SEPA Direct Debit (SDD)
The SDD Mandate
The SEPA Direct Debit (SDD) Schemes allow a creditor (biller) to collect funds from a debtor's (payer's) account, provided that a signed mandate has been granted by the payer to the biller. A mandate is signed by the debtor to authorise the creditor to collect a payment and to instruct the debtor's bank to pay those collections. Mandate forms to be completed by debtors (customers purchasing goods or services) are usually provided by creditors (retailers or service providers) themselves.
The European Payments Council (EPC) offers guidance to creditors on the creation of streamlined, easy-to-use Single Euro Payments Area (SEPA) mandates. In addition, the EPC provides translations of the mandate text, as specified in the SDD Core Rulebook and the SDD Business to Business (B2B) Rulebook, into the SEPA languages. As a result, an estimated 16 to 18 million businesses in the euro area alone and all public administrations collecting payments in SEPA are in a position to create user-friendly SEPA mandate forms, which best meet their needs.
Streamlining the SEPA mandate
The SDD Rulebooks define the rules for the content of SEPA mandates. The illustration of the mandate as it appears in the rulebook features the most comprehensive layout possible. In actual usage however, the SEPA mandate form may be streamlined in a number of ways without losing any essential content whilst still remaining compliant with the rulebook. In many cases, the mandate form itself does not have to include all the information required for the authorisation of a SDD, provided that this information can be obtained from other sources. It also needs to be kept in mind that most of the information included in a SEPA mandate can actually be supplemented by the creditor himself and as such, may already be part of the mandate form he creates. Customers who complete and sign such forms will eventually provide virtually the same information on a SEPA mandate as in any other mandate issued under legacy direct debit schemes today. The SEPA mandate is in fact an easy-to-use tool for debtors and creditors alike.
To bring greater clarity on this point and to illustrate how a SEPA mandate form provided by creditors to their customers might actually look like, the EPC has issued a guidance document containing practical information on how selected mandate information may be used in various situations (see the document Guidelines for the Appearance of Mandates below). Also below, you can actually visualise a user-friendly SEPA mandate form.
Translating the SEPA mandate
Translations of the SEPA mandate texts (see below), as specified in the SDD Rulebooks into the SEPA languages are available.
SEPA Regulation: Using existing mandates under the SDD Schemes
In February 2012, the European Union (EU) co-legislators, i.e. the European Parliament and the Council of the EU representing EU governments, adopted the 'Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009' (see below) (the SEPA Regulation). Article 7 (1) of the SEPA Regulation states: "A valid payee authorisation to collect recurring direct debits in a legacy scheme prior to 1 February 2014 shall continue to remain valid after that date and shall be considered as representing the consent to the payer's PSP to execute the recurring direct debits collected by that payee in compliance with this Regulation in the absence of national law or customer agreements continuing the validity of direct debit mandates." For more information on the SEPA Regulation, visit this dedicated page on the EPC Website: SEPA Legal and Regulatory Framework.
The EPC has addressed potential difficulties faced by creditors who wish to transfer to the SDD Schemes using existing direct debit mandates, which may not be fully compliant with the schemes' requirements regarding form and content of SDD mandates. Section 5.17 of the SDD Core Rulebook and section 5.17 of the SDD B2B Rulebook provide significant practical assistance to creditors by waiving certain requirements for these legacy mandates if used under one of the SDD Schemes.
Secure and convenient - the e-mandate option
The SDD Rulebooks provide the possibility to issue mandates created through the use of electronic channels - often referred to as e-mandates. The e-mandate solution is based on secure, widely used online banking services currently offered by debtor banks. The debtor can re-use his online banking credentials. No additional means of identification are necessary. The e-mandate solution is an optional service offered by banks to their customers.
The inclusion of the e-mandate feature in the SDD Schemes offers a variety of benefits for creditors as well as debtors.
Advantages for creditors include:
- The solution allows fully automated end-to-end processing of e-mandates including issuing, amendment and cancellation of such mandates while eliminating the need to deal with a multitude of local, technical or organisational barriers.
- The e-mandate is agreed on in a secure way.
- The confirmation of the debtor's right to access the account is specified by the debtor bank.
- The e-mandate process allows automatic storage and retrieval of e-mandate data.
Advantages for debtors include:
- The debtor avoids the inconvenience of printing, signing and mailing a paper form to the creditor by using a fully electronic process instead.
- The e-mandate facility is based on secure, widely used online banking services of the debtor bank; the debtor, therefore, can simply rely on the online banking procedures he is already familiar with.
Selection of articles from the EPC Newsletter and other sources
- Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009
- The Creditor-Driven Mandate Flow (CMF)
- SEPA Core Direct Debit Mandate Translations
- SEPA B2B Direct Debit Mandate Translations
- EPC Newsletter: SEPA Direct Debit for Billers: The SDD Mandate. EPC Newsletter series provides support for billers preparing migration
- Sample of a User-Friendly SEPA Direct Debit Mandate
EPC technical documents
- The SEPA Core Direct Debit Rulebook Mandate Illustration (EPC111-11)
- The SEPA Business to Business Direct Debit Rulebook Mandate Illustration (EPC112-11)
- Guidelines for the Appearance of Mandates in the SEPA Core Direct Debit Scheme
- EPC Survey on Electronic Mandate Solutions in SEPA
- Clarification Letter on Electronic Mandates to SEPA Direct Debit Scheme Participants
- EPC e-Mandates e-Operating Model - High Level Definition
- The EPC e-Operating Model for e-mandates: Security Concept
- EPC e-Mandates e-Operating Model - Detailed Specification