Guidance on reason codes for SEPA Direct Debit R-transactions

The EPC released version 7.0 of the document ‘Guidance on Reason Codes for SDD R-transactions’ in November 2023. This applies to the two current applicable 2021 Single Euro Payments Area (SEPA) Direct Debit (SDD) rulebooks and the two 2023 SDD rulebooks entering into force on 17 March 2024.

To give some background: one of the main benefits of the SDD 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 SDD rulebooks).

The SDD Core and SDD 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; and detail the reason for the R-transaction.

The correct application of these reason codes by a Debtor Payment Service Provider (PSP) (the PSP of the payer), informing a Creditor PSP (the PSP of the biller), about a failed SDD collection is crucial to allow the biller to determine its reaction. 

The only changes in this version concern editorial changes in section 1. 

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