Like any payment method, SEPA Direct Debit may experience unsuccessful transactions. These are called R-transactions. There are 4 types of R-transactions that can happen at various stage of the SEPA Direct Debit timeline (SDD Flow article here).
- Reject: The debtor bank rejects the SEPA Direct Debit (SDD). This may happen if the bank account is closed, invalid or does not exist.
- Refusal: There can be a refusal for a single transaction (the mandate remains valid for further transactions) or a revocation of the mandate, meaning additional transactions will be systematically refused.
- Return: The debtor bank returns the SDD because there was an issue while processing the SDD. The vast majority of returns are because of insufficient funds on the debtor account.
- Refund: Between D and D+8 weeks, the debtor can ask for a refund without any justification. Between D+8 weeks and D+13 months, the debtor can only initiate a refund in the case where they claims to never have signed a mandate.
The R-transactions can have various root causes. Here is an overview of the most common type of R-transactions:
|AM04; MS03||Reject or Return||Insufficient funds (it is the most common in Europe)|
|AC06; AG01||Reject or Return||Direct Debit not Enabled (ex: SDD impossible on saving accounts)|
|MD01||Reject or Return||Mandate cancelled|
|MD02||Reject||Mandate error (ex: missing information)|
|AC04||Reject or Return||Bank account closed|
|MS02||Reject or Return||Refusal by debtor|
|SL01||Reject or Return||Debtor bank rejection (ex: blacklisted account, account limited,…)|
|MD07||Reject or Return||Debtor deceased|
|AC01; RR01; DNOR; RC01; RR04; BE05; RR03||Reject or Return||Missing information|
If you want to learn more about the subject, read our blogpost here.