion rate and customer satisfaction. For more details on how to connect a SEPA payment gateway account, please refer to: