New SCT Features meet key corporate Requirements

New SCT Features meet key corporate Requirements

Updated SEPA Credit Transfer Scheme Rulebook goes live in February 2009

20 April 12

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"On-behalf-of" payments and "reference parties"

The inclusion of "on behalf of" payments now allows a corporate in-house bank or a payment factory to execute payments on behalf of a subsidiary. (Payment factories deliver payment-related services on an industrialised scale to customers such as corporate businesses, banks and clearing houses, among others.) The further addition of the so-called "reference parties" will enable the two entities making or receiving the payment on behalf of third parties to actually reference these third parties .


For example: a corporate customer has outsourced its payments business to a payment factory. The payment factory is now able to initiate a Credit Transfer on behalf of this corporate customer to pay an outstanding invoice. Vice versa, the "on-behalf-of" element allows the payment factory to receive a payment in lieu of this customer.

Specification of the reason of payment ("purpose codes")

The inclusion of the "category purpose" and "purpose" codes allows originators (payers) to add information to the payment instruction specifying the reason for making the payment. As such, payments can be classified as tax payments or salaries, for example. This same feature also makes it possible - in agreement with the originator bank - to request specific processing for the payment. For example, the originator can instruct salary payments to be credited to the beneficiary on a specific date.

Matching of incoming payments against accounts receivable

In addition to the inclusion of the above described elements now included in the Scheme Rulebook, the ensures compatibility of the scheme with other developments taking place in the area of payment standardisation. As such, the recognises that the so-called structured creditor reference to remittance information offers potential -wide application of automatic reconciliation between invoices and payments. The related ISO (International Standard Organisation) standard will contribute to the improvement of automated reconciliation at the beneficiary's level. This will mean that beneficiaries of high volumes of payments can instruct their customers to add to the credit transfer instruction a structured reference provided to them together with the invoice. This reference is unique for the beneficiary, can be checked for correctness by the originator bank (standard check digits), and allows straight through reconciliation with the outstanding receivables. A guidance document published by the for the use of this ISO standard in the context of the schemes is available on the website.

Remittance information: structure the unstructured

The Credit Transfer Scheme permits the end-to-end carrying of remittance data on a structured or unstructured basis appropriate to the nature of the payment (the remittance information usually contains details of the contract underlying the transaction such as an invoice number, for example). The length of the remittance information in the Scheme is fixed at a standard length of 140 characters and banks are obliged to pass on the full remittance information.

The supports a proposal developed by the European Association of Corporate Treasurers (EACT), which allows companies to agree on a structure for the remittance information. The EACT suggestion on how to structure the "unstructured" remittance fields allows companies exchanging a credit transfer to agree, among other, on information to be transmitted in a specific manner. Banks will carry remittance information structured in such an agreed way unaltered throughout the process chain.

Changes to the Scheme take effect in February 2009

The evolution of the schemes takes place in accordance with a strict change management procedure and is based on a predictable release schedule to ensure sufficient lead-time for banks and customers to implement enhancements to the schemes (see also the article "SEPA Schemes: EPC approves Release Schedule" in this newsletter). The SEPA Credit Transfer Scheme Rulebook version 3.2 takes effect on 2 February 2009

As of February 2009, the Credit Transfer Scheme meets all requirements necessary to allow bank customers in to move their credit transfer payments business to the new instrument.

Christian Westerhaus is the Chair of the Payments Working Group (SPS WG).



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