SEPA Direct Debit (SDD) provides the basis for a direct debit product which will provide customers (e.g. individuals, small and medium-sized enterprises, corporates and government entities) with a straightforward instrument possessing the necessary reliability, predictable execution time and reach. The SEPA Direct Debit (SDD) Scheme is a set of customer to bank rules, inter-bank rules, practices and standards which will allow the banking industry in SEPA to offer a direct debit product to customers. Direct debits within SEPA will be able to be processed in accordance with the rules and standards of CORE or B2B Scheme. The scope of SDD is limited to payments made in Euros within the 32 SEPA countries.
The SEPA Direct Debit (SDD) is essentially available as two different schemes:
- Core Scheme
- B2B scheme
The European Payments Council (EPC) has published separate guidelines for the SEPA Direct Debit Corporate to Bank (C2B) flows for each of these schemes.
This scheme is consumer orientated and incorporates various features aimed at protecting the consumer e.g. longer refund timelines. Participation by banks operating within the SEPA area is mandatory for the Core Scheme.
This scheme is primarily aimed at supporting business users i.e. where both the debit and credit parties are corporates. Participation by banks in the SEPA area in the B2B scheme is optional.
Differences between the schemes
The other points of distinction between the Core and the B2B schemes are as below:
- Refunds by the debtor are not possible in the B2B scheme, i.e. authorized B2B direct debits will not be refundable
- In the Core scheme the debtor can request refund of a direct debit up to eight weeks after the debit date.
- Mandate Check
- Debtor bank must conduct a mandatory mandate check to verify that each B2B direct debit is indeed valid.
- In the Core scheme, it is not mandatory for the debtor bank to conduct a mandate check.
- Settlement Cycle
- There is a provision for shorter collection cycle of D-1 (D being the due date) for first and subsequent collections in the B2B scheme.
- In the Core scheme, the collection cycle is D-5 for first/one-off collection and D-2 for subsequent collections.
- All returns by banks will be settled on D+2 at the latest under the B2B scheme.
- In the Core scheme returns can be settled on D+5 at the latest.
The EPC Rulebook clearly defines the various SDD processes. PelicanPay complies with each and every Rulebook process: