Unlike Korea, where automatic card billing is the standard, recurring spending in Germany defaults to account debits. SEPA Direct Debit is a scheme common across the SEPA region managed by the European Payments Council, where a consumer submits a direct debit mandate and the merchant then pulls the amount from the consumer's account by request.

It is an effective, low-churn payment method for business models built on recurring billing, such as subscription content, SaaS, and recurring deliveries. It suits predictable recurring transactions with a set amount per cycle rather than large one-off sales.

Once the consumer enters their IBAN and submits a direct debit mandate, the amount is subsequently debited from the consumer's account at the merchant's instruction for each billing cycle. Because this is not approved instantly like a card, notification of a failed debit due to insufficient balance or an account error can arrive several days later, which must be factored into operations.

For recurring billing models, the key screening points are the mandate collection method and reversal-rate management. It is recommended to share your subscription product structure early in the consultation, along with whether a contract based on a Korea-based entity is possible.

• Business registration country

  Confirm contract eligibility for Korea-based merchants

• Sales channels

  The integration method and priority differ depending on your online sales channel mix, such as your own storefront, open marketplaces, or mobile apps

• Product categories

  Advance confirmation is needed to check whether your category falls under SEPA Direct Debit's restricted merchant policies

• EU regulatory compliance

  Confirm compliance with EU payment regulations such as PSD2 and SEPA (see official sources below)

The debited euro (EUR) amount is received by Hecto Financial, converted, and settled to the Korea-based merchant in whichever of USD, KRW, or JPY was selected in the contract. The settlement cycle is determined by the contract terms and risk policy.

SEPA Direct Debit consumers can request a refund (reversal) for any reason within 8 weeks of the debit date. If a reversal occurs within this period, amounts already settled can be converted into a receivable, so it is essential to confirm the reserve policy and reversal-rate management approach at the contract stage. On top of this, the EU's 14-day right of withdrawal for distance sales applies separately.

• Deutsche Bundesbank, Federal Financial Supervisory Authority (BaFin)Official information on Germany's payment system operations and financial supervision. Where this page differs from actual regulations, the official source takes precedence.