Similar to the SEPA Credit Transfer post – for direct debits though, there has been a particular emphasis in the last few months on SEPA direct debits (SDD). This wealth of information being released is probably due a combination of the very low take up of SEPA direct debits (total percentage of SEPA direct debits in euro-zone is 2.1% – source: ECB – European Central Bank), and the realisation amongst corporates that time is running out. Another hindering factor for SEPA direct debit implementations is that they are complicated!
SEPA Direct Debit – In a nutshell…
- A SEPA Direct Debit is a payment instrument for collections in euro within the Single European Payments Area (SEPA), from bank accounts that have been designated to accept collections
- Collections are based on an authorisation given to the corporate (creditor) by the customer (debtor) – the autorisation is called the ‘Mandate‘.
- With SEPA Direct Debit, the Mandate has been standardised across the SEPA and must be:
- In the language of the debtor
- Signed by the debtor and presented to the creditor (as a minimum)
- Debtor and creditor must each hold an account with a bank participating within the SEPA Direct Debit scheme
- There are 2 SEPA Direct Debit schemes
- B2B – Business to Business
- BIC / IBAN bank information will replace the legacy bank routing / sort code and customer bank account number
- The file should be delivered to the bank in the SEPA ISO XML direct debit format (PAIN.008)
SEPA Direct Debit Resources:
Besides SEPA for Corporates of course ;-), the European Payments Council (EPC) website is a must, although the amount of information can be overwhelming. Following are the links i found helpful:
- The EPC – Overview of SEPA Direct Debit
- This tells you about the SEPA Direct Debit Core and B2B Schemes, as well as the usual blurb highlighting the benefits of the schemes
- The EPC page about the SEPA Direct Debit Core Scheme
- The EPC page with details of the SEPA Direct Debit B2B Scheme
Both Core and B2B links provide information the Rulebook and Implementation Guidelines.
I think that will do for now, more information about the SEPA Direct Debit schemes soon…!