GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
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SEPA Direct Debit — B2B

A business-to-business euro direct debit where the creditor pulls funds from a corporate debtor, and the debtor bank must verify the registered mandate before debiting.

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Contributor Shubham Mathure

STEP 1 / 9INTERNAL

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 9: 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. 06Clearing obligation
    The CSM calculates positionsClearing & settlement mechanism
  7. 07Settlement
    Positions settle in central bank moneyBank Alfa (debtor bank) → Nordbank (creditor bank)
  8. 08Posting
    The debtor's account is debitedBank Alfa (debtor bank)
  9. 09Posting
    Asha Traders is creditedNordbank (creditor bank)
MESSAGECLEARING OBLIGATIONSETTLEMENTPOSTING
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. 06Clearing obligation
    The CSM calculates positionsClearing & settlement mechanism

    The CSM validates the collection and includes it in a clearing cycle. Each participant's obligations are calculated — this creates who-owes-whom, not yet a movement of money.

    Clearing produces obligations. No money has moved yet — that only happens at settlement.

  7. 07Settlement
    Positions settle in central bank moneyBank Alfa (debtor bank) → Nordbank (creditor bank)

    The calculated positions settle across the banks' settlement accounts at the central bank. Only now has money finally moved from Bank Alfa to Nordbank for the collection.

    • DR Bank Alfa settlement account — EUR 9,600.00
    • CR Nordbank settlement account — EUR 9,600.00
  8. 08Posting
    The debtor's account is debitedBank Alfa (debtor bank)

    Having verified the mandate, Bank Alfa books the debit on the business debtor's account. The pull has now taken money from the debtor to fund the settled collection.

    • DR Business debtor's account at Bank Alfa — EUR 9,600.00
  9. 09Posting
    Asha Traders is creditedNordbank (creditor bank)

    Nordbank credits Asha Traders for the collected invoice. The collection is complete end to end: mandate verified, banks settled, debtor debited, creditor credited.

    • CR Asha Traders' account at Nordbank — EUR 9,600.00

What this simplifies: One CSM, one settlement cycle, direct participants only, with mandate registration compressed into a single step. Real SEPA B2B processing batches collections, uses pre-notification, and may involve indirect participation through another bank.

LEARN THE CONCEPTS BEHIND THIS FLOW

Sources for this flow2
  1. Scheme-specific rule2025 v1.1 (EPC222-07)

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

    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 CSM and one clearing/settlement cycle; mandate registration is shown as one step, and pre-notification, batching, and indirect participation are omitted.

    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.