As the government's cashless policy drives greater use of bank accounts and digital channels among Italian households, account-based automatic withdrawals have become a standard collection method for services with recurring billing, such as telecom, insurance, and content subscriptions. SEPA Direct Debit is a pan-European scheme run by the European Payments Council (EPC), under which a consumer submits a mandate (withdrawal authorization) and the merchant then pulls funds from the consumer's account at each billing cycle.

For merchants in Korea running SaaS, membership, or subscription-box services for customers in Italy, SDD helps reduce involuntary subscription churn caused by expired or reissued cards. However, the scheme allows consumers to request a no-questions-asked refund within 8 weeks of a withdrawal, so it is safest to apply SDD first to low-engagement subscription models with limited dispute exposure.

Once a consumer enters their IBAN and signs the mandate (withdrawal authorization), the merchant requests a withdrawal of euro (EUR) funds from the consumer's account at each subsequent billing cycle. Hecto Financial collects the withdrawn funds, converts the currency, and settles to the Korean merchant in USD, KRW, or JPY as chosen under the contract. Unlike card payments, the basis for the transaction is not SCA authentication at the moment of payment but the validity of the mandate, so it is important to obtain and retain mandates in line with scheme rules.

Integrating through Hecto Financial lets a Korean corporate merchant explore SDD collection from customers in Italy without contracting individually with SEPA member banks. Because recurring-billing models vary by industry in how mandates are managed and refunds are held, prior discussion with the sales team is required before contracting.

• Business registration country

  Confirm contract eligibility as a merchant registered in Korea

• Sales channels

  The integration approach and priority differ depending on your online sales channel mix, such as owned storefronts, marketplaces, or mobile apps

• Product categories

  Confirm in advance whether your products fall under categories restricted by the SEPA Direct Debit operator's merchant policy

• EU regulatory compliance

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

Settlement should be designed around the premise that a successful withdrawal is not the same as confirmed revenue. Under SDD scheme rules, a consumer can request an unconditional refund of an otherwise legitimate withdrawal within 8 weeks of the withdrawal date, and can dispute a withdrawal made without a valid mandate for up to 13 months. Hecto Financial collects and converts euro (EUR) funds and settles in the contracted currency (USD, KRW, or JPY), but the settlement cycle and any holdback terms may reflect this post-withdrawal refund exposure, so please confirm these in advance. Separately, a standard refund deadline should also be set for the ordinary 14-day withdrawal right that applies to EU distance sales.

• Bank of Italy (Banca d'Italia)Official information on Italy's payment systems and related regulations. If this page's content differs from actual regulations, the official source takes precedence.