SEPA Direct Debit (SDD)
Countries across Europe currently use different types of mandates containing different information in different orders and with different rules. Until now, this has made it very difficult for a corporate to do business in different banking areas. The SEPA Direct Debit is a collections instrument based on a mandate signed by the debtor and presented by the creditor. Although in many countries the decision has been made that current mandates will remain valid for the SEPA Direct Debit (SDD), the transition to this new scheme requires changes and extensions to current data. Certain information needs to be added to make the mandate suitable for the SEPA Direct Debit Scheme.
- The mandate is concluded between debtor and creditor, and no longer between debtor and debtor bank. (e.g. DOM80 in Belgium).
- There are a number of different Mandate types possible, for authorising:
- A 'one-off' payment,
- A pre-defined number of recurring payments of fixed or variable amounts,
- An open number of continuing recurring payments of fixed or variable amounts.
- Same day clearing: funds are remitted to the payee on execution day.
- Two different systems:
- B2C (Business to Consumer) scheme, called SEPA CORE, where debtors may be consumers or professionals
- B2B (Business to Business) scheme, called SEPA B2B, intended solely for use where debtors are professionals or companies.
The main differences between Core and B2B:
- Contrary to B2B, the B2C (CORE) system gives the debtor authority to obtain repayment of a transaction, even where it was an authorised transaction.
- In the B2B system, the execution periods are shorter, meaning faster settlement.
- With B2B, debtors must notify the debtor bank of the mandate, unlike the B2C scheme.
- Not all banks are required to adopt the B2B system whereas the B2C (CORE) scheme is mandatory for any financial institution that wishes to process SEPA Direct Debits.
- Reconciliation. Deliver end-to-end account reconciliation to confirm the SEPA Direct Debit Euro payments processed.