SEPA collection concepts

This section explains some general SEPA collection concepts.

SEPA

Acronym for Single Euro Payments Area, in Dutch ’Gemeenschappelijk eurobetalingsgebied’

The aim of the Single Euro Payment Area (SEPA) is to create a single European payment market with no distinction between domestic and international payments.

What are SEPA and IBAN?

SEPA refers to an area which includes all the countries of the EU, as well as Norway, Iceland and Liechtenstein (that are a member of the European Economic Area), Switzerland and Monaco. Within these countries, it will later be possible, for example, to perform electronic Euro payments or collections. Up to now, this has not been possible. The transition to IBAN, the new long account number, is a preparation for SEPA.

Why SEPA?

In SEPA, standards have been developed for sending transaction messages and reports back and forth. This has an impact on all the persons and parties involved in a financial transaction. In order to be able to create a SEPA transaction, all persons and parties who form part of the chain need to change their infrastructure so that they conform to the standard.

The creation of SEPA is an important step towards the formation of an integrated European payment market. To ensure that Euro payments in this area later all take place in the same way, there will be new standards for the account number, non-cash payments and the collections.

Changes in Profit for the transition to SEPA

If you want to switch to SEPA, you need to change the configuration for the functionalities involved if you use these functionalities in Profit:

• Configure automatic payments with SEPA
• Configure automatic collection with SEPA

Clieop

Flat text format that can contain payment and collection orders. Used in the Netherlands and Belgium until the transition to SEPA on 01-02-2014.

Transaction delivery code

The collection transaction code is a value that collectors must provide in the XML file for the SEPA collection order. When they offer European collection transactions to their bank for processing, collectors need to classify these transactions into so-called ‘sequence types’. For each issued mandate, they need to specify a specific type for each collection transaction. Profit determines this value and records it as Transaction delivery code in the debit mandate properties. The following codes can be distinguished:

• OOFF (One-Off): a single collection transaction
• FRST (First): a first collection transaction from a series
• RCUR (Recurring): the following recurring collection transactions.
• FNAL ('Final') (last transaction in a series of collection transactions) can be used within SEPA to deliver the last collection transaction in a series. However, the advice of the banks and the DNB is not to use this. Thus, the last collection is therefore a RCUR.

It is important to keep to the correct sequence of these codes. If there is no collection history, the delivery code has the value FRST (first collection from a recurring mandate). The bank of the debtor will refuse a RCUR if a FRST has never been received.

Credit bank

The collector’s bank. This bank receives the collection order from the collector and sends transactions through to the debit banks with the request to perform the collection on the account of the debtor.

Debtor

The one an amount is collected from.

Debit bank

The bank of the debited party i.e. the bank of the debtor.

Collector

The one who collects. In the context of this design, the Profit user is linked to the collector.

Collection order

A group of collection transactions delivered as a whole to the bank.

Debit mandate

An agreement signed by the debtor in which he/she gives the collector permission to debit amount(s) from his/her bank account number, always specifying the mandate feature specified on the agreement.

Collection transaction

A transaction that the bank of the collector uses to request the bank of the debtor to debit an amount from the account of the debtor so that this can then be credited to the account of the collector.

SEPA collection method

This term is used to indicate which collection method is being used. Within SEPA, the ‘Standard’ collection method and the ‘Business’ (B2B) collection method are available.

• The Default collection method offers considerable protection to the one being collected from including a refund period right of eight weeks.
• The B2b collection method has no refund right but it sets more requirements for the debit mandate. These requirements must be registered by those being collected from with their own bank. For business collection transactions, the debit bank (the bank of the one being collected from or the bank of the debtor) can therefore check if the collector is authorised and will not carry out the collection transaction if this is not so. This check provides a guarantee against wrongful use of the business collection method which is not present for the default collection method.

‘PAIN’

The XML format that is the standard within SEPA for the electronic sending of payment and collection orders to the bank.