Requiring a payer using the SEPA direct debit scheme to reside in the same Member State as that in which a payee company has its registered office is contrary to EU law, the Court of Justice of the European Union ruled in a judgment delivered on Thursday 5 September (Case C-28/18).
The Austrian Association for Consumer Information is challenging before the Austrian courts a clause in the general terms and conditions of carriage of the railway undertaking Deutsche Bahn, according to which tickets booked on the company's website can only be paid for by the SEPA direct debit scheme if they have a domicile in Germany.
Taken up by the Austrian Supreme Court, the Court is of the opinion that the disputed contractual clause is contrary to the SEPA Regulation (260/2012) on credit transfers and direct debits in euros.
Requiring a direct debit on the national territory of the beneficiary company indirectly amounts to designating the Member State in which the payment account must be located, the Court notes. However, the SEPA Regulation aims to allow consumers to use a single payment account for any transaction within the Union for the purpose of direct debit payment.
According to the EU judge, the fact that the consumer can use alternative payment methods such as credit cards or PayPal is irrelevant and, while payment recipients may voluntarily choose to offer the possibility of using a SEPA direct debit payment, they cannot introduce conditions that undermine the effectiveness of the prohibition on requiring the payer's account to be located in a given Member State.
Finally, there is nothing to prevent Deutsche Bahn from reducing the risk of non-payment by allowing the delivery or printing of tickets only after it has received confirmation of actual receipt of payment.
See the judgment: https://bit.ly/2lya5ZE (Original version in French by Mathieu Bion)