Before considering the differences between SEPA Direct Debit Core and SEPA Direct Debit B2B Schemes, it is worth reminding ourselves what a scheme is. The European Payments Council (EPC) defines a scheme as following: “A payment scheme is a set of rules which Payment Services Providers (PSPs) have agreed upon to execute transactions through a specific payment instrument (such as credit transfer, direct debit, card, etc).” EPC schemes are made up of three major elements:
- A rulebook – This document describes the rules that all parties must comply with to accept, process and exchange the SEPA payments.
- The Implementation Guidelines (IGs) – They provide the definition of the messages used to transport payment information and enable transactions. SEPA IGs are based on ISO 20022 standards.
- The Scheme Management Internal Rules (SMIRs) – This document explains the Scheme management roles and responsibilities and the processes related to the maintenance and evolution of the schemes.
There are two SDD schemes: the Core Scheme and Business-to-Business (B2B) Scheme. The payment system model under which both operate is the well known Four Corner Model.
The table below provides a summary of the main differences between the SEPA Direct Debit Core and SEPA Direct Debit B2B Schemes.
The majority of the rules in two SDD schemes are common as one can expect. Rules that must be observed by scheme participants can be found under the chapter 4 Business and Operational Rules of the rulebooks available on the EPC website. If you find other differences while reading the rulebooks, please let me know. I will update the above table and share it with others. 🙂
So far, we have presented the Four Corner Model for the SDD, analyzed the Credit driven Mandate Flow and Debit driven Mandate Flow for the SDD and presented the two SEPA Direct Debit Core scheme and the SEPA Direct Debit B2B scheme and their main differences. We can now move to the next questions: which messages are exchanged between SDD schemes participants? How do they relate to the ISO 20022 standard? That will be the topic of a next article.