SEPA Credit Transfer

SEPA schemes, rules, and standards enable the providers of payment services to offer credit transfer services throughout SEPA for single, bulk, and repetitive payments. The standards for the scheme facilitate payment initiation, processing, and reconciliation based on straight-through processing. The scheme permits the end-to-end carrying of remittance data on a structured and unstructured basis appropriate to the nature of payment.

The SEPA credit transfer scheme defines a common set of rules and processes for credit transfers denominated in the euro currency. The scheme defines a common service level and a time frame under which financial institutions participating in the scheme must, at a minimum, conduct SEPA credit transfers.

To enable a SEPA credit transfer to occur, PeopleSoft does this:

  • Predefines SEPA credit transfer layouts, which adhere to ISO 20022 credit transfer standards and are in compliance with SEPA rules.

  • Provides the functionality to initiate an input message with SEPA compliant information to PeopleSoft Financial Gateway.

  • Provides the functionality to accept the SEPA format for rejecting and returning a message and store the format in PeopleSoft Financial Gateway.

SEPA credit transfers begin with the initiation of SEPA credit transfer payments by the payment originator. To transfer the funds, the payment originator instructs the bank in which the originator holds a bank account to move the funds to the account of the beneficiary. The originator's bank then processes the SEPA credit transfer payment instruction according to the SEPA credit transfer scheme and transfers the funds using clearing and settlement mechanisms to the beneficiary's bank. The beneficiary's bank then credits the account of the beneficiary.

The initiation process of the funds transfer typically affects PeopleSoft Payables, because payments are most often triggered by the purchase of goods and services. However, this process may also be initiated from PeopleSoft Cash Management if funds are transferred between accounts or payments that are made to a Treasury counterparty or from a third-party application.

The XML message, which is sent by the payment originator to the bank, contains all of the relevant information related to the payment instruction. Based on SEPA, the bank and customer can agree on how to transfer payment instructions and in which format. However, the banks will typically follow the EPC recommendation.

Message structure for a SEPA Credit Transfer

SEPA Credit Transfer Message Structure