Guidance on reason codes for SEPA Credit Transfer R-transactions

In May 2019, the European Payments Council released the second version of the document ‘Guidance on Reason Codes for Single Euro Payments Area Credit Transfer R-transactions’. It applies to the current applicable 2019 rulebook.

To give some background: one of the main benefits of the Credit Transfer ( ) scheme 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 transaction include rejects, returns, recalls and requests for recall by the originator (commonly referenced as ‘R-transactions’ and described in detail in the rulebook). 

The rulebook specifies reasons which trigger an R-transaction or an inquiry, i.e. data elements required to convey information to the payer (originator) regarding the R-transaction or the inquiry. These data elements identify the type of the R-transaction or the inquiry; name the initiator; and detail the reason for the R-transaction or the inquiry.

The correct application of these reason codes by a beneficiary bank (the bank of the payee), informing an originator bank (the bank of the payer), about a failed transaction or an inquiry is crucial to allow the originator to determine its reaction. Therefore, scheme participants must apply the specific R-transaction or inquiry reason codes described in the rulebook when reporting a failed transaction or an inquiry.

Section 3 of the document provides guidance to scheme participants about the reason codes to report specific transaction issues.

The version 2.0 contains the specific reason codes that the originator bank and the beneficiary bank must use when respectively issuing and responding to an inquiry. It also includes the reason codes that can be used in the Customer-to-Bank space, the reason codes with respect to the Extended Remittance Information ( ) option, and the new reason code ED05 used for clearing and settlement-specific issues.

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