BNP Paribas' experts answer your SEPA questions


The new SDD Rulebook bring several enhancements that will facilitate the life of creditors:

  • Sequence Type simplification: while initiating recurrent SDDs, there is no more obligation to send the codeword "FRST" for the first SDD that concerns a particular mandate. Creditors may always send the value "RCUR", as of start. Note that the rules for "LAST" and "OOFF" (one-off) do not change: if a debtor bank receives a last or a one-off transaction, the related mandate will be considered as expired and no more debit for the same mandate identifier will be accepted.
  • CORE scheme cycle improvement: While today a SDD Core must be sent up to 5 days before collection date at the latest, the CORE scheme will now adapts his cycle to B2B: transactions will be accepted if sent one day before collection date. The delay of one day concerns the initiation to the clearing by the creditor's bank. In practice and depending on your volumes, banks may add an additional delay, so make sure to know what his your new cut-off time.
  • The amendment SMNDA used to mean "Same mandate new debtor agent". As debtor agent BIC are now optional, the new rulebook replaces this notion with "Same mandate new debtor account". This codeword should be set in the debtor account element, and not in the debtor agent anymore. So make sure to update your amendment management in the pain.008 you generate.




Which European countries are concerned with SEPA?

At present, SEPA encompasses 34 countries: the 28 member states of the European Union (Eurozone and non-Eurozone members), the European Economic Area (EEA) members - Iceland, Liechtenstein and Norway - as well as Monaco, San Marino and Switzerland.

In addition, several territories and dependencies of European Union member states are part of SEPA - the Aland Islands, the Azores, Madeira, the Canary Islands, Ceuta and Melilla, French Guiana, Guadeloupe, Martinique, Mayotte, Reunion, Saint Barthélemy, Saint Martin, Saint-Pierre-et-Miquelon, Gibraltar, Guernsey, Jersey and Isle of Man.

Are all French communities part of SEPA?

On top of the above mentioned territories, France also has three communities located in the Pacific: French Polynésia, New Caledonia and Wallis-and-Futuna.

These French communities are not part of the European Union and currently not part of the SEPA area. However to keep Euro payment services as efficient as in the pre-SEPA era between France and these 3 communities, it has been decided that SEPA payments could be performed between them.

This agreement concerns only France-community and community-community flows. Sending a SEPA payment from another country to the communities is not allowed.

What is the difference between SEPA direct debit Core and SEPA direct debit B2B schemes?

  • The SEPA direct debit Core scheme is used for all types of debtors whereas the B2B scheme is designed for businesses only; the payer must not be a private individual (consumer).
  • The Core scheme grants the payer an unconditional refund right for 8 weeks after the due date; however, such rights are not granted by the B2B scheme.
  • The SDD B2B scheme requires the payer's bank to ensure that the collection is authorised by checking the collection against mandate information. If a payer does not confirm to his bank the first transaction of a B2B mandate, his bank is entitled to reject the transaction.
  • Finally, timeline for presenting collections to a creditor’s bank vary. The SDD Core scheme allows for at least 5 days before the due date for a first/one-off collection and at least 2 days for a recurrent/last type, whereas the SDD B2B requires all collections to be sent at least 1 day before the due date.

In the event of the merger or acquisition of a company, should SEPA Direct Debit mandates be re-signed or do they remain valid?

SEPA rules indicate that a SEPA mandate remains active in cases of: “merge, acquisition, spin-off or organisational changes”.
If such a change leads to a change of the creditor name or creditor identifier, it will have to be notified by the creditor to the debtor, for instance with an invoice or a pre-notification.

The change will also have to be communicated with SDD remittances, by using the “amendment details” elements (see the next question to see how to use “amendment details”).

By following these two requisites, you ensure that the current mandates remain completely valid.

Is it possible to use SEPA services in non-Euro countries?

Yes. Although SEPA will only support transactions denominated in euro, banks in any of the 32 SEPA countries can offer the service to their clients. The non-Euro countries must be a SEPA country.

What actions should be performed by the creditor in the event of mandate amendments?

The SDD scheme allows the following mandate amendments:

  •  The creditor defines a new unique mandate reference
  •  The creditor changes the creditor identifier
  •  The creditor changes name
  • The debtor specifies another account to be debited (in the same bank or in another bank)

In the case of mandate amendments, the related modification should be communicated by the creditor to the debtor, by means of a document (for instance an invoice, pre-notification or dedicated message).
The first SDD initiated with the new information should also be completed with the details of the amendment, by using “amendment details” to indicate the old value. The new value should be set inside the regular elements of the pain.008 files. The amendment elements must be indicated in the pain.008 as follows:

In case of creditor identifier amendment:

          <Id>XX12ZZZ12345(to be replaced by old creditor ID)</Id>

In case of debtor account amendment:


NB: until November 2016, the SMNDA code word has to be entered only when the debtor changes bank. From November 2016, the code word should be entered both in the event of a change of bank, and of a change of account within the same bank. 

Can I use e-mandates across the whole SEPA area already?

The validity of e-mandates, signed electronically, currently depends on local country legislation. For instance, a tick in an “agreement box” on a website may be valid in some countries, while in others only signatures on paper are recognised.

It is hoped that forthcoming legislation on strong authentication will harmonise this. Consequently, in the current context, the use of both paper mandates and e-mandates can be envisaged, depending on three main factors:


  • Country. Some countries already have local solutions to sign mandates electronically. In some, e-mandates are widely used, leading banks to recognise their validity, while for others only paper mandates are considered valid.
  • Level of centralisation of SDD processes. Depending on your internal organisation, processes can be harmonised for a specific area, giving the choice of a regional approach to mandate management.
  • Refund risk policy. Even in countries where mandates signed electronically are not legally binding, it remains possible to use e-mandates for SDD. The main difference will be that refunds occurring eight weeks after settlement could be granted by banks to the debtor, leaving the affected parties to manage any dispute and the collection of funds outside the SDD scheme. It is therefore advisable for the creditor to use a secure, safe and provable electronic mandate solution, based on balancing cost and risk.

Which partners do I need for a SEPA project and what role should they play?

From the start, your software / IT provider and your bank should be fully involved. Each partner brings its own specific expertise. It is important to rely on a software provider, with relevant expertise for  the file formats and exchange channels as well as on the end-to-end testing. In addition, you will also need a banking partner to advise you on the new payment services and options available. If suitably equipped, certain banks can also play a key role during the end-to-end testing.

Be aware that banks and IT providers will not take full responsibility for your project. You will be responsible for integrating SEPA products into your business strategy.

What criteria is relevant when choosing a banking partner?

The right banking partner can boost and streamline your SEPA project. A partner with SEPA experience will be capable of providing expert advice and dedicated support. To reduce project lead-time and manage complexity, choose a banking partner who is ready, has SEPA experience in rolling out SEPA clients and provides innovative solutions and value added services.

If your business spans several European countries, your banking partner must have a deep geographic coverage in these markets to provide you with the knowledge of how local payment systems can be migrated towards SEPA schemes.

In addition to EPC guidelines, are there any local specifications to be considered when using SEPA formats?

If you respect the EPC guidelines, your formats should be accepted by most banks. However some could still include additional requirements in their format guidelines.

BNP Paribas ensures a full compatibility with both EPC and CGI guidelines.

What about waivers, niche and legacy products?

Since February 2016, waivers and niche products that allowed the continuity of legacy products and formats for an additional period have been phased out. Now the Euro-market is entirely based on SCT and SDD. However, some specific local products were not in scope of the SEPA regulation and remain in use today, such as the LCR in France and the RIBA in Italy. As the SEPA based offers of banks evolves, corporates still using local products should assess the possibilities to move to other products, in order to rationalise their payment instruments partfolio.

Can I use XML ISO 20022 for non-SEPA payments?

The new XML format makes it possible to rationalize and use a single format for SEPA and cross-border transactions but also domestic transactions in the non-Euro countries. 

Testing: who should be involved?

Depending on the level and complexity (number of information systems, geographic scope, volumes) you are faced with, you should set up a project team comprised of both  internal IT resources (ERP adaptation) to run the tests and representatives from your Accounts Receivable/Accounts Payable department. 

Your software vendor is also a key player at this stage of your migration project, especially for simple configurations with limited test requirements. 

By choosing BNP Paribas, you will benefit from our proven end-to-end test approach including the testing of payment issuances and the integration of SDD reporting test files.

How can I minimize the number of rejected and unpaid transactions?

BNP Paribas can help you by providing detailed analysis of your R-transactions, together with the right advices in order to optimise your systems and processes. If you are interested, contact your BNP Paribas point of contact.