SEPA Direct Debits (SDD)
On the Open Payment Framework
Rationalising Eurozone Direct Debits
SEPA Direct Debits (SDD, formerly PEDD or Pan European Direct Debits), as part of the larger European harmonisation
process, has been championed as a victory for common sense for the European consumer, but touted as another
revenue reducing initiative for financial institutions. The fact remains that SDD impacts all banks operating in the
Eurozone. The extra pressure on revenue streams is unavoidable in the short term, but longer term, differentiation
through extended value added direct debit services is the way forward.
SDD, a part of the overall Single Euro Payments Area (SEPA) initiative, is the payment instrument and scheme that by
2010 will have totally replaced currently existing domestic direct debiting schemes. SDD entails a new set of standards
and formats as well as a set of strict rules governing relations between creditor and debtor, their banks, as well as
between banks themselves. Banks are expected to start offering SDD (as well as the other SEPA instruments related
to credit transfers and cards) to their customers by 2009. Between 2009 and 2012, during a transitional phase, SDD
will co-exist with the current domestic direct debiting schemes.
A Direct Debit for All Seasons – M-PEDD
M-PEDD stands for Multipurpose Pan-European Direct Debits. The M-PEDD ‘scheme’ enlarges the scope of the SEPA
Direct Debits to include the Business-to-Business, Government-to-Consumer, and Government-to-Business spaces,
whereas the baseline SDD scheme focuses on the B2C space.
An Open Payment Framework to Support SDD Clear2Pay’s SEPA Direct Debits solution is based on the Open Payment Framework (OPF). The Open Payment
Framework from Clear2Pay is a library of component building blocks from which payments solutions can be derived.
The Open Payment Framework is built entirely on a Service Oriented Architecture (SOA) delivering common, reusable
services consisting of a comprehensive data model, choreographed payment business processes and configurable
services including parsing, validation, cost-based routing, warehousing, security, auditing and many more.
