Understanding the B2B direct debit refund process

B2B direct debit refunds are not available for authorised collections under the scheme, but you can request a refund from your payment service provider if you consider a collection not covered by a mandate (SEPA Direct Debit Business-To-Business Scheme Rulebook). A Return is initiated by the payer’s PSP after inter-PSP settlement, whereas a Reversal may be used after clearing and settlement to reimburse the full amount of a collection that the creditor concludes should not have been processed. The distinction lets you identify whether to approach your payment service provider or seek creditor-initiated reimbursement.

Start with the groundwork in our earlier article: Can a SEPA Direct Debit mandate be signed electronically?

Can I get a refund of a SEPA B2B direct debit, and who do I ask?

You cannot obtain a payer-requested refund of an authorised collection under the SEPA B2B scheme (SEPA Direct Debit Business-To-Business Scheme Rulebook). If you consider a collection unauthorised because it is not covered by a mandate, the refund request belongs with your payment service provider, or PSP.

These rules concern the SDD B2B Scheme, whose refund rights differ from those of the SDD Core Scheme (SEPA Direct Debit Business-To-Business Scheme Rulebook). The eight-week refund entitlement for authorised Core collections, described by the European Payments Council in its SEPA Direct Debit Business-To-Business Scheme Rulebook published on 05 October 2025, does not apply to B2B collections.

Under that EPC rulebook, published on 05 October 2025, the three-Inter-PSP-Business-Day Return period runs from settlement, whereas the thirteen-month unauthorised-collection request period runs from the debit date (SEPA Direct Debit Business-To-Business Scheme Rulebook).

The unauthorised-collection refund right concerns the relationship between you and your PSP (SEPA Direct Debit Business-To-Business Scheme Rulebook). The B2B scheme does not allow your PSP to recover that refund from the creditor’s PSP. The creditor’s PSP recovering the refund from the creditor is outside the B2B scheme, because the payer’s refund right applies only to the relationship between the payer and the payer’s PSP.

A dispute with the creditor about a collection is outside the scope of the scheme (SEPA Direct Debit Business-To-Business Scheme Rulebook). That distinction matters when deciding whether you are challenging mandate coverage or discussing the underlying bill with the creditor.

Is a bank Return the same as a refund, and when can it happen?

No: a Return is initiated by the payer’s PSP after settlement between PSPs (SEPA Direct Debit Business-To-Business Scheme Rulebook). It is distinct from a payer’s claim after settlement for reimbursement of a direct debit.

Before settlement, you can instruct your PSP to refuse a collection without explaining your reasons (SEPA Direct Debit Business-To-Business Scheme Rulebook). When your PSP handles the refusal before settlement, it rejects the associated collection. When it handles the refusal after settlement, the resulting transaction is a Return. The refusal must be handled according to the conditions agreed between you and your PSP, preferably before settlement.

Your PSP may also return a collection for technical reasons or because it cannot accept it (SEPA Direct Debit Business-To-Business Scheme Rulebook). Examples include a closed account, an account that does not accept direct debits, or a payer’s wish to refuse the debit. These are grounds for the bank’s Return process, not an authorised-payment refund entitlement that you can exercise under B2B.

A Return also has its own recovery route: the payer’s PSP has a contractual entitlement under the scheme to recover its amount from the creditor’s PSP (SEPA Direct Debit Business-To-Business Scheme Rulebook). The creditor’s PSP can then recover that amount from the creditor according to its terms and conditions with the creditor.

If you handle collections for the creditor, identify the reported transaction type, initiator and reason before deciding how to respond (Guidance on reason codes for SEPA Direct Debit R-transactions). The EPC’s R-transaction reporting requirements specify those information elements for communicating the exception to the biller.

What happens if the collection is a duplicate or otherwise appears erroneous?

An apparently erroneous collection can be investigated through the scheme’s inquiry procedure, which helps the payer’s PSP and creditor’s PSP establish whether an error occurred (SEPA Direct Debit Business-To-Business Scheme Rulebook). For a duplicate submitted through an error by the creditor or its PSP, you may obtain reimbursement of the duplicate amount from your PSP.

Your PSP is free to initiate the inquiry by requesting information from the creditor’s PSP (SEPA Direct Debit Business-To-Business Scheme Rulebook). Once the creditor’s PSP receives that request, it must reply under the scheme rules. This gives your PSP a route to investigate a suspected error with the other PSP, rather than relying entirely on what it can establish itself.

For duplicates, your PSP may not be able to determine with certainty from its own information whether the transactions repeat the same payment (SEPA Direct Debit Business-To-Business Scheme Rulebook). It can investigate and try to recover the duplicate amount from the creditor’s PSP. Under certain circumstances, the creditor’s PSP may in turn recover that amount from the creditor.

Matching amounts and identical due dates create a strong presumption that collections are duplicates (SEPA Direct Debit Business-To-Business Scheme Rulebook). Matching amounts with due dates close together can also suggest duplication. These indicators guide an investigation; they are not an exhaustive definition of a duplicate collection.

A creditor’s error in the amount or due date does not itself make the transaction incorrectly executed by your PSP, because those details are not part of the mandate (SEPA Direct Debit Business-To-Business Scheme Rulebook). An incorrect collection can still be considered incorrectly executed while the mandate remains applicable. Do not treat every disagreement about an amount or due date as proof that the debit lacked mandate coverage.

Can the creditor send the money back even when there is no authorised-payment refund right?

Yes: if the creditor concludes that a collection should not have been processed, it may use a Reversal after clearing and settlement to reimburse the full erroneous collection (SEPA Direct Debit Business-To-Business Scheme Rulebook). This is creditor-initiated reimbursement, rather than a payer exercising an authorised-payment refund entitlement.

The creditor is not obliged to use the Reversal facility, and its PSP is not obliged to offer that service (SEPA Direct Debit Business-To-Business Scheme Rulebook). If you operate collections for the creditor, ask your PSP whether it offers Reversals before promising reimbursement through that facility. If the service is offered and the creditor initiates a Reversal, both PSPs must handle it.

The creditor’s PSP may also initiate a Reversal for the same reason: the collection should not have been processed (SEPA Direct Debit Business-To-Business Scheme Rulebook). The payer’s PSP must handle incoming Reversals and does not have to perform checks on them.

A creditor’s request to recall a collection instruction before settlement is instead a Revocation, subject to the date agreed with its PSP (SEPA Direct Debit Business-To-Business Scheme Rulebook). That arrangement belongs to the bilateral agreement between creditor and PSP and is outside the B2B scheme.

Which B2B reimbursement route applies?

Sources

• SEPA Direct Debit Business-To-Business Scheme Rulebook, European Payments Council AISBL, 05 October 2025
• Guidance on reason codes for SEPA Direct Debit R-transactions, European Payments Council, 30 Sep 26