GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
PAYMENTSSIGNAL

The interactive academy for the standards, messages, and rails that move money.

GET IN TOUCH
SEPA DIRECT DEBIT

No registered mandate: a B2B collection refused up front

Trigger: The debtor bank checks an incoming SDD B2B collection and finds no matching mandate registered for the debtor.

Contributor Shubham Mathure

What operations sees first: A B2B collection is refused before it can be applied, because the mandatory debtor-bank mandate check finds nothing on file.

WHERE IS THE MONEY?

Never left the debtor's account — no debit was booked at Bank Alfa.

DID SETTLEMENT HAPPEN?

The collection was refused at or before settlement, so no net movement stands between the banks.

WHO ACTS NEXT?

Bank Alfa (debtor bank) Asha Traders arranges for the debtor to register the signed mandate with Bank Alfa before resubmitting.

PLAY THE EXCEPTION

Trigger: Bank Alfa checks the collection but finds no matching mandate registered for this debtor and creditor.

STEP 1 / 8INTERNAL

The debtor signs a B2B mandate

Business debtor → Asha Traders (creditor)

The business debtor signs a B2B direct debit mandate authorising Asha Traders to collect from its account. Unlike Core, this authorisation is business-only and carries no consumer refund right.

Step 1 of 8: The debtor signs a B2B mandate

  1. 01Processing
    The debtor signs a B2B mandateBusiness debtor → Asha Traders (creditor)
  2. 02Processing
    The debtor registers the mandate with Bank AlfaBusiness debtor → Bank Alfa (debtor bank)
  3. 03Message
    Asha Traders submits the collectionAsha Traders (creditor) → Nordbank (creditor bank) · pain.008
  4. 04Message
    Nordbank sends the interbank collectionNordbank (creditor bank) → Clearing & settlement mechanism · pacs.003
  5. 05Processing
    Bank Alfa verifies the mandateBank Alfa (debtor bank)
  6. 06 · EXCEPTION PATHProcessing
    Bank Alfa finds no registered mandateBank Alfa (debtor bank)
  7. 07 · EXCEPTION PATHMessage
    Bank Alfa refuses the collectionBank Alfa (debtor bank) → Clearing & settlement mechanism · pacs.004
  8. 08 · EXCEPTION PATHProcessing
    Nordbank tells Asha TradersNordbank (creditor bank) → Asha Traders (creditor)
  9. OUTCOME
    Funds
    Never left the debtor's account — no debit was booked at Bank Alfa.
    Settlement
    The collection was refused at or before settlement, so no net movement stands between the banks.
    Who acts next
    Bank Alfa (debtor bank) — Asha Traders arranges for the debtor to register the signed mandate with Bank Alfa before resubmitting.
Full step-by-step text (works without JavaScript)
  1. 01Processing
    The debtor signs a B2B mandateBusiness debtor → Asha Traders (creditor)

    The business debtor signs a B2B direct debit mandate authorising Asha Traders to collect from its account. Unlike Core, this authorisation is business-only and carries no consumer refund right.

  2. 02Processing
    The debtor registers the mandate with Bank AlfaBusiness debtor → Bank Alfa (debtor bank)

    The B2B scheme requires the debtor to lodge the mandate details with its own bank. Bank Alfa stores this so it can later check every collection against a mandate it already knows about.

  3. 03Message
    Asha Traders submits the collectionAsha Traders (creditor) → Nordbank (creditor bank) · pain.008

    Asha Traders instructs Nordbank to collect the invoice. A corporate creditor sends a pain.008 collection request naming the debtor and referencing the signed mandate.

  4. 04Message
    Nordbank sends the interbank collectionNordbank (creditor bank) → Clearing & settlement mechanism · pacs.003

    The creditor bank converts the instruction into an interbank pacs.003 collection and submits it to the clearing and settlement mechanism for routing to Bank Alfa.

  5. 05Processing
    Bank Alfa verifies the mandateBank Alfa (debtor bank)

    This is the defining B2B step: the debtor bank must check the incoming collection against the mandate it registered before it debits. Core has no such mandatory pre-debit mandate check.

  6. 06 · EXCEPTION PATHProcessing
    Bank Alfa finds no registered mandateBank Alfa (debtor bank)

    The mandatory B2B mandate check fails: nothing on file matches. Because the debtor bank must verify before debiting, an unregistered mandate stops the collection here rather than allowing a later refund.

  7. 07 · EXCEPTION PATHMessage
    Bank Alfa refuses the collectionBank Alfa (debtor bank) → Clearing & settlement mechanism · pacs.004

    A pacs.004 carries the amount and the no-mandate reason code back toward Nordbank, referencing the original collection so it can be matched and unwound.

  8. 08 · EXCEPTION PATHProcessing
    Nordbank tells Asha TradersNordbank (creditor bank) → Asha Traders (creditor)

    Asha Traders learns the collection was refused for a missing registered mandate — a B2B-specific rejection reason that does not exist in the Core mandate model.

  9. OUTCOME
    Funds
    Never left the debtor's account — no debit was booked at Bank Alfa.
    Settlement
    The collection was refused at or before settlement, so no net movement stands between the banks.
    Who acts next
    Bank Alfa (debtor bank) — Asha Traders arranges for the debtor to register the signed mandate with Bank Alfa before resubmitting.

THE TIMELINE

  1. 01Asha Traders (creditor)
    Submits a B2B direct debit collection through Nordbank toward the business debtor.
  2. 02Bank Alfa (debtor bank)
    Runs the mandatory B2B mandate check and finds no matching registered mandate for this debtor and creditor.

    B2B requires the debtor bank to verify the mandate before debiting — Core has no such mandatory pre-debit check.

  3. 03Bank Alfa
    Refuses the collection and returns it with a no-mandate reason code.pacs.004
  4. 04Nordbank (creditor bank)
    Tells Asha Traders the collection was refused for a missing registered mandate.

Resolution: The B2B scheme trades the consumer refund right for a mandatory pre-debit mandate check. An unregistered mandate stops the collection here rather than allowing a later refund.

MESSAGES INVOLVED

LEARN THE CONCEPTS

Sources for this scenario2
  1. Scheme-specific rule2025 v1.1 (EPC222-07)

    2025 SEPA Direct Debit Business-to-Business rulebook version 1.1 (EPC222-07) ↗ — European Payments Council · mandate check

    Rules of the SDD Business-to-Business scheme, including mandatory debtor-bank mandate checking and the absence of a refund right for authorised collections. · Effective 2025-10-05 · Checked 2026-07-13

  2. Simplified educational illustration

    Payments Signal editorial teaching models — Payments Signal

    This site's own simplified teaching models. · Checked 2026-07-12

    What this simplifies: Single-cycle teaching model; participant-specific handling and exact timings vary.

    Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.