SEPA Direct Debits Timelines What do you Need to Do

SEPA Direct Debits Timelines
What do you Need to Do
Customer Example
Your company is due to collect monies from customers via the SEPA DD Scheme on
25.04.2013. What dates should you be aware of, both in submitting the file, and
after the file has been submitted to the bank?
Please see the flow charts below:
Submitting your SEPA DD File
6 business
banking days
File Type 1: First Presentation
17 18 19
22 23 24 25
‘The Client’
Allow 6 business
banking days
You collect monies
from your customers
File Type 1: First Presentation
For new DD instructions (i.e. First Presentation) you must submit your file to the bank
six business banking days prior to the due date. In this case, first presentations must
be received by the 17.04.2013 to be processed on the 25.04.2013.
Note: This includes ‘once-off’ presentations.
3 business
banking days
File Type 2: Recurring Item
22 23 24 25
Recurring Item
1. All direct debit customers under SEPA will have to upgrade their payment software to produce
SEPA-compliant XML files. AIB recommends that you contact your payment software provider (if
applicable) for further information on the impacts of SEPA on your payment software and to get a
SEPA software update. If you do not have a software provider, AIB has been working closely with the
majority of payment software providers in Ireland, and has compiled a list of vendors who can help
ease your migration to SEPA. This list is regularly updated and available on
Once your company has upgraded its payments software to produce a SEPA-compliant XML Standard
file, it is important that you engage with AIB to test and ensure your new SEPA DD payment file
meets the correct standards. AIB has two key checks that should be done ahead of the submission of
a live payment file to AIB:
• A sample SEPA DD output file should be sent to [email protected] to confirm that your XML
Standard file format meets SEPA specifications.
• Once confirmation is given, a penny test file (e.g. a sample file) should then be uploaded through
iBB to ensure it processes successfully through the new iBB payments platform.
2. AIB requires that all direct debit originators, in advance of their migration to SEPA DD, download
and complete the “AIB SEPA Direct Debit Creditors Agreement” form (available on
The completed form should be returned to your account holding branch. If you have any questions
in relation to the AIB SEPA Direct Debit Creditors Agreement, please email [email protected] or visit our
3. AIB also requires all direct debit originators send a sample of their new SEPA customer direct debit
mandate form for validation. A sample SEPA mandate form and ‘how to’ guide is available on www.aib.
ie/sepa. Please send your sample SEPA DD mandate to your account holding branch for validation. You
will not be able to start processing live SEPA DD transactions until this task is completed.
Timeline: Six business days.
Key SEPA requirements from AIB
Allow 3 business
banking days
You collect monies
from your customers
File Type 2: Recurring Items
For subsequent recurring items you must submit your file to your bank a minimum
of three business banking days prior to the due date. In this case, recurring items
must be received by the 22.04.2013 to be processed on the 25.04.2013.
Timeline: Three business days.
How to get in touch
This brochure has been prepared by AIB for general guidance to business
customers on SEPA Direct Debits. As ever, we would be very happy to answer
any questions you may have or discuss any aspect in greater detail.
Getting ready for SEPA.
Please email [email protected] or visit our website: for
further information on SEPA.
Direct Debits in Ireland and across Europe.
Please email [email protected] or visit
Important information: If this file contains any First Presentations the entire file
will be rejected.
Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland. Registered Office: Bankcentre,
Ballsbridge, Dublin 4, Ireland. Registered in Ireland, No. 24173.
What is a SEPA Direct Debit?
Key features of SEPA Direct Debits
A SEPA Direct Debit (DD) is the new standard across Europe for the collection of funds
between a debtor (payer) and the creditor (payee). The SEPA DD Scheme allows you to
collect direct debit payments across all 32 SEPA countries. With effect from 1st February
2014, the national direct debit scheme will be retired and all Euro currency direct debits
in Ireland and across Europe will be processed via SEPA. This switch will coincide with
the closure of Ireland’s domestic payment system (EMTS) and the replacement of
National Sort Code (NSC) and Account Number with the Bank Identifier Code (BIC) and
International Bank Account Number (IBAN).
Under SEPA, creditors are required to use Bank Identifier Code (BIC) and International Bank
Account Number (IBAN) as the primary identifier of a debtor’s account. Creditors can collect
their debtors’ BIC and IBAN in two ways:
1. Creditors can go directly to their debtors
2. There is a free BIC and IBAN conversion service provided by the Irish Payment Services
Organisation (IPSO) for use by both individual consumers and businesses. It enables the
conversion of existing NSC (National Sort Code) and Account Number information to the
BIC and IBAN standard required for SEPA. For further information on the BIC and IBAN
conversion service, please visit the IPSO website
Mandate Management
Differences between the Direct Debit Schemes
for Businesses
Current Scheme
New SEPA DD Scheme
• Creditors must have an account in the Republic of Ireland (RoI) and can only
debit accounts held in the RoI.
reditors may have an account anywhere in the SEPA zone and can debit bank
accounts across the SEPA zone.
• Debtor account details are in National Sort Code (NSC) and Account Number
format with the debtor account held in the RoI.
ebtor account details are in BIC and IBAN format. The debtor account can be held
anywhere in the SEPA zone.
• Submission of a DD payment file to AIB can be made up to one business
banking day before the collection of funds on both a first and recurring
SEPA DD payment file must be submitted to AIB a minimum of six business
banking days before the collection of funds, for a first presentation, and three
business banking days for the collection of funds on a recurring transaction.
• Indemnity claim/counter claim process - limited to 13 months for unauthorised
debits since November 2009.
• ‘ No Questions Asked’ refund applies to authorised debits for eight weeks after the
debit date and up to 13 months for unauthorised debits. Claims for ‘No Questions
Asked’ refunds must be honoured by the creditor.
• Creditor must hold a copy of the mandate for up to seven years from date of
final debit under the agreement.
reditor must hold the original mandate for the entire lifetime of the agreement
and a minimum of 13 months after the last debit is presented. Retention of paper is
subject to national legal requirements (seven years in the RoI).
Under the SEPA DD scheme, creditors will be required to manage their own direct debit
mandates. This means the creditor must physically store the mandate in paper and/or electronic
format. All direct debit originators in the RoI must design internal processes to cope with these
mandates. Certain mandate related information will have to be collected and submitted with
each SEPA DD collection (i.e. Debtor Name, debtor IBAN, debtor BIC, UMR, type of payment,
date of signing, SEPA Originator Identification Number and Creditor Name). Creditors will not
be required to obtain a new signed mandate for existing customers held under the current
national direct debit scheme.
Unique Mandate Reference
Creditors will be required to give every mandate they hold a unique mandate reference.
Creditors can generate this mandate number, with a maximum of 35 alphanumeric characters, in
a free format. It could be a contract number, a client number or just an ascending or descending
number. AIB recommends using something similar to a client number, so that it is easy to
recognise individual client mandates. It is important to note that this unique mandate reference
number must remain the same for each transaction submitted under the customer mandate.
Creditors will also be required to make this available to their customers.
SEPA Originator Identification Number / Creditor Identifier
• Depending on the scheme a creditor uses, the original mandate is either
physically held and managed by the debtor bank or managed by the creditor.
• Mandate may be on paper, captured online or by telephone voice recording.
• AIB offers a debtor the facility to cancel a direct debit mandate. AIB
communicates mandate cancellations to creditors in writing.
• First six characters of the Mandate Reference must remain unchanged, the
remaining 12 characters can be variable.
he original mandate is physically held and managed by the creditor.
andate default is in paper format. There is a service available for the RoI only,
whereby mandates can also be given online or by telephone. Cross border mandates
must be in paper format.
IB will offer a mandate cancellation service to customers, however, AIB does
not advise the creditor directly of mandate cancellations. The debtor is ultimately
responsible for cancelling the mandate and informing the creditor.
he Unique Mandate Reference (UMR) must be unique for each mandate and must
be submitted unchanged for each collection.
Creditors will need to obtain their new SEPA Originator Identification Number (OIN), also
known as the SEPA Creditor Identifier, which will uniquely identify each creditor through an
alphanumeric code. AIB will provide all originators with their new SEPA OIN / Creditor Identifier
in advance of their migration to SEPA.
Return Transactions
For return transactions (R-transactions), SEPA DDs have different reason codes on the account
returns file. Based on the reason code for a return transaction a creditor can decide whether
to generate a new direct debit, call the client or choose from a number of other actions. If an
automated process is in place, you may have to re-programme your system based on these new
return reason codes.
Unauthorised Debits
A direct debit is deemed to be unauthorised in the following situations; 1) no mandate exists;
2) the mandate was invalid; or 3) the mandate has expired (no transactions for 36 months).