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New SEPA Direct Debit guidance on R-transactions

Ravin Thambapillai
Written by

Last editedJun 20241 min read

Today, the EPC published new guidance on reason codes for SEPA Direct Debit R-transactions.

What is an R-transaction reason code?

R-transaction reason codes are SEPA's way of telling us why a payment has failed.

If anything goes wrong during the mandate setup process or following a payment request, you'll be alerted by a message from the bank. These messages are received as ‘R’ codes and cover: Refunds, Refusals, Rejections, Returns, Reversals, Requests for cancellation and Revocations. Each code refers to a specific reason and requires a specific action to resolve it. It's therefore crucial to get these right.

Today's guidance makes it clear that there is still some confusion around which R-transaction codes should be used and when. To help you make sure that you've got your head around this slightly tricky area this post runs you very quickly through the three main points. For further details check out the EPC's guidance or our guide to R-transactions and payment failures.

SEPA Direct Debit R-transactions: three things to watch out for

  1. When an R-transaction is initiated or sent, and by who, affects how it should be handled (as set out in the handy timeline below).

  2. Rejects, returns and refunds of SEPA Direct Debit collections must be sent through the same CSM as the initial collection (unless otherwise agreed).

  3. Specific reason codes should be used unless they are legally forbidden in the customer bank’s country. To help with this the guidance sets out a table of the different codes along with corresponding use cases, causes and suggested actions for each.

SEPA Direct Debit R-transaction timeline

To find out more about SEPA, or more specifically about R-transactions, check out our new SEPA Direct Debit guide.

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