Guidance on reason codes for SEPA Credit Transfer R-transactions

The  released the first version of the document ‘Guidance on Reason Codes for Credit Transfer R-transactions’ in September 2018. In May 2019, the second version of this document was published and applies only to the 2019 rulebook effective as of 17 November 2019.

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). 

With respect to the 2019 rulebook, this version also defines inquiry processes for a Claim of Non-Receipt and for a Claim for Value Date Correction in which reason codes are used.

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 both document versions provides guidance to scheme participants about the reason codes to report specific transaction issues.

The version 2.0 now also 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 entering into force as of 17 November 2019, and the other new reason code ED05 used for clearing and settlement-specific issues that was accepted during the 2018 rulebook change management cycle.

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