Put SEPA Direct Debit — Core back in order

THE DRILL AS TEXT

1. In SEPA Direct Debit — Core, what happens first, and what follows?
   • Asha Traders confirms the mandate — Before pulling any money, the biller checks it holds a valid mandate that Riya signed authorising these collections. The mandate — not the invoice — is what permits the pull; no mandate means no right to debit.
   • Asha Traders pre-notifies Riya of the collection — The creditor tells the debtor the amount and the due date in advance, so Riya can expect the debit and keep the account funded. This is a courtesy notice ahead of the pull, not the money movement itself.
   • Asha Traders submits the collection to Nordbank — Here is the mirror image of a credit transfer: the instruction starts at the payee. Asha Traders sends a pain.008 collection request to its own bank, Nordbank, to go and pull the funds from Riya's account.
   • Nordbank submits the interbank collection — Nordbank converts the customer collection into an interbank pacs.003 and submits it to the clearing and settlement mechanism, which will route it toward the debtor's bank to be collected on the due date.
   • The CSM calculates obligations — On the due date the CSM validates the collection and includes it in a clearing cycle, calculating who owes whom. In a pull this obligation runs from the debtor's bank to the creditor's bank — the reverse of a credit transfer.
   • Positions settle in central bank money — The calculated positions settle across the banks' accounts at the central bank. Money moves from Bank Alfa (debtor side) to Nordbank (creditor side) — funds flowing debtor to creditor even though the instruction came from the creditor.