Introduction
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).
R-transactions
- 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:
| Code |
Type | Cause |
| 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,…) |
| MD06 | Refund | Refund requested |
| MD07 | Reject or Return | Debtor deceased |
| AC01; RR01; DNOR; RC01; RR04; BE05; RR03 | Reject or Return | Missing information |
Find out more technical details about R-transactions codes here or on the EPC website.
If you want to learn more about the subject, read our blogpost here.