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SEPA DIRECT DEBIT and Single Mandate Register

There are several causes that hinder the development of this banking product (Direct Debit), including the way direct debit mandates must be issued and managed (according to the current regulation, a direct debit mandate must be submitted to three locations: at the creditor (the supplier), the creditor bank and the debtor bank, most of the times on paper).

Commercial banks in Romania reached the conclusion that, if TRANSFOND implements the SDD payment schemes, along with a centralized service for managing direct debit mandates (at least for the interbank mandates), this would lead to an improvement in the way direct debits are processed. The consumers’ trust in direct debit payments would increase and therefore the new SDD scheme would make the direct debit product more attractive.

At the request of the Romanian Banking Association (RBA), TRANSFOND initiated a project to implement the SEPA payment schemes. The first phase (SEPA Credit Transfer for lei payments) was completed on 2 November 2012. The next step is SEPA Direct debit for lei payments.

The proposal TRANSFOND drafted together with the RBA includes:

The main benefit to the consumer (for both flows) is that the debtor needs to sign and submit the mandate only once. In addition, the information is automatically submitted to all parties involved (therefore the debtor no longer needs to submit the mandate to the creditor and the creditor bank).

Another advantage is that the SEPA Direct Debit scheme, although more complex in terms of the number and structure of payment messages, is more accommodating for the automatic processing and reconciliation (STP) of payment messages and especially exception messages (“R” messages).

The implementation of SEPA Direct Debit payment scheme and the Unique Register for Mandates - RUM for payments in national currency was completed and launched in April 2016.