The lack of consistency in costs incurred for a failed Direct Debit transaction must be addressed to ensure that charities in some nations do not bear the brunt of bank charges, according to Gunther Lutschinger, EFA President.



“There is a need for greater harmony in banking procedures and payment costs,” says Lutschinger. “Currently, organisations that use Direct Debit within the Eurozone face a wide range of costs depending on the country within which they operate. SEPA was designed to harmonise payment systems and these differences must be resolved to ensure that there is a truly level playing field across all member states.”


SEPA payment systems have been adopted in over 40 European nations, standardising financial transactions and better enabling cross-border payments.


And yet, in nations such as the Netherlands, the cost for a failed Direct Debit may be as little as 25 cents, while in Austria and Germany, the banks charge up to 7 euros per failed transaction. 


As charities often process smaller amounts than their commercial counterparts (such as regular monthly donations of 5 euros or less), they face the risk of incurring higher costs for a filed transaction than the potential income from any such donation.


Lutschinger represents the European Fundraising Association on the SEPA Stakeholder End User Forum in Brussels, working to ensure that the needs of European nonprofits are addressed.  He said: “Payment systems evolve rapidly, and it is crucial that we share views and influence future developments to ensure that we can harmonise our approach across Europe and implement cost savings wherever possible,”


This European Payments Council is currently consulting on changes to SEPA Rulebooks. EFA has consulted its own members via EFA’s SEPA Working Group and will submit a consultation response in the coming weeks.


EFA’s working group on SEPA includes representatives from 8 nations who feed in their relevant experiences and any challenges of the recently adopted SEPA payment system.