This document discusses the chances and risks of using SEPA direct debit for recurring payments. Some key chances include reaching over 500 million potential customers across Europe, lower costs compared to credit cards which have percentage fees, and higher customer lifetime through lower churn rates since bank details do not expire. Risks include potential for fraudulent activity if proper identity verification and risk scoring of bank accounts is not implemented. Case studies are provided showing cost savings and increased retention achieved by companies using SEPA direct debit.

1. 1
SEPA direct debit scheme - chances and
risks for recurring payments

2. 2
Agenda
Chances:
1.Reach
2.Costs
3.Customer Lifetime
4.Merchant managed
Risks:
1. Risk Scoring
2. CRM

3. 3
Chances of SEPA direct debit

4. 4
SEPA is an EU initiative aiming for:
• Harmonization of money transfers in Europe
• Boost money transfers beyond borders
• Advance a secure and cost-efficient payment
system
• Independent of creditk card networks
4000 banks, 300M+ bank accounts available since August
2014
Further improved SEPA scheme COR1 will launch in 11/2016
With SEPA, merchants can reach 500M users
across 34 countries

6. 6
Credit card: 2%-3.5% of transaction, plus
base fee (15-20 cent)
SEPA: 10-30 cent, based on monthly total
volume of transactions. No percentual fees.
SEPA is the more cost-
efficient solution for
merchants

7. Case study- Deezer
Music-Streaming service Deezer
leverages SlimPay for processing their
monthly service fee of EUR 9,99 – Costs
per transaction compared to credit
cards were a main driver for this
decision.
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8. 8
Credit card:
• Expiration date
• Account Updater often not possible to use
in Europe
• High churn rates
SEPA direct debit:
• No expiration of banking details
• Low churn rates, consumers do not
frequently switch bank accounts
Better customer lifetime
with due to low churn
rates

9. 37%
63%
63% of online consumers
discontinue subscription service
hen their credit card expires
source: a new digital future for publisher Nextissuemedia
No expiration model extends customer lifetime of
more than 50% of your customers

10. •This is a titleCase study- SFR
After integrating Slimpay,
mobile service provider SFR
lowers annual churn rates to
3.6% (for direct debit)

11. 11
• Full automation possible
• Consumer shares IBAN once and confirms
electronic mandate (supported
tokenization)
• „oneclick“ payment possible for all
following transactions
• Invoicing, advance payment, PayPal,
SOFORT: requires customer action
• Risk: delay of payment, cancellation
or collections
Merchant stays in control
with automatic
processing in the
background

12. Case study- Nespresso
Coffee re-orders are
processed automatically via
SlimPay Direct Debit
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13. •This is a titleCase study- Greenpeace
1 out of 2 recurring donations in France is
processed via Slimpay direct debit.
3X lower churn rate with direct debit
compared to credit card donations

14. 14 Boost your customer lifetime value!
Case study- BIP &GO Maut and road
tolls
Fully automated booking of
EUR600k per 24h

15. Case study (B2B) - TripAdvisor
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Online sign up for marketing
program – automated
payment process with
company bank account

16. 16
Risks – what to watch out for

17. 17
Consumer identity – verification is key
• Use of public IBANs
• Stolen IBANs
• Generated IBANs
• Account information of
other companies or non-
profits

18. 18
Solution: Scoring when IBAN is entered
• Minimizes fraud
• Filters out publicly
accessible IBANs of
NGOs, etc.
• Comparison of history
and payment
behaviour
• Credit standing and
liquidity
• Effective reduction
of R-transactions and
consequential
charges

19. Keine Deckung? CRM/Retry/Reminder-Funktion
Subscribe Pay Alert Collect
SEPA
mandate
Contract
Transaction
processing
Electronic
signature
Payment
card
Bank
account
Payment pre-
recovery
Payment
card
Client action
E-mailSMS
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20. •This is a titleCase study- Bein Sports
2 out of 3 customers prefer Slimpay
direct debit over credit cards.
Slimpay leverages scoring,
Reminder texts and retry logics for
unsuccessful payments

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Key Takeaways – SEPA direct debit offers unique benefits
• Broad reach across 34 countries and 500M consumers
• Low costs due to competitive pricing model
• Higher customer lifetime with lower churn rates
• Holistic integration with scoring and CRM functionality is key to avoid
fraud and to avoid deficit in payments

22. 030-30807129
(Berlin Office)
Matt@slimpay.com www.slimpay.com
Smart Recurring Payments
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