Latvia adopted the euro in 2014 and was fully integrated into the SEPA (Single Euro Payments Area) framework, so any euro account (IBAN) at a Latvian bank can be debited via SEPA Direct Debit. Given that bank accounts are central to everyday payments for Baltic consumers, account-based debiting has an advantage in subscription retention over card-based subscriptions, which can be interrupted when a card expires.

This suits Korean businesses billing the same amount every cycle, such as SaaS/content subscriptions or membership-fee services. Conversely, for one-off sales or product categories with a high risk of disputes, it's safer to prioritize other methods first, given that SDD lets consumers demand a no-questions-asked refund within 8 weeks of a debit.

The consumer enters their IBAN and signs a debit authorization (mandate), after which the merchant pulls funds from the consumer's account at each billing cycle. Unlike card payments, there is no per-transaction authentication step, so keeping mandate records is the key to handling disputes. The debited euros (EUR) are received by Hecto Financial, converted, and settled to the Korean merchant in the contracted currency — USD, KRW, or JPY.

Integrating through Hecto Financial lets a Korean corporation consider adopting SEPA Direct Debit payments without a separate local contract in Latvia. Actual support availability and terms (settlement cycle, fees, currency options) vary by the merchant's industry and transaction volume, so confirmation with the Hecto Financial sales team is required before signing a contract.

• Business registration country

  Confirm whether a contract is possible on a Korea-registered business basis

• Sales channels

  The integration method and priority differ depending on your online sales channel mix — owned store, open marketplace, mobile app, etc.

• Product categories handled

  Advance confirmation is needed on whether your category falls under restricted industries per SEPA Direct Debit's merchant policies

• EU regulatory compliance

  Confirmation is needed on compliance with EU payment regulations such as PSD2 and SEPA (see official sources below)

The settlement structure follows the sequence: euro (EUR) debited from the Latvian consumer's account → received and converted by Hecto Financial → deposited to the Korean merchant in the selected currency among USD, KRW, and JPY, with the cycle following the contract terms. One critical point to keep in mind is that SEPA Direct Debit consumers can demand a refund for any reason within 8 weeks of the debit date. Because this can claw back funds already settled to you, this 8-week refund scenario needs to be built into your cash-flow planning, separately from your response to the EU consumer's 14-day right of withdrawal.

• Bank of Latvia (Latvijas Banka)Official information on Latvia's payment systems and supervision (Latvijas Banka). If actual regulations differ from this page's content, the official source takes precedence.