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SEPA and Direct Debit Mandates: Mandate Management, Signatures, etc.

While the migration of credit transfers to SEPA formats is relatively easy, the migration of direct debit mandates introduces more complexities, especially in regard to the format of direct debit mandates. Generally, SEPA regulations require a signed original document so that the direct debit is seen as authorised. Alternatively, the use of so-called eMandates is permitted. However, these are not (yet) available in all SEPA countries. In the German legislation for SEPA, for example, it was defined, that direct debits in text form can also be accepted. However, as an article in "Der Treasurer" 18/2013 showed, this issue is still being discussed. Thus, companies should contact their banks directly to clarify which direct debits are accepted.

One thing, however, is certain: SEPA means that companies have to adjust their mandate management or set it up from scratch. While companies previously created a new mandate if address, name, account number, etc. changed, this procedure is no longer possible under SEPA. As of 1 February 2014, existing mandates have to be updated in case of changes. These changes have to be tracked in a mandate management system. This facilitates a complete history of mandates, in order to, e.g., quickly verify and track the life cycle and the status of a mandate for returned direct debits.

Direct debit mandates also have to be sent in XML format in the future. The migration to the new SEPA format is a time-consuming and expensive challenge, if companies have many different host systems. The migration is especially difficult, if such systems cannot be updated but have to be reprogrammed. For these cases, Hanse Orga offers a solution that can be integrated centrally in the central SAP system. With the FinanceSuite Mandate Management, you can manage all mandates centrally and facilitate a group-wide, transparent monitoring. A Conversion Engine converts existing mandate formats from the different legacy systems to the new XML formats. With an enrichment function you can supplement existing direct debit mandates automatically with additional information that is required under SEPA. In case of returned direct debits, the solution performs an automatic processing and adjusts the mandate data in the system accordingly.

Please don't hesitate to contact us, if you would like to receive additional information about SEPA, mandates, etc.