The European Payments Council released the updated version 4.1 of the document ‘Guidance on Reason Codes for Single Euro Payments Area Direct Debit R-transactions’ in September 2018.
To give some background: one of the main benefits of the Single Euro Payments Area () Direct Debit () schemes 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 direct debit collection include refunds, returns, rejects, refusals and reversals (commonly referenced as ‘R-transactions’ and described in detail in the rulebooks).
The Core and Business-to-Business (B2B) rulebooks specify reasons which trigger an R-transaction, i.e. data elements required to convey information to the payee (biller) regarding the R-transaction. These data elements identify the type of the R-transaction; name the initiator of the R-transaction; and detail the reason for the R-transaction.
The correct application of these reason codes by a debtor bank (the bank of the payer), informing a creditor bank (the bank of the biller), about a failed collection is crucial to allow the biller to determine its reaction.
The version 4.1 of the document ‘Guidance on Reason Codes for Single Euro Payments Area Direct Debit R-transactions’ covers mainly editorial changes to achieve the same wording where relevant with the guidance documents on reason codes for and for Inst R-transactions.
The rulebooks also formally state that this guide prescribes which ISO code should be used for each of the reasons under each R-transaction type.