The European Payment Council (EPC) was established by the European banking sector in 2002. At the request of the political authorities the EPC developed the SEPA Credit Transfer (SCT) and the SEPA Direct Debit (SDD) payment schemes, launched in 2008 and 2009 respectively. The SEPA payment schemes are defined in the SCT and SDD rulebooks that contain sets of rules and technical standards for the execution of SEPA payment transactions.
The current role of the EPC is to carry out the payment scheme (SEPA Credit Transfer and SEPA Direct Debit) management function, subject to legal and regulatory conditions defined by the EU authorities. The EPC also publishes updated versions of the rulebooks and guidelines. Stakeholders are provided the opportunity to suggest changes for the payment schemes. All suggested changes are evaluated by the EPC and released for a three-month public consultation. By obtaining feedback through the public consultation the EPC usually publish updated versions on an annual basis in November to take effect in November the following year.
The most recent changes are included in the SDD Core Rulebook version 9.0 and the SDD B2B Rulebook version 7.0. The resolving changes relate to the standard time cycle and the use of sequence types:
- The SDD Core Rulebook version 9.0, effective November 2016, states that collections can be presented up to one interbank business day prior to the due date. This is a considerable change from the previous five business days prior to the due date a debtor’s bank must receive the request for a first direct debit collection or for a one-off direct debit collection.
- Both the SDD Core Rulebook version 9.0 and the SDD B2B Rulebook version 7.0 have been amended to simplify the use of sequencing types, meaning whether the transaction is a first, one-off, recurring or last collection. The current requirement of indicating the sequence type “FRST” in the payment message will no longer be mandated.
Both measures are designed to make things easier for the end-user:
- Actual transfers won’t be faster but the notification time decreases giving end-users more time to plan for SDD’s. Also, by no longer mandating the sequence type for first time SDD’s provides a general simplification of the rules taking one of the variables out.
- By decreasing the number of days from five to one when making requests for first direct debit collections and one-off direct debit collections will likely have the biggest impact. SDDs will then be much more available, especially when setting up recurring SDDs and when payment instructions change on a short notice.
- Making SDDs more available and easier to facilitate provides a great opportunity to move more of a corporate's payments over to a recurring direct debit format.
- This will, in turn, make cash forecasting more predictable and accurate.
Given the significance of these changes they have been published already in January 2015, rather than November 2015, to take effect in November 2016. The reason for this is to allow ample time for participants in the SEPA payment schemes to implement the suggested changes. It seems the EPC wants to avoid having to extend a deadline, as was done in 2014 when the deadline for SEPA implementation had to be extended 6 months. As a consequence there will be no further change to the rulebooks in 2015.
The period for submitting suggestions to the published SDD Core Rulebook version 9.0 and the SDD B2B Rulebook version 7.0, published in January 2015 is currently open. The EPC encourages all interested parties and stakeholders to submit suggestions before the 31 December 2015 deadline. These suggestions will be considered for the rulebook version to be published in November 2016, and consequently be effective in November 2017.
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