In the subscription economy, SEPA Direct Debit is a popular payment method, but not all merchants have digitised the whole process. Digitising the payment process is not only key to addressing your customer needs, but will also provide merchants many other benefits.

Here are four good reasons to go digital for your SEPA mandates:

1. Enhance customer experience 

Today, consumers with high expectations for user experience are looking for streamlined processes to access their services. At the enrollment phase, and especially for a subscription, they are expecting a quick and user-friendly checkout path. If you are able to offer this, without asking them to fill in, sign and send a paper SEPA mandate, then you are well on your way to improving customer satisfaction. Did you know that with an electronic signature, your customers can start using your services immediately after validation? No need to wait until your paper mandate is received, filed and processed. Consequently, as a merchant, you will see benefits from the SEPA mandates digitisation such as increased customer acquisition and customer loyalty.

2. Cut costs 

Handling paper mandates requires several manual steps, which is not only slower than a digital process, but it also multiplies costs. There are considerable savings that can be made from switching your offline mandate procedures to online. When comparing the costs of services associated with processing mandates offline with electronic mandate process, we estimate that up to €4.60 per mandate is saved with a 100% digital process.

3. Improve bill-to-cash cycle with SEPA mandates digitisation

Top of mind for all merchants is maintaining a healthy cash flow. But many companies are suffering from a slow bill-to-cash cycle that hurts their cash collection. With a paper process, collecting money from new customers can be very arduous (see illustration above). There are other variables such as customers/postal service losing the letter, which will eventually trigger a reminder. Thanks to electronic signature of SEPA mandates, merchants can speed up the process and quickly collect their payments.

4. Protect yourself from litigation

The European Payment Council has set some rules to protect European consumers when using direct debit payment. Consumers can revoke a mandate up to 13 months after the last payment by providing a justification that no mandate has been signed. Electronic signature is recognised as a legal proof, and can thus be used in the case of a dispute. When there’s litigation, merchants can easily locate the archived e-mandate to prove that they did receive the customer’s consent to debit their account. This way, merchants ensure their protection against indemnity claims and avoid all a costly litigation process.

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