SEPA Direct Debit (SDD) is a common automatic-withdrawal scheme across the SEPA area operated by the European Payments Council (EPC); it is a pull-based method in which the merchant withdraws payment after obtaining the consumer's withdrawal consent (mandate). Since Malta, a eurozone member state, has bank accounts that fall within this scheme by default, subscription billing is possible without any separate local payment method.

This suits models with recurring monthly charges, such as memberships, SaaS, or regular deliveries, as a way to reduce card-expiration and repeat-payment failure issues. That said, you must also review the unconditional 8-week refund right described in the settlement and refunds section below.

This is a pull-based method: once a consumer submits an IBAN and signs a withdrawal consent (mandate), the merchant subsequently initiates the withdrawal. It is not a real-time payment; there is a processing cycle measured in bank business days, and a withdrawal failure (return) can occur if the balance is insufficient. Successfully withdrawn euro (EUR) proceeds are received by Hecto Financial, converted, and settled to the Korean merchant in the contract currency among USD, KRW, and JPY.

A Korea-registered business can consider accepting SDD through Hecto Financial without having to go through the SEPA scheme enrollment process itself. Operational conditions such as mandate management and return handling require discussion before signing a contract.

• Business registration country

  Confirm contract eligibility as a Korea-registered business

• Sales channels

  Integration method and priority vary depending on your online sales channel mix, such as owned storefronts, open marketplaces, and mobile apps

• Product categories handled

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

• EU regulatory compliance

  Confirmation is needed that you comply with EU payment regulations such as PSD2 and SEPA (see official sources below)

Withdrawn euro (EUR) proceeds are received by Hecto Financial, converted, and settled to the Korean merchant in the contract currency among USD, KRW, and JPY. However, SEPA Direct Debit is a method that retains risk even after settlement. Under the SEPA Core scheme, a consumer can request an unconditional refund from their own bank, with no reason required, for up to 8 weeks from the withdrawal date, meaning proceeds already settled can later be clawed back (as a receivable shortfall). Combined with the EU's 14-day withdrawal right for remote sales, subscription models should always negotiate a refund reserve and risk policy before signing a contract.

• Central Bank of Malta / Malta Financial Services Authority (MFSA)Official information on Malta's payment systems and supervisory regulations. If this page's content differs from actual regulations, the official source takes precedence.