SEPA - A Guide for Business Customers. SEPA Credit Transfer (SCT) SEPA Direct Debit Core Scheme (SDD Core)

SEPA - A Guide for Business Customers SEPA Credit Transfer (SCT) SEPA Direct Debit Core Scheme (SDD Core) Version: 2.1 (effective 20 th November 2016) Published: November 2016

Table of contents 1 PURPOSE OF THE DOCUMENT 3 1.1 DOCUMENT HISTORY 4 2 SEPA EXECUTIVE SUMMARY 5 2.1 ABOUT SEPA 5 2.2 SEPA CREDIT TRANSFER SCHEME 6 2.3 SEPA DIRECT DEBIT CORE SCHEME (SDD) 7 2.4 BIC & IBAN 9 2.4.1 BIC 9 2.4.2 IBAN 9 3 PARTICIPATING IN THE SEPA DIRECT DEBIT SCHEME 10 3.1 SEPA CREDITOR IDENTIFIER NUMBER (CI) 10 3.2 CREDITOR IDENTIFIER INFORMATION 10 3.3 CREDITOR S OBLIGATIONS UNDER THE SCHEME 10 4 ABOUT MANDATES 12 4.1 THE SEPA MANDATE 13 4.1.1 Sample SEPA Mandate 15 4.2 PAPERLESS MANDATES - PHONE & INTERNET SIGN UP 16 4.2.1 Guide to SEPA Direct Debit Phone Sign-Up 17 4.2.2 Guide to SEPA Direct Debit Internet Sign-Up 18 4.2.3 Confirmation letter 19 4.3 CANCELLATION OF A MANDATE 20 4.4 REQUESTS FOR COPY OF THE MANDATE 20 5 MANDATE AMENDMENTS 21 5.1 AMENDMENTS TO SEPA MANDATES CAN BE MADE FOR THE FOLLOWING REASONS: 21 6 SEPA TRANSACTION/SEQUENCE TYPES 23 7 SEPA FILE FORMATS 25 8 PRE NOTIFICATION/ADVANCE NOTICE 26 9 TIMELINE FOR COLLECTION OF DIRECT DEBITS 27 10 R TRANSACTIONS 28 11 CONSUMER RIGHTS & SEPA REGULATION 30 12 APPENDICES 31 12.1 THE UNIQUE MANDATE REFERENCE UMR 31 12.2 AT-10 - THE CREDITOR S REFERENCE OF THE DIRECT DEBIT TRANSACTION 31 12.3 PROCESS STEPS IN THE COLLECTION OF DIRECT DEBITS 32 12.4 GLOSSARY OF TERMS 33 SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 2

1 Purpose of the Document The purpose of this document is to provide information to business customers on the following SEPA payment schemes: SEPA Direct Debit Core (SDD) SEPA Credit Transfer (SCT) The information is provided as a guide only and should be used in conjunction with the SEPA Scheme Rulebooks and associated Implementation Guidelines published by EPC. The complete SEPA Scheme Rulebooks and associated Implementation Guidelines for SCT s and SDD s are available from the EPC Website, (www.epc-cep.eu) The Scheme Rulebooks are published in November each year, and any amendments may require this guide to be updated year on year. This document does not address each Bank s process for SCT s and SDD s. Customers must engage with their own bank for information on SCT and SDD set up and processing. Creditors must also contact their own bank in relation to Rulebook Version 9.2 changes, effective November 2016, and particularly for details of the new submission times for SDD files. This document does not cover the optional SEPA B2B scheme (Business to Business scheme). Customer must contact their own bank for further information on the scheme. This document will be updated by Banking & Payments Federation Ireland (BPFI), as required and the most recent version will be published on BPFI website www.bpfi.ie. It is the user s responsibility to ensure they are referring to the most up to date version of the guide. The document replaces the previous published SEPA Creditors Guide. Disclaimer While every effort has been made to ensure the accuracy of information included in this document, BPFI can accept no responsibility for errors contained herein. The information in this publication may change from time to time users are advised to refer to the latest available version. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 3

1.1 Document History Version Number Brief Description Date Published V1.0 SEPA A guide for Business Customers replaces the previous published SEPA Creditors Guide December 2015 V2 V 2.1 Updated based on SDD Core Rule Book V9.2 effective date Nov 2016 All Collections presented for the first time, on a recurrent basis or as a one-off Collection can be presented up to D-1 Inter-Bank Business Day (D-1) The use of the sequence type First (FRST) in a first of a recurrent series of Collections is no longer mandatory (i.e. a first Collection can be identified in the same way as a subsequent Collection with the sequence type RCUR ) SMNDA The acronym SMNDA was used to indicate Same Mandate with a New Debtor Agent - the definition of the acronym SMNDA has been updated to indicate Same Mandate with a New Debtor Account. Updated to note Creditors offering Phone & Internet sign up must provide a paper mandate for non irish iban. May 2016 Nov 2016 SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 4

2 SEPA Executive Summary 2.1 About SEPA The Single Euro Payments Area (SEPA) is a European-wide initiative to standardise the way retail electronic payments are made and processed in euro. Using SEPA, payments throughout Europe can be as fast, safe and efficient as when using national payment systems. SEPA enables customers to make payments (Direct Debits, Credit Transfers) to anyone located within the SEPA zone. The jurisdictional scope of the SEPA Schemes currently consists of the 28 EU Member States plus Iceland, Norway, Liechtenstein, Switzerland, Monaco and San Marino. SEPA live date was 1st February 2014, an extra transition period of six months was allowed and the final migration date to SEPA was 1st August 2014 The EPC developed the SEPA payment schemes as defined in the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) Rulebooks. The rulebooks contain sets of rules and standards for the execution of SEPA payment transactions that have to be followed by adhering payment service providers (PSPs). The SEPA mandatory payment schemes are as follows all Banks/PSP s must participate in these payment schemes: SEPA Direct Debit Core (SDD) the scheme replaced the existing domestic legacy Direct Debit schemes throughout Europe SEPA Creditor Transfer (SCT) the scheme replaced the existing domestic retail Credit Transfer schemes throughout Europe Overview of SEPA payments: SEPA covers transactions in euro only IBAN & BIC s are the account identifiers for all SEPA transactions cross border and domestic XML formats is used for SEPA file formats Returns/Rejects processing is an automated process Overview of SEPA processing: SEPA payments (one-off or bulk payment files) are submitted by customers to their bank Banks submits the files to Clearing & Settlement Mechanism (CSM) at various times during the day CSM processes the files and manages the settlement process. CSM issues output files to the banks for processing to customer accounts Banks process the output files and update their customer accounts Further information on SEPA is available on the European Payments Council website: http://www.europeanpaymentscouncil.eu/ SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 5

2.2 SEPA Credit Transfer Scheme The SEPA Credit Transfer Scheme facilitates the execution of Credit Transfers in euro between customer accounts located in SEPA. Credit Transfers can be single payments (one-off payments) or bulk payments e.g. payroll, supplier payments. The PSPs executing the credit transfer must formally adhere to the SCT Scheme. BPFI is the EPC appointed NASO (National Adherence Support Organisation) for Ireland. Glossary of terms The Originator: Customer who initiates the Credit Transfer instruction The Originator Bank: The Bank that receives the Credit Transfer instruction from the Originator and processes the payment instruction The Beneficiary Bank: The Bank that receives the Credit Transfer instruction from the Originator Bank and credits the account of the Beneficiary The Beneficiary: The customer identified in the Credit Transfer instruction who receives the funds by means of a credit to its account Provisions of the SCT scheme The following provisions are available through the SCT scheme: One-off payments or bulk payments e.g. payroll files are all processed via SEPA - payments can be made to any SEPA country Originator (payer), Beneficiary (payee) and their banks are identified using BIC and IBAN Beneficiary will receive funds within one business day of the payment being executed The full amount of a payment will always be received by the Beneficiary Transaction costs for cross border SEPA payments will be equal to the transaction costs for corresponding national payments Originator and Beneficiary can each only be charged by their own payment service provider More detailed remittance information can be included with a payment as up to 140 characters are permitted Rejects and Returns are automatically returned to the Originator Overview of the SCT process Originator creates a payment file and submits it to its Bank within the agreed cut off time usually via their Online Banking channel The payment file can be submitted up to 14 days before the payment date but at the latest one business day before the payment date Originator s Bank checks/validates the SCT file & debits the Originator s account Payment file is sent by Originator Bank for processing & settlement via the SEPA clearing mechanism CSM, known as STEP2 STEP2 issues output payment files to the Beneficiary Banks for processing Beneficiary Banks credit the Beneficiary account during the business day For more information: Business customers must contact their own Bank on how to become an Originator and how to submit SCT payment files for processing. For a definitive source of information regarding the rules and obligations of the scheme, refer to the SCT Rulebook and the accompanying Implementation Guidelines approved by the EPC. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 6

2.3 SEPA Direct Debit Core Scheme (SDD) The SEPA Direct Debit Core Scheme is a standard payment scheme across Europe for the collection of funds between a Debtor (payer) and the Creditor (payee). The SDD Scheme allows for the collection of Direct Debit payments in euro across all SEPA countries. The payment service providers executing the direct debit transaction must formally participate in the SDD Scheme. IPSO is the EPC appointed NASO (National Adherence Support Organisation) for Ireland. Glossary of Terms Creditor: Creditor Bank: Debtor: Debtor Bank: Mandate: The originator of the SEPA Direct Debit on the basis that the Debtor has signed/authorised a Direct Debit Mandate, previously known as the Originator The Bank where the SEPA Direct Debit Creditor holds his/her account and who will process the Direct Debit instruction The person who pays the Direct Debit and has signed/authorised the SEPA Direct Debit Mandate The Bank where the Debtor holds his/her account The authorisation given by the Debtor to the Creditor to allow the Creditor to debit the specified Debtor s account Overview of the SEPA DD processes Creditor applies to their Bank to become a SEPA Creditor and applies for a SEPA Creditor Identifier number (CI) Creditor creates and issues a Mandate to its customer Customer completes the Mandate and returns it to the Creditor Creditor stores the Mandate Creditor creates a SEPA Direct Debit file which includes mandate details (XML file format) Creditor submits the file to its Creditor Bank for processing Creditor Bank validates the file - submits it to STEP2, the SEPA clearing mechanism (CSM) for clearing STEP2 issues output files to the Banks Banks process the output files and update their customers bank accounts Provisions of the SDD scheme SDD provides a standardised direct debit payment service that enables consumers to pay for goods and services in any SEPA reachable country without having to open a bank account in that country. Some key points to note regarding the SDD Scheme: The Creditor and Debtor must each hold an account with a financial institution located in SEPA A BIC 1 (Business Identifier Code) and IBAN (International Bank Account Number) are required to set up a SDD The transfer of funds between Creditor and Debtor always takes place in euro The SDD may be used for single or recurrent direct debit collections The Creditor is responsible for issuing, storing and maintaining the Mandate 1 (Optional for national transactions 2 mandatory for cross border EEA transactions until 31 January 2016 - Mandatory for cross border non-eea transactions) 2 Unless the Member State has opted for the derogation defined in Article 16(6) of the SEPA Regulation SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 7

SDD supports two Mandate types: one-off Mandates, used to collect single payments, and recurrent Mandates, where the Creditor can indefinitely continue to collect payments for the purposes described on the Mandate Advance notice of the date and the amount of each direct debit must be provided by the Creditor to the Debtor. The advance notice period is generally fourteen days, or in some cases seven days or less if agreed by all parties, before the direct debit is collected SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 8

2.4 BIC & IBAN Since 1 st January 2007, BIC (Business Identifier Code) and IBAN (International Bank Account Number), are the only beneficiary customer account identifier and bank routing designation accepted by banks in the EU/EEA area for all intra-eu/eea euro cross-border credit transfers. From 1 st February 2016, an IBAN only rule will come into effect. Creditors/Originators will only be required to provide an IBAN (not the BIC) for the purpose of making a payment (credit transfer/direct debit) and banks will be required to derive the payer/payee s BIC from the IBAN. The Banking & Payments Federation Ireland website www.bpfi.ie provides a BIC & IBAN mobile app conversion service for consumers called Get My IBAN. The service will convert a NSC and account number to BIC & IBAN. The Get my IBAN service is available here. 2.4.1 BIC The BIC or Business Identifier Code is a unique address which in payment messages identifies precisely the Bank/Business (not the Branch) involved in financial transactions. When used in conjunction with the IBAN it identifies the bank at which the account of the beneficiary is held. A valid BIC can be eight or eleven characters, although most banks in Ireland use eight character BICs. The optional three characters can be used by the Bank/Business to identify a branch. In some cases the suffix XXX is displayed at the end of a BIC. 2.4.2 IBAN An IBAN (International Bank Account Number) is an internationally agreed standard created to uniquely identify the account of a customer at a financial institution. The IBAN consists of up to 34 alphanumeric characters; the first two letters denote the country code, then two check digits, and finally a country-specific Basic Bank Account Number (BBAN which includes the domestic bank account number, branch identifier, and potential routing information). There are standard lengths and formats of alphanumeric characters for IBANs in respect of each country e.g. in Ireland, the standard is 22 characters. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 9

3 Participating in the SEPA Direct Debit Scheme Customers need to apply to their Bank to become a Creditor so that they can collect SEPA Direct Debits. Each Bank applies its own prudential criteria for assessing the suitability of a customer as a Creditor for inclusion in the SEPA Direct Debit Scheme. 3.1 SEPA Creditor Identifier Number (CI) Each Creditor is identified with a SEPA Creditor Identifier (CI). This is a unique identification number in the SDD scheme for each Creditor. The CI is used when submitting SEPA Direct Debit files to the Bank for processing A CI can be used by a Creditor for collections in all SEPA countries so if a Creditor moves Bank it can continue to use the same CI The CI will be issued to Creditors by their Bank A central record of CI s is maintained by Banking & Payments Federation Ireland for all Creditors in the Republic of Ireland 3.2 Creditor Identifier Information The Creditor Identifier (CI) is a unique identification of Creditors, meaning that each CI only refers to one Creditor A single Creditor, however, is free to use more than one CI or only to use one CI for the initiation of collections in all SEPA countries Most communities have their own specific procedures for providing a CI to Creditors. In Ireland the CI is issued by the Creditor Bank to the Creditor. The following is a general structure for the CI: Position 1-2 filled with the ISO country code Position 3-4 filled with the check digit according to ISO 7064 Mod 97-10 Position 5-7 filled with the Creditor Business Code, if not used then filled with ZZZ. Position 8 onwards filled with the country specific part of the identifier being a national identifier of the Creditor 3.3 Creditor s obligations under the Scheme Obtain and use a Creditor Identifier when effecting SEPA Direct Debits Use a Mandate which complies with the SEPA standards and has been approved by its Bank if required Comply with the terms of Mandates agreed with its Debtors Collect and process data related to the Mandates in accordance with the rules as outlined in the SEPA DD Scheme Pre-notify Debtors in relation to Collections in advance of any debit on their account (at least 14 calendar days before collecting the payment or as agreed with Debtor) Initiate Collections with the Bank in accordance with the relevant timing requirements set out in the Scheme. Confirm cut-of times for file submission with your bank. Perform all operational tasks allocated to Creditors under the Scheme Effect all Rejects, Returns and Refunds in relation to its Collections presented through the Creditor Bank SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 10

Provide any Creditor Bank with Mandate collection information and/or copy of Mandate, where requested and within the timelines outlined in the Scheme Comply with any guidance for Creditors issued from time to time in relation to risk mitigation Resolve any disputes concerning the underlying contract and the related payments directly with the Debtor SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 11

4 About Mandates. In order to collect funds via a SEPA Direct Debit, the Creditor must have the Debtor s authorisation to debit the account in the form of a Mandate. The Mandate is the authorisation given by the Debtor to the Creditor to allow the Creditor to initiate Collections for debiting the specified Debtor's account A Mandate can be a paper document which is physically signed by the Debtor A Creditor should forward a copy of the Mandate to their Creditor Bank for approval A Mandates can be paperless i.e. sign up is via the phone or internet this is available for Irish Debtors only see Section 4.3 for further information on Paperless Mandates Phone and Internet Sign Up The Creditor dematerialises the Mandate, the process of dematerialisation consists of the conversion of the Mandate information into electronic form. The data elements of the signed Mandate must be dematerialised by the Creditor without altering the content of the Mandate The signed Mandate must be stored by the Creditor for as long as the Mandate exists The paper Mandate can be stored either as the original document or in any digitalised format subject to the national legal requirements The Mandate must not be forwarded to the Debtor s bank All Mandates together with any related amendments / history must be retained by the Creditor for the life of the Mandate and after expiry, for a period of 13 months after the date of the last collection The Creditor must be able to present a copy of the Mandate to the Debtor s bank upon request. If the Creditor is not able to do so, a refund and compensation will be required if the Debtor objects to the debit The Debtor can cancel the Mandate at any time. If the Debtor does not cancel the Mandate, it automatically expires 36 months after the last collected direct debit Once the Mandate has expired/or has been cancelled, it cannot be used again for that Debtor SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 12

4.1 The SEPA Mandate The Mandate is the expression of consent and authorisation given by the Debtor to the Creditor to allow such Creditor to initiate Collections for debiting the specified Debtor's account The design of the Mandate must include: o A clear heading on the Mandate entitled SEPA Direct Debit Mandate o The Mandate must be contained on a single page o The reverse side of a Mandate must not set out any information that might be misunderstood by the Debtor to be part of the Mandate o The Mandate may be an individual document or part of an application form. If it is part of a document, it must be clearly separated from the rest of the content o Additional information e.g. email address, can be included in the application but not on the Mandate The design of the Mandate must comply with the requirements set out within the Scheme. Full details are available in the Rulebook. The following attributes are to be contained within the Mandate in the order shown below: Mandate Attributes - The attributes in the Mandate document must be completed, unless otherwise stated. The Mandate must be headed with SEPA Direct Debit Mandate Legal text is mandatory on the Mandate and it cannot be altered in any way. By signing this Mandate form, you authorise (A) (NAME OF CREDITOR) to send instructions to your bank to debit your account and (B) your bank to debit your account in accordance with the instruction from (NAME OF CREDITOR). As part of your rights, you are entitled to a refund from your bank under the terms and conditions of your agreement with your bank. A refund must be claimed within 8 weeks starting from the date on which your account was debited. Your rights are explained in a statement that you can obtain from your bank. Populated by Unique Mandate Reference (UMR) Name of Debtor Address of the Debtor (optional) Debtor s account number IBAN BIC code of the Debtor Bank (optional for national transactions and cross border EEA transactions, mandatory for cross border non-eea transactions) the Creditor the Debtor the Debtor the Debtor the Debtor Creditor Identifier (CI) Name of the Creditor Address of Creditor **Transaction Type ( one off or recurrent ) Signature(s) - Date of signing the Creditor the Creditor the Creditor the Creditor the Debtor(s) the Debtor SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 13

The following attributes are optional and can be present on the Mandate Debtor identification code Name of the Debtor Reference Party Identification code of the Debtor Reference Party Name of the Creditor Reference Party Identification code of the Creditor Reference Party Underlying contract identifier Contract description the Debtor the Debtor the Debtor the Creditor the Creditor the Creditor the Creditor *Each Mandate must have associated with it a Unique Mandate Reference (UMR). (See Section 12.1 for a description of UMR). This is a reference which will be used by all parties to identify the Mandate and must be quoted on all transactions associated with the Mandate If the UMR be unavailable at the time the Debtor is signing the Mandate, it must be provided as part of the advance notice to the Debtor prior to collection of the Direct Debit funds **One-off is for one-off direct debit transactions after which the Mandate is expired or cancelled and may not be used for any further presentations Recurrent Mandates are used for presenting a series of direct debit transactions Clear instructions to the Debtor for the return of the form must be shown on the face of the Mandate There must be clear instructions for the customer to return the form to the Creditor and this must be present on the face of the Mandate It is possible to have a section for Creditor Use Only on the Mandate see Section 4.2.2 Sample SEPA Mandate with optional elements. This section must only be completed after receiving the signed Mandate from the customer. The data completed in this section must be for internal purposes only and must never be sent on the file to the bank. Any field populated on a Mandate must be stored electronically and all mandatory fields must be sent on the XML file to the bank It is possible to use different naming for these attributes so long as the purpose of the field is clear and relates directly to one of the attributes above SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 14

4.1.1 Sample SEPA Mandate SEPA Direct Debit Mandate Unique Mandate Reference Creditor s name & Logo Creditor Identifier: ** By signing this Mandate form, you authorise (A) {NAME OF CREDITOR} to send instructions to your bank to debit your account and (B) your bank to debit your account in accordance with the instruction from {NAME OF CREDITOR}. As part of your rights, you are entitled to a refund from your bank under the terms and conditions of your agreement with your bank. A refund must be claimed within 8 weeks starting from the date on which your account was debited. Your rights are explained in a statement that you can obtain from your bank. Please complete all the fields marked* Debtor s Name: * Debtors Address IBAN (Account Number) * SWIFT BIC Creditors Name ** Creditors Address ** Country ** Type of Payment Date of Signing Signature(s) Debtor Identification code *Recurrent or One-Off Payment * D D M M Y Y * For Information Purposes only Person on whose behalf Payment is made Identification code of Debtor Reference Party Name of Creditor Reference Party - Creditor must complete this if collecting on behalf of another party Identification code of Creditor Reference Party Identification number of the underlying contract Description of the contract Please return this Mandate to the Creditor and not to your bank **Creditor to complete fields marked ** before supplying form to Debtor SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 15

4.2 Paperless Mandates - Phone & Internet Sign Up Creditors operating the SEPA Direct Debit Scheme can obtain authorisations from debtors to collect SEPA Direct Debits via the Phone or Internet subject to the following: Debtors must have an Irish Bank account Debtors with European Bank accounts must sign a paper Mandate Creditors must contact their Bank to apply to operate paperless Mandates Creditors must provide a paper mandate to debtors with European bank accounts to allow setup of a direct debit Creditors must submit their phone/internet templates including the confirmation letter to their Bank for approval to operate phone & internet sign up Creditors must keep a copy of the phone recording as proof of Mandate together with any related amendments/history/confirmation letter must be retained by the Creditor for the life of the Mandate and after expiry, for a period of 13 months after the date of the last collection Creditors must keep a record of the Internet application as proof of Mandate together with any related amendments /history must be retained by the Creditor for the life of the Mandate and after expiry, for a period of 13 months after the date of the last collection Creditors must issue a confirmation letter to the Debtor within 3 working days of the phone/internet sign up. The confirmation letter/email must include the following: o Debtor s Name, Address & Bank details (BIC if provided by debtor & IBAN) o Creditor ID o Unique Mandate Reference o Type of Payment: One-off or Recurrent o Date of Signing o Standard Legal Text (the authorisation and the Refund right) The confirmation letter or email should be substantially in accordance with the sample in the Guide Creditors must keep a copy of the confirmation letter which was sent to the Debtor. Creditors must keep record of the confirmation letter for the life of the Mandate and after expiry, for a period of 13 months after the date of the last collection The Creditor must be able to present a copy of the Mandate instruction & confirmation letter to the Debtor s bank upon request. Creditors are responsible for ensuring their Phone/Internet sign up process and procedures are complaint with any regulatory/security requirements SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 16

4.2.1 Guide to SEPA Direct Debit Phone Sign-Up Sample Script for SDD Telephone Sign-up Confirm with customer that he/she agrees to pay by SEPA Direct Debit and that the Mandate will be set up via the phone Request the Customer s Name, Bank/Building Society/Credit Union Name, Business Identifier Code (BIC) (optional) and IBAN. Request confirmation that : o customer is authorised to allow direct debits to be collected from this account o the account is suitable for /can accept a Direct Debit o if it s a joint account can it accept a Direct Debit If no - then the Direct Debit cannot be set up Close call o Request confirmation that:account is an Irish bank account If no - a paper Mandate must be sent to the Debtor for completion. Close call. If yes continue Agree the payment schedule i.e. day of the month the money is to come out of account Confirm the pre-notification process as follows: This notification will be provided by notifying you of the amount(s) and date(s) of a series of payments or (b) through a monthly / bi-monthly bill / invoice. You will receive this notification XX days in advance of the collection date (confirm how notification will be made via post, email or text) Advice the customer of the following: o Unique Mandate Reference (UMR) If the UMR is not available at the application stage, it must be advised by the Creditor to the Debtor before the first initiation of a collection o if there is a change to the date, amount or frequency of the Direct Debit, notification in advance of the account being debited will be provided (confirm how notification will be made via post, email or text) o the Direct Debit can be cancelled by writing in good time to (the Company name) and informing their Bank/Building Society/Credit Union (by whatever means is acceptable by their bank) Confirm the Bank/ Building Society/Credit Union account details as follows: o Your account name is ABC, your IBAN is xxxx xxxx xxxx xxxx xx and your Business Identifier Code is yyyyyyyyyyy ( if provided by the debtor) Confirm the SEPA Direct Debit Mandate has been completed and advise the customer that he/she will be sent confirmation of this agreement in the post within 3 working days of the phone call see section 4.3.3 for sample confirmation letter SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 17

4.2.2 Guide to SEPA Direct Debit Internet Sign-Up The following are mandatory fields which must be presented online and must be completed: Creditor details should be pre-filled Creditor Name and Company Logo Creditor Identifier Number (CI) Unique Mandate Reference (UMR) If the UMR is not available at the application stage, it must be advised by the Creditor to the Debtor before the first initiation of a collection Creditor Postal Address Debtor Details to be inputted by Debtor Debtor(s) Name BIC (optional) IBAN Is Bank account a ROI bank account? Yes or No* Is more than one signatory required to sign on your account? Yes**or No Can bank account accept Direct Debit? Yes or No* Is Direct Debit Recurrent or One-Off? The following optional fields can be used by the Creditor: Originator Contact phone number / email address Debtor contact number / email address Debtor completes and submits the form to the Creditor. The Creditor must provide confirmation by letter or email to the Debtor within three working days of sign-up see section 4.3.3 for sample confirmation letter. The confirmation letter/email must include the following: Debtor s Name, Address & Bank details (BIC (if provided by the debtor & IBAN) Creditor Identifier Number Unique Mandate Reference Type of Payment: One-off or Recurrent Date of Signing Standard Legal Text The confirmation letter or email should be substantially in accordance with the sample in the Guide. * if No - the Internet application process should cease and a suitable error message presented to the customer ** if Yes - the Internet application process should cease and a suitable error message presented to the customer SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 18

4.2.3 Confirmation letter Sample Confirmation Letter Creditor Name and Address Debtor Name: Address: City: Country: Dear XXX XXXXXXXXX IMPORTANT: Confirmation of the set-up of your SEPA Direct Debit Mandate Please check that the details (*) below are correct # From Feb 2016 this may or may not be provided by the Debtor (*) Account Holder name (s) (*) Account Number (IBAN) # (*)Business Identifier Code (BIC) if provided by the debtor Unique Mandate Reference (UMR) Creditor Identifier Type of Payment (One-off/Recurrent) Date of sign up If any of the above details are incorrect please call us as soon as possible on (Insert Creditors Contact Number/email address). If your details are correct no action is required and your SEPA Direct Debit will be processed as normal. You have the right to cancel your SEPA Direct Debit at any time by writing to Name of Creditor and informing your bank /Building Society/Credit Union in good time. For information: Please note that as you have signed up online or by telephone and have not signed a paper Mandate, you authorise (A) {Name of Creditor} to send instructions to your bank to debit your account and (B) your bank to debit your account in accordance with the instruction from {Name of Creditor}. As part of your rights, you are entitled to a refund from your bank under the terms and conditions of your agreement with your bank. A refund must be claimed within 8 weeks starting from the date on which your account was debited. Your rights are explained in a statement that you can receive from your bank. Please retain this confirmation letter for your records. Yours sincerely, Creditor s Name SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 19

4.3 Cancellation of a Mandate The cancellation of a Direct Debit mandate is the responsibility of the Debtor and the Creditor. A Debtor can instruct its Bank to cancel a Mandate. Under Payment Regulation banks must cancel the Mandate if requested to do so by the Debtor, and the Creditor must not represent on such cancelled Mandates. Notwithstanding the Debtor s obligation to inform the Creditor directly, Irish banks will offer the Debtor the service to cancel a direct debit on their account. The Debtor can cancel a mandate directly with the Creditor - procedures for the cancellation of Mandates is the responsibility of the Creditor e.g. written cancellation request is required. Storing and archiving of cancellation documentation (e.g. letter of cancellation to the Debtor confirming cancellation) is the responsibility of the Creditor. Mandates that have been inactive for 36 months must be automatically cancelled by the Creditor. Once a Mandate is cancelled it cannot be used again. 4.4 Requests for copy of the Mandate A copy of a Mandate (paper/scanned) must be made available when requested by your bank. The copy Mandate or supporting information where the Mandate is paperless must be sent to the Creditor Bank within 3 working days. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 20

5 Mandate Amendments Amendments can be made on an existing SEPA Mandate; SEPA caters for this by using the amendment indicator field within a SEPA Direct Debit XML file. The amendment of the Mandate is handled between the Creditor and the Debtor. The Creditor is responsible for communicating the Creditor-related changes to the Debtor and for retaining a copy of the correspondence with the Mandate. The Debtor is responsible for communicating Debtor-related changes to their Creditor. The Creditor must retain a copy of the amendment notification from the Debtor or the resulting updated Mandate confirmation letter to the Debtor with the original Mandate for the lifetime of the Mandate plus 13 months. Mandate amendment requests cannot be taken by the banks. Mandate Amending transaction types must be received by your Debtor s bank (D-1) at the very latest, prior to the due date of the transaction. 5.1 Amendments to SEPA Mandates can be made for the following reasons: 1. The Creditor defines a new Unique Mandate Reference (UMR) 2. The Creditor changes the Creditor Identifier information (CI) 3. The Name of the Creditor has changed 4. The Debtor changes the account to be debited in the same bank 5. The Debtor changes the account to be debited in another bank The new amendment data must be electronically stored by the Creditor and sent as part of the next collection to the Creditor Bank. The following actions are required in relation to these amendments: 1. New Unique Mandate Reference (UMR) The Creditor must advise the Debtor of the new UMR in advance of the next payment The Creditor must amend the file sent to their bank as follows: amendment indicator is set to true the original UMR is present in AT-19 the new UMR is present at AT-01 2. The Creditor has changed the Creditor Identifier information (CI) The Creditor must notify the Debtor of the change, in advance of the next payment The Creditor must amend the file sent to the bank as follows: amendment indicator is set to true original Creditor Identifier is present at AT-18 the new Creditor Identifier is present at AT-02 3. The Creditor changes its name The Creditor must notify the Debtor of the change, in advance of the next payment The Creditor must amend the file sent to the bank as follows: amendment indicator is set to true SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 21

original Creditor name is populated in the field Original AT-03 Name of the Creditor the new Creditor Name must be present in AT-03 4. The Debtor changes the account to be debited in the same bank The Debtor must advise the Creditor of the change in account details The Creditor must amend the file sent to the bank as follows: amendment indicator is set to true original Debtor Account is present at Original Debtor IBAN Field the Debtor s new Account must be present in AT-07 (Debtor IBAN Field) Mandate Signed Date field does not change 5. The Debtor changes the account to be debited in another bank The Debtor must advise the Creditor of the change in account details The Creditor must amend the file sent to the bank as follows: amendment indicator is set to true the Debtors new IBAN (AT-07) must be present in the file the Original Debtor Agent field to be populated with SMNDA only the original Debtor s IBAN must not be provided Mandate Signed Date field does not change Note: SMNDA In the previous versions of the C2B (Customer to Bank) Implementation Guidelines, the acronym SMNDA was used to indicate Same Mandate with a New Debtor Agent. However, when the Creditor only receives the IBAN it will not always be possible to derive if an account change took place in the same or in another bank. To better accommodate this situation the definition of the acronym SMNDA has been updated to indicate Same Mandate with a New Debtor Account. It is now used by the Creditor to indicate that the Debtor has provided a payment account held at another Debtor Bank. Note: Creditors should refer to their software provider for instructions on how to complete Mandate amendments within software packages. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 22

6 SEPA Transaction/Sequence Types Important change: As of the effective date of November 2016 of the SEPA Core Direct Debit Rulebook version 9.2, all Collections presented for the first time, on a recurrent basis or as a one-off Collection can be presented up to D-1 Inter-Bank Business Day (D-1). Note: Creditors should contact their bank for details of the submission times for SDD files The requirement to use the sequence type FRST in a first of a recurrent series of Collections is no longer mandatory as of the effective date of November 2016 of the SEPA Core Direct Debit Rulebook version 9.2 (i.e. a first Collection can be used in the same way as a subsequent Collection with the sequence type RCUR ). First Collection FRST Optional - can be used for the first collection of recurrent direct debit Mandate. It must be: received at the Debtor bank at the latest D-1. Recurrent Collection RCUR Used for recurrent direct debits. It must be : received by the Debtor bank at the latest, D-1 It will be rejected if details (BIC, IBAN and UMR) have been presented previously using an OOFF, or FNAL transaction type. One off OOFF Used for One-Off Mandate and cannot be reused. It must be: sent only once after which the Mandate has expired and is redundant received by the Debtor bank at the latest, D-1 It constitutes a collection for an amount that can be collected only once. It will be rejected if details (BIC, IBAN and UMR) have been presented previously using an OOFF, FRST, RCUR, or FNAL transaction type. The Final Collection FNAL Used for final direct debit in a series of direct debits. It must be: received by the Debtor bank at the latest, D-1 The following attributes apply in practice: Once processed on the account, it will result in the termination of the Mandate. It will be rejected if details (BIC, IBAN and UMR) have been presented previously using a OOFF, or FNAL transaction type. There is no requirement to use the FNAL transaction type. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 23

A Mandate is deemed to be created when the FRST/RECUR transaction/collection on that Mandate has reached settlement. If the FRST or RECUR collection on the Mandate is rejected by either the Creditor bank, CSM or the Debtor bank then the Creditor must submit a FRST or RECUR transaction again - correcting information if necessary. If the OOFF Mandate is rejected pre-settlement it would be represented as a OOFF transaction again. However, if the OOFF transaction is returned/reversed or refunded post settlement, it would not be valid to submit the OOFF transaction/mandate again. A FNAL transaction type is used to signal the Mandate has completed or is cancelled. It is not possible to submit another RCUR after submitting a FNAL on a Mandate. Once a FNAL has been accepted on a Mandate it is not possible to use the same Mandate ID for another customer. The Mandate ID that was used and is now completed must remain unique for the Creditor. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 24

7 SEPA File formats SEPA payment files must be transmitted in XML format. The legal standard for processing transactions is in XML format (ISO 20022). Customers must contact their Bank for details on submitting SEPA payment files. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 25

8 Pre Notification/Advance Notice The direct debit processes respect the following pre-notification requirements: Pre-notification is the notification provided by the Creditor to the Debtor of: o the amount o Due date of the collection o Creditor Identifier Number o UMR The notice can be provided as a separate piece of information, or via inclusion in a regular statement, bill, or invoice The Pre-notification must be sent by the Creditor at the latest 14 Calendar Days before the Due Date unless another time-line is agreed between the Debtor and the Creditor The pre-notification can take the form of a schedule of payments over an agreed period of time or an individual advice for each collection (i.e. utility bill) In the case of a schedule of payments, a new pre- notification is only necessary if the amount or frequency changes Delivery methods for the advanced notice is not specified, possible delivery methods include letter, text, email SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 26

9 Timeline for collection of Direct Debits The principal stages in the lifecycle of a SEPA debit are outlined in the table below: Description 1 A Direct Debit file can be submitted by the Creditor Bank to the SEPA scheme up to 14 calendar days (unless otherwise agreed between the Creditor and Creditor Bank) prior to the Due Date of the debit. 2 A First/Recurrent/Final/One-Off direct debit must be received by the Debtor Bank one business days before the due date. Creditors should contact their bank for details of new submissions times for SDD files. 3 Due Date (Date on which the Debtor is debited and Creditor is Credited). 4 The latest date on which a Reversal can be exchanged between the Sending & Receiving Bank. 5 The latest date on which a Return can be exchanged between the Sending & Receiving Bank. 6 The latest date on which a Refund (authorised transaction) can be exchanged between the Sending & Receiving Bank. 7 The latest date on which a Refund (unauthorised transaction) can be exchanged between the Sending & Receiving Bank. Timeline 14 Calendar days (D-1) 0 5 Business Days (D+5) 5 Business Days (D+5) 8 weeks 13 Months Important change: As of the effective date of November 2016 of the SEPA Core Direct Debit Rulebook version 9.2, all Collections presented for the first time, on a recurrent basis or as a one-off Collection can be presented up to D-1 Inter-Bank Business Day ( D-1). Note: Creditors should contact their bank for details of new submission times for SDD files. Furthermore, the current requirement to use the sequence type FRST in a first of a recurrent series of Collections is no longer mandatory as of the effective date of November 2016 of the SEPA Core Direct Debit Rulebook version 9.2 (i.e. a first Collection can be used in the same way as a subsequent Collection with the sequence type RCUR ). SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 27

10 R Transactions Under the SEPA Direct Debit scheme transactions that cannot be processed in the normal way or are being returned unpaid are known as R-transactions. There are various types of R-transactions, rejects, refusals and refunds, and they can occur, pre- settlement (prior to or on D) or post settlement (after D). R Transactions Description Timeline Refunds (Authorised transactions within eight weeks) Refunds (Unauthorised Transactions) Refusals Rejects Claims by the Debtor for reimbursement of a direct debit. Debtors are entitled to request a no questions asked refund for any SEPA Direct Debit within eight weeks from the date on which the amount was debited. If the request for a refund concerns an unauthorised transaction a Debtor must make the claim at the latest 13 months after the disputed debit date. A direct debit is deemed to be unauthorised for any of the following: No Mandate exists The Mandate was invalid The Mandate has expired (no transactions for 36 months) or is cancelled There will be an investigation phase before the Debtor can be refunded. Claims initiated by the Debtor, requesting the Debtor Bank not to pay a collection, for any reason. Can be requested, up to the close of business the day before the payment is due. Direct Debits which are rejected, prior to Settlement for the following reasons: Post Settlement Post Settlement Pre Settlement Pre Settlement Technical reasons: invalid format, wrong IBAN check digit, missing mandatory fields. Debtor Bank is unable to process the Collection e.g. account does not accept direct debits, no Mandate, Mandate cancelled. The Debtor Bank is unable to process the Collection where it is bound by legal obligations covered by National or Community legislation. The Debtor Bank is unable to process the Collection for such reasons as are set out in section 4.2 of the Rulebook (e.g. account closed, customer deceased, account does not accept direct debits). The Debtor made a Refusal request to the Debtor Bank. The Debtor Bank will generate a Reject of the Collection being refused. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 28

R Transactions Description Timeline Returns Reversals Returns are initiated by Debtor Bank after Settlement (e.g. insufficient funds). The latest date for Settlement of a Return is up to five working days (D+5) after the Settlement Date of the Collection. Irish Banks will maintain the previous IRECC timeline for returns and will continue to return on D+1. This is a Creditor initiated request, to re-credit the Debtor who has been debited in error. Reversals must be submitted within 5 days of the original debit date. Reversals can only be processed after Settlement and within 5 working days following the Due Date requested in the original Collection. You must confirm with your Creditor bank that they offer this service. Post Settlement Post Settlement See SEPA Direct Debit Reason Codes available on www.bpfi.ie for further information. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 29

11 Consumer Rights & SEPA Regulation The SEPA Direct Debit Core Scheme Rules and the SEPA Regulation 260-2012 make provision for the following consumer rights: Debtors can: Use an account to pay a SEPA Direct Debit in any SEPA country. Instruct their bank to refuse a Direct Debit. Prohibit the application of any Direct Debits to their bank accounts. Specify Creditors who may collect Direct Debits from their bank accounts. Specify Creditors who may not collect Direct Debits from their bank accounts. Limit a Direct Debit collection to a certain amount and/or periodicity. Request a refund for any Direct Debit within eight weeks from the date on which the Direct Debit was debited from their account. Within the eight week period their bank must refund on a no-questions asked basis. Request a refund for any unauthorised Direct Debit after 8 weeks and within 13 months from the date on which the Direct Debit was debited from their account. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 30

12 Appendices 12.1 The Unique Mandate Reference UMR Description: This reference identifies for a given Creditor, each Mandate signed by any Debtor for that Creditor. This number must be unique for each Mandate in combination with the identifier of the Creditor. This UMR must be submitted with the first collection and each subsequent collection. The collection will be rejected if the UMR has been changed and not flagged as an amendment on a recurrent collection. The UMR is a free text field of up to 35 characters in length and is case in-sensitive. Please contact your Sponsoring Bank for the suggested content of the UMR. For a recurrent direct debit, Debtor Banks will validate that the customer IBAN and the Creditor Identifier are valid and will then match the UMR against that held on file. If the UMR does not match the collection will be rejected. Each Creditor will need to decide on how to populate the UMR (attribute 01) in conjunction with the Creditor s Reference of the Direct Debit Transaction (attribute 10 - see details below). If the UMR is not available at the point in time of signing of the Mandate, the UMR must be made available by the Creditor to the Debtor before the first initiation of a Collection. 12.2 AT-10 - The Creditor s Reference of the Direct Debit Transaction Description: This number identifies for a given Creditor, each Collection transaction presented to the Creditor s bank, in a unique way. This number will be transmitted throughout the collection process. It must be returned in any exception handling process-step by any party involved. The Creditor must define the content of this attribute and it need only be expected to be meaningful to the Creditor. The Creditor cannot request for any other referencing information to be returned to him, in order to identify a Collection. SEPA Guide for Business Customers Version 2.1 V2 May 2016 Page 31