SEPA Credit Transfer (SCT) and Direct Debit Core (SDD) Schemes


SEPA, Single Euro Payments Area

The Single Euro Payments Area (SEPA) stands for the European Union (EU) payments integration initiative. SEPA is a set of harmonized payment schemes and frameworks for electronic euro zone payments. SEPA currently consists of the 28 EU Member States plus Iceland, Norway, Liechtenstein, Switzerland and Monaco. SEPA established new standards for credit transfers and direct debits based on ISO XML 20022.

The SCT Scheme enables payment service providers (PSPs) to offer a core and basic credit transfer service throughout SEPA for either single or bulk payments. The scheme’s standards facilitate payment initiation, processing and reconciliation, based on straight-through-processing (STP). The scope is limited to payments made in euro, within the 33 SEPA countries. The PSPs executing the credit transfer must formally participate in the SCT Scheme. There is no cap on the amount of funds that can be transferred under the scheme.

The SDD Core Scheme allows a biller to collect funds from a payer’s account, provided that a signed mandate has been granted by the payer to the biller. A mandate is signed by the payer to authorize the biller to collect a payment and to instruct the payer’s bank to pay the agreed collections. Payers are entitled to instruct their banks not to accept any SEPA direct debit collections on their accounts. The mandate expires 36 months after the last initiated collection. The signed mandate must be stored by the biller as long as the mandate is valid and for a minimum of 14 months after the last collection. The mandate can be issued in paper or electronic formats. The SDD Scheme may be used for single (one-off) or recurring direct debit collections, the amounts are not limited.

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