05 May 2015

EPC publishes an updated version of the document ‘Guidance on reason codes for SEPA Direct Debit R-transactions’

To give some background: one of the main benefits of the SEPA Direct Debit (SDD) Schemes is that the scheme rules streamline exception handling, at both process and dataset level. This allows straight-through-processing and automated exception handling end-to-end. Possible exceptions to the normal execution of a direct debit collection include refunds, returns, rejects, refusals and reversals (commonly referenced as ‘R-transactions’ and described in detail in the SDD Rulebooks).

The SDD Core and SDD Business to Business (B2B) Rulebooks specify reasons which trigger an R-transaction, i.e. data elements required to convey information to the payee (biller) with regard to the R-transaction. These data elements, which are referred to as ‘reason codes’, identify the type of the R-transaction; name the initiator of the R-transaction; and detail the reason for the R-transaction.

The updated document ‘Guidance on Reason Codes for SEPA Direct Debit R-transactions’ reflects principal changes incorporated into the SDD Core Rulebook version 9.1 and the SDD B2B Rulebook version 7.1 to take effect in November 2016:

SDD Core Rulebook version 9.1 introduces a shorter standard time cycle: as of the effective date of November 2016 of the SDD Core Rulebook version 9.1, all collections presented for the first time, on a recurrent basis or as a one-off collection can be presented up to one interbank business day prior to the due date.

SDD Core Rulebook version 9.1 and SDD B2B Rulebook version 7.1 have been amended to simplify the use of sequence types: the SDD Rulebooks currently require that the payment message sent by the creditor’s bank to request a direct debit collection specifies whether the transaction is a first, one-off, recurrent or last collection. These specifications are also referred to as ‘sequence types’. The SDD Core Rulebook version 9.1 and SDD B2B Rulebook version 7.1 have been amended to simplify the use of sequence types by making the sequence type ‘first’ optional.

Section 4 of the document ‘Guidance on Reason Codes for SEPA Direct Debit R-transactions’ provides guidance to SDD scheme participants on the reason codes to be used to report specific SDD collection issues. This section has been updated with regard to the description of the use-cases for the reason codes AG02 (‘bank operation code specified in the message is not valid for receiver’), FF05 (‘local instrument code is missing or invalid’), MD07 (‘end customer is deceased’) and MS03 (‘reason has not been specified by agent’).

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