SEPA Migration Checklist
Single Euro Payments Area (SEPA) standards become mandatory across 17 Euro member states on 1 February 2014. If your organization initiates Euro ACH payment or direct debits, action needs to be taken to ensure compliance. This email series is intended to provide you with relevant information and practical guidance.
I pay my vendors by direct debit, what do I need to do for SEPA?
Under SEPA, changes to mandates are driven by the collecting entity - in this case, your vendor - who should initiate any needed changes. You should seek to understand 1) under which SEPA Direct Debit scheme your vendor is planning to collect funds from you, 2) whether you need to lodge a mandate with your bank and 3) if there are changes with the bank where you hold your accounts.
1) Be aware of the direct debit scheme your vendor is collecting under
- There are two SEPA direct debit schemes in SEPA with differing attributes:
- SEPA Direct Debit Core Scheme
- Can be used to collect funds from both consumers and businesses
- Longer refund period for debtors (i.e. your organization, when you are paying by direct debit)
- Creditor mandate responsibilities only
- Existing mandates held by your vendor are valid for SEPA collections. Thus, if you have previously signed a mandate and are currently paying via direct debit, then you will not have to sign a new mandate.
- If your vendor is collecting under the Core scheme, then you should receive a notification from your vendor in advance of their first collection via SEPA.
- Some vendors may ask you to sign a new mandate. For example - if they cannot locate your old mandate or are changing the legal entity they will use to collect funds from you.
- SEPA Direct Debit Business-to-Business (B2B) Scheme
- Can be used to collect funds from businesses only
- Irrevocable collections (your organization will not have a right of refund if your vendor has a valid mandate in place)
- Creditor & Debtor mandate responsibilities
- New mandates required. Thus, if your vendor wishes to collect under the Business-to-Business scheme (B2B), you will need to sign a new mandate
2) You may need to lodge a mandate with your bank
- If your vendor is collecting funds from you under:
- Core Scheme: you do not need to lodge a mandate with your bank.
- B2B Scheme: you will need to lodge a mandate with your bank. If your Citi accounts are being debited, you can lodge your B2B mandates via our CitiDirect Electronic Banking system. Please contact your Citi representative for more details.
3) You may need to check with you bank
- Account Blocking – some banks may place an automatic block on your account to restrict direct debits from your account. You may wish to speak with your bank to confirm whether this is in place and unblock as necessary.
- Statement information – regarding your SEPA Direct Debit payment, additional information may appear on your account statement which can assist reconciliation processes (e.g. Creditor ID).
SEPA has the ability to deliver real value to your organization. Citi is committed to delivering solutions that enable you to capitalise on the benefits that SEPA offers.
To put our expertise to work for you today, please contact your Citi representative or visit our SEPA website at www.transactionservices.citi.com/SEPA
Citi Transaction Services
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