The CJEU has ruled: direct debit must not be available only to domestic customers. German online shops therefore need to consider carefully whether they will continue to offer direct debit as a payment method. Many merchants make the direct debit payment method dependent on the customer living in Germany. In this way they reduce the risk of payment defaults. The CJEU (judgment of 5 September 2019 – C-28/18) has now ruled that such a clause breaches the SEPA Regulation and declared it inadmissible. An online shop may therefore no longer prohibit customers who live outside Germany from paying by direct debit.
The CJEU has made one thing clear: if direct debit, then for all customers. It also does not matter that consumers can use alternative payment methods, such as credit card, PayPal or Sofort bank transfer. Many therefore believe: the conditions under which a direct debit may still be carried out could become too expensive and too complicated for many online merchants. That could therefore be the end of online direct debit.
