Answer»
- Some credit transfer or direct debit transactions require exceptional handling, because one of the parties involved does not or cannot process them in the normal way owing to some external factor or circumstance.
- This exceptional handling involves the sending of exception messages called R-transactions because their names all start with an “R”: rejects, refusals, returns, refunds, reversals, revocations and requests for cancellation. Which of these R-transactions is used depends on the point in time in the processing chain at which the R-transaction is initiated or sent, as well as on the party initiating or sending it.
- For credit transfers there are fewer types of R-transactions than for direct debits as the latter involves significantly more complex processes. To help straight-through processing (STP) of payment transactions, it is important that all parties to the transactions (payment service providers and companies initiating or receiving bulk payment transactions) prepare their systems to prevent R-transactions to the LARGEST extent POSSIBLE. Those companies that regularly deal with R-transactions, for instance with direct debit refunds, could EVEN prepare their systems to handle R-transactions. This would allow them to handle exceptions in a fully automatic way and much faster than manually.
- The exact definitions and usage rules of R-transactions are described in the SEPA credit transfer and SEPA direct debit rulebooks developed and maintained by the EUROPEAN Payments Council. Further information can also be obtained from payment service providers or from AUTOMATED clearing houses processing SEPA transactions.
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