SEPA instruments in depth: SCT, SCT Inst, SDD Core, SDD B2B

SEPA, the Single Euro Payments Area, covers euro payments across 34 countries. It does not replace payments in other currencies; non-euro domestic payments still use local schemes. There are four electronic SEPA payment instruments. The SEPA Credit Transfer (SCT) went live on 28 January 2008 and replaced all domestic credit transfers in euro on 1 February 2016. The SEPA Instant Credit Transfer (SCT Inst) went live in November 2017. The SEPA Direct Debit Core (SDD Core) and the SEPA Direct Debit B2B (SDD B2B) both went live on 2 November 2009. An analyst who knows these four dates can place any SEPA question in its historical context, and can explain why a payment behaves the way it does. The SCT is a push payment. The debtor instructs its bank to transfer funds to the beneficiary. The maximum execution time is one business day. The originator's account is debited on acceptance date D, and the beneficiary account is credited at the latest on D plus 1. The full amount is credited to the payee, with no deductions in transit. Remittance data runs to 140 characters, unstructured or structured, so the beneficiary can reconcile the payment with invoice information. IBAN and BIC are used in the interbank space as account identifiers. In the customer to bank space, only the IBAN is needed, under the SEPA IBAN Only Rule. Payments can be sent or received on behalf of another party, using the ultimate debtor and ultimate creditor fields, which matters for payment service providers that move money for their customers. The SCT Inst is also a push payment, but it executes within 10 seconds, every single day of the year. It is available 24 hours a day, 7 days a week, 365 days a year. The initial maximum amount was 15,000 euros, and scheme participants can agree bilaterally or multilaterally on a higher maximum and a shorter execution time; there is no scheme maximum amount since the 2025 rulebook removed the 100,000 euro cap effective 5 October 2025. The SCT Inst began as an optional scheme, and adherence was voluntary before the Instant Payments Regulation made instant payments mandatory for euro area payment service providers. Even so, 2,042 payment service providers from 16 countries, representing over 49 percent of European PSPs, had already adopted it before the regulation. The underlying principle is the same Four Corner Model as the classic SCT: payer, payer bank, payee bank, payee. The SDD Core is a pull payment. The creditor initiates the collection from the debtor's account under a signed mandate. The mandate can be electronic or paper, and the creditor is responsible for holding and modifying it. Presentation deadlines: first, one-off, and subsequent collections at the soonest 14 calendar days and at the latest 1 business day before the due date. The SDD B2B is used between businesses for funds collections. Participation is optional. The critical difference is refunds. Under SDD Core, the debtor has refund rights after execution: eight weeks for an authorised collection with no reason needed, and thirteen months for an unauthorised collection. Under SDD B2B, if the transaction was authorised with a signed mandate, the debtor has no refund rights. A refund is only available for an unauthorised collection not covered by a valid mandate. The analyst must build two different refund flows and must never offer a Core refund on a B2B collection. A side by side comparison makes the choice between the instruments clear. SCT is a push, executes within one business day, has no refund right, and suits one off and recurring payments where the payer controls the timing. SCT Inst is a push, executes within ten seconds, has no refund right, and suits urgent payments where the payer controls the timing and the value fits within the PSP limit. SDD Core is a pull, executes on the due date, gives the debtor an eight week refund right, and suits recurring collections from consumers. SDD B2B is a pull, executes on the due date, gives no refund right for authorised collections, and suits recurring collections between businesses where the debtor bank verifies the mandate before debiting. The analyst who can state this comparison in one paragraph can answer any scheme selection question. The Four Corner Model is the architecture underneath all four instruments. The four corners are the payer or debtor, the payer's bank, the payee's bank, and the payee or creditor. The payer instructs their own bank, the banks exchange messages through a clearing system, and the settlement happens through T2. The model is the same for SCT, SCT Inst, SDD Core and SDD B2B; only the direction of the instruction and the messages change. An analyst who draws the four corners for a payment, labels each corner, and then writes the message that travels between each pair of corners, has the complete picture of the payment, and can explain it to any audience without a diagram. Three initiatives sit alongside the instruments. The SEPA Cards Framework aims for any card issued in any SEPA country to be accepted in all SEPA countries. SEPA goes mobile covers mobile payments. SEPA for cash covers cash. Additional Optional Services, known as AOS, let communities offer extra services on top of the schemes, such as the SEPA Credit Transfer Reversal in France or the Change of Account Information service, which EBA STEP2 has implemented so banks can join it from anywhere in SEPA. AOS are optional. A payment service provider must first adhere to the basic scheme before offering an AOS. The analyst should check whether the bank's market uses an AOS, because an AOS changes the local behaviour: a French SCT reversal, for example, lets a payer bank reverse a payment in defined circumstances, which the basic scheme does not allow. Adherence is how a bank joins a scheme, and the analyst should understand it. A payment service provider adheres to a scheme by signing the adherence agreement with the EPC, confirming that it will follow the rulebook and the implementation guidelines, and registering in the EPC register of participants. Adherence is per scheme, so a bank can adhere to SCT without adhering to SDD B2B. The register is public, and an analyst can check whether a counterparty bank adheres to a scheme before designing a flow that depends on it. A payment sent to a bank that has not adhered to SCT Inst will fall back to SCT, and the product must handle that fallback explicitly. The rulebook versioning is the last operational detail. New versions of each rulebook are usually published every year in November, and they take effect on a fixed date, usually the third Sunday in November. A bank must implement the new version by that date, which means the analyst must track the annual release, read the change log, and raise a change request for any field, validation or code that has changed. A payment that follows last year's rulebook may be rejected under this year's, and the rejection will carry a reason code that points at the changed field. The analyst who tracks the November release is never surprised by it.