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The introduction of SEPA has a number of implications for businesses and non-profit organisations who currently raise direct debits on their customers. This entity is known as "The Creditor".
In future it will be the responsibility of the creditor to retain and manage the mandate forms signed by their customers (“The Debtor”). If the debtor queries the validity of a direct debit mandate and the creditor cannot produce the mandate then the debtor can request repayment of up to 13 months of direct debit transactions. Under SEPA rules the creditor is required to hold and store the paper mandate for the life of the direct debit and for 13 months after the mandate has expired or cancelled. Our application allows you to link an electronic copy of each paper mandate for easy reference.
While existing direct debit mandates contain the NSC and Account number, these mandates will still be acceptable for SEPA direct debits. Additionally you will require the BIC and IBAN from the customers. You will not need new mandates to be signed for these customers. However all new/future mandates must comply with the new SEPA format mandate. You are legally required to include specific text on the mandate form signed by the customer. Your bank will require you to submit sample SEPA mandate forms for verification prior to going live with SEPA.
The software producing the direct debit file must accurately track payments relating to each mandate, from first payment through to final presentation. Each transaction relating to an individual mandate must contain a unique mandate reference. The debtor's bank must return unpaid items within 5 working days. These returns will be contained in files which will be made available by your bank (usually through the electronic banking system).
The debtor can request refund or amendment of any direct debit transaction for up to 8 weeks following the transaction date. This refund must be made without question. The creditor will no doubt engage with the debtor to identify the reason for the refund and discuss the transaction, but they are obliged to refund the monies.
The creditor is required to pre-notify the debtor of the debit transaction at least 14 calendar days prior to the due date (unless a shorter time has been agreed between the two parties).
In the SEPA environment, the direct debit file must be submitted earlier than previously. The “lead time” to presenting a direct debit transaction varies depending on the type of transactions in the file.
You will need to apply to your bank to become a SEPA creditor, even if you already are a direct debit originator. You will be required to complete a SEPA application form. You will be required to supply a copy of your SEPA Direct Debit Mandate with the correct legal wording. When approved you will be issued with a "Creditor ID" which must be included in all SEPA files.
If there are no transactions on a mandate for 36 months then the mandate will be deemed to have expired. No further transactions should be processed on this mandate.
The debtor is entitled to request a refund of "unauthorised transactions" up to 13 months after the debit date. A transaction is unauthorised if:
Our SEPA Direct Debits system (which is fully compliant with all the SEPA requirements in the previous paragraphs), manages the full lifetime of a direct debit mandate from the first to the final presentation, clearly showing which transactions are First / One-off payments or Last payment. It verifies that when you submit the files you have sufficient time for processing on the appropriate date (including allowing for ECB public holidays). It also allows you maintain an electronic scan of the mandate forms and link them to the customer details.
Our SEPA Direct Debits system allows you collect either variable amounts or regular payment amounts (eg. club subscription). It is designed in conjunction with our customers to be easy to use, robust, efficient and functionally rich. If you would like further information or a demonstration on this application please contact us.
The SEPA initiative by the EU commenced in 2002 with the aim of allowing seamless transaction flow between banks within the Single Euro Payments Area ... More
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