The verdict in three sentences
For a software vendor billing 1,800 SMB customers every month, SEPA Direct Debit beats cards on cost and reliability: fees drop to EUR 0.20 to 0.80 per collection and returns settle at around 1 to 2%, against 4% card failures. The work comes down to an e-mandate flow, automatic retry of returned debits and clean sync with the billing tool. A Kolonell custom build of this scope usually falls in the simple application bracket, 2,500,000 to 4,000,000 FCFA (EUR 3,810 to 6,100), moving to the medium bracket if the customer portal and accounting are integrated.
Why cards cost too much on B2B subscriptions
A Dublin vendor of business management software bills an average of EUR 150 excluding VAT per month to each of its 1,800 customers, so EUR 270,000 in monthly recurring revenue. Everything currently runs on cards. Company cards expire, get reissued after fraud or hit limits, and SMBs forget to update them. The result: 4% of payments fail every month, 72 invoices and EUR 10,800 to chase by hand.
| Criterion | Card | SEPA Core Direct Debit | Manual bank transfer |
|---|---|---|---|
| Fee per transaction, 2026 ballpark | 1.5% + EUR 0.25, about EUR 2.50 on EUR 150 | EUR 0.20 to 0.80 | EUR 0 to 0.50 on sender side |
| Failure or return rate | 3 to 5% | 1 to 2% | 10 to 20% paid late |
| Payment method expiry | Every 3 to 4 years | None while the account exists | Not applicable |
| Customer dispute window | Card chargeback up to 120 days | 8 weeks (authorised), 13 months (no mandate) | Not applicable |
| Admin effort | Card updates | Mandate signed once | Manual reconciliation |
| Fit for large amounts | Moderate, card limits | Yes | Yes |
The SEPA B2B scheme, reserved for businesses, removes the 8-week refund right but requires each customer to register the mandate with their bank. For SMBs, that friction usually tips the choice towards SEPA Core.
Market tools and what they cost
Three families coexist: direct debit specialists, general payment platforms, and debiting directly through your bank with a pain.008 XML file sent over EBICS or the bank's own channel. In every case the vendor needs a SEPA Creditor Identifier (CID), issued in Ireland through your bank, such as AIB or Bank of Ireland.
| Solution | Fee per collection, 2026 ballpark | E-mandate | Retry of returns | Watch point |
|---|---|---|---|---|
| GoCardless | About 1% + EUR 0.20, capped | Yes, native | Yes, automatic re-presentment | Cost scales with amount |
| Stripe SEPA | About EUR 0.35 | Yes | Configurable | Single stack for cards and SEPA |
| Mollie | About EUR 0.30 to 0.40 | Yes | Partial | Simple integration |
| Adyen | Contract-based, often EUR 0.20 to 0.40 plus processing | Yes | Yes | Minimum volumes |
| Direct with your bank | EUR 0.20 to 0.40 depending on contract | Must be built | Must be built | In-house technical resources |
Provider fees are indicative and negotiable above a few thousand collections a month.
The flow to build: mandate, notice, retry
Choosing a provider is only the start. You need a mandate signing flow inside the customer area, a pre-notification before each debit (14 days by default, reducible to 2 days in your terms), handling of return reason codes, and sync with billing and accounting.
| Building block | Role | Typical effort |
|---|---|---|
| Migrating card customers | Email campaign with mandate signing link | 2 to 3 weeks of waves |
| E-mandate | IBAN entry, validation, signature and archiving | Built into the portal |
| Pre-notification | Automatic notice with amount and date | Template per customer |
| Return handling | Reading codes AM04 (insufficient funds), MD01 (no mandate), AC04 (closed account) | Rules per code |
| Automatic retry | Re-presentment at D+5, email, then suspension at D+30 | Configurable scenario |
| Accounting reconciliation | Export to accounting software such as Xero or Sage | Connector |
Mini case study
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Ciarán, CFO of a SaaS vendor in Dublin, bills EUR 270,000 a month to 1,800 customers. On cards, fees reach about EUR 2.50 per transaction, or EUR 4,500 a month. With SEPA at an average of EUR 0.50, they fall to EUR 900: EUR 3,600 saved per month, EUR 43,200 per year.
On unpaid invoices, 72 card failures of which 25% are never recovered represent EUR 2,700 lost every month. With 1.5% SEPA returns, so 27 collections, and 20% unrecovered, the loss falls to EUR 810. Gain: EUR 1,890 a month, EUR 22,680 a year. In total, about EUR 65,880 per year. With a project at the top of the simple bracket, EUR 6,100, and Standard maintenance at EUR 114 per month, year one costs EUR 7,468 and pays back in under six weeks. This is an estimate to refine with real data.
FAQ
Should existing customers be forced onto direct debit?
No, it works better to make SEPA the default and keep cards as an option. A 3-wave campaign commonly converts 60 to 75% of SMB customers within two months.
SEPA Core or SEPA B2B for business customers?
SEPA B2B removes the 8-week refund right but requires the customer to register the mandate with their bank. For 1,800 SMBs, Core is simpler and disputes usually stay below 0.5% of collections.
How long does it take to get a SEPA Creditor Identifier?
Usually 1 to 3 weeks through your bank. Start the request alongside development so it does not delay go-live.
What happens when a debit is returned for insufficient funds?
Code AM04 triggers an automatic re-presentment 5 days later and an email to the customer. In practice, 60 to 80% of these returns are collected on the second attempt.
What maintenance should we plan for?
Kolonell plans cost 35,000, 75,000 or 120,000 FCFA per month (EUR 53, 114 or 183). They cover provider API changes and security updates.
Let's scope your project. Share your invoice volume, billing tool and payment provider, and we will scope the mandate flow, the retries and a customer migration schedule. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
