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CJEU: Payment by direct debit may not be made dependent on residence in Germany

In online trading, customers are usually provided with several alternative payment methods (purchase on account, direct debit, credit card, PayPal, etc.). Frequently, however, merchants offer the use of certain payment methods only to selected groups of customers or have special requirements for the use of individual methods. For example, purchase on account is often only available for customers who have previously purchased from the relevant merchant. The European Court of Justice dealt with another case constellation in a recent ruling (CJEU, September 05, 2019, Case C-28/18 - Verein für Konsumenteninformation v. Deutsche Bahn AG):

In the case at issue, the Austrian Consumer Information Association had filed a complaint before the Austrian courts about a clause in Deutsche Bahn’s conditions of carriage according to which bookings made on the Deutsche Bahn website could only be paid by direct debit if the customer was resident in Germany. Since the response to the question as to whether such a clause is admissible depends to a large extent on the interpretation of European statutory provisions, the Austrian Supreme Court, which was hearing the case, referred this question to the Court of Justice of the European for a preliminary ruling.

According to the CJEU, the clause in Deutsche Bahn’s conditions of carriage in fact infringes European law, specifically Regulation (EU) No. 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro: This Regulation is intended to allow consumers to use a single payment account for any transaction made by direct debit within the European Union to avoid costs associated with maintaining several payment accounts. The clause at issue, however, indirectly indicates the EU Member State in which the payment account must be located.

In the opinion of the CJEU, the clause is inadmissible irrespective of whether the trader would offer alternative payment methods. The merchant is free to decide whether to offer the “direct debit” payment method. Once offered however, the merchant may not indirectly indicate to the consumer in which EU Member State the payment account is to be maintained. In addition, the payee could reduce the risk of misuse or of default on payment by, for example, providing that delivery or printing of tickets will only be possible once the payee has received confirmation that the payment has actually been collected.

Tip for the practice:

Merchants offering the “direct debit” payment method should no longer make the selection of this payment method dependent on the customer’s place of residence in the same country, irrespective of whether other payment methods can be chosen. This relates to both technical requirements and restrictions in general terms and conditions.


Jens Borchardt

Jens Borchardt


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