SEPA Direct Debit
Supporting Europe’s new recurring payment method in CiviCRM
Paul Delbar
Project 60
PROJECT 60 – MAKE IT HAPPEN
Topics
 What the hell is this SEPA thing ?
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What business problem are we solving ?
Solution architecture
CiviSDD implementation process
Status, plans
 Applause
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What is CiviSDD ?
SEPA Direct Debit and why you should care
If you are not fundraising in any of the Single European Payment Area
countries, feel free to skip this blog -- unless you want to discover how the
amazing CiviCRM community is building support for what is becoming
Europe's most important recurring payment instrument.
Do you know what direct debit means ? Don't feel bad admitting it. A
direct debit transaction is a payment that is initiated by the receiver, not
the sender. In practice, a donor gives you permission to ask his/her bank to
transfer money into your bank.
Fundraising using direct debit is interesting because once your donors
gives you the permission, they don't need to do anything : your job is to
create the next debit instruction for every agreement you have, send them
to the service provider who processes them (which could be your own
bank or another company) and manage the exceptions that will occur (like
your donors having insufficient balance in their account). Donors will feel
it's not worth taking the effort to cancel the agreement (and feeling bad
about it), so direct debit-based recurring donations tend to have a
looooong life.
SEPA was created to help facilitate funds transfer between member states.
Its first accomplishment was SEPA Credit Transfer. For example, my bank
account was called 778-5915387-91, which makes absolutely no sense to
my Irish and Ukrainian fans who want to send me money. Thanks to SEPA,
my bank account is now called BE23 7785 9153 8791, its IBAN number,
and anyone in a SEPA country can transfer funds to me. It took banks quite
a bit of effort to put this in place, but I'm told you can currently yell 'IBAN !'
in any bank's IT department without people jumping behind the nearest
desk.
Recurring payments across Europe were still a pain though. Most
countries had some sort of local instrument, like the Dutch machtiging or
the Belgian domiciliëring, which were pretty useless if you wanted to
support a Portuguese dog kennel or a Lithuanian orphanage, since they
tended to be
PROJECT 60 – MAKE IT HAPPEN
off-limits to non-national bank accounts. SEPA Direct Debit was designed to
provide a single system across Europe, based on IBAN bank account numbers,
which would replace all national systems in time. Note the last two words of
the previous sentence : while some countries (like Belgium) have been
operating SDD for over two years, other member states are frantically trying to
get ready before the April 2014 deadline. SEPA Direct Debit isn't easy for most
non-profits, because of its administrative and technical requirements. You
need to sign an agreement with the bank which will process your payment
requests (yes, only one single bank for all of Europe will do), manage the
agreements (called mandates in SEPAese) and submit the payment requests
for all of the mandates in a rather complex XML format. Banks have small
teams of knowledgeable folk, which typically aren't the ones non-profits talk
to. Technical staffing and IT capability generally aren't abundant in non-profits.
But the advantages are many : SDD provides a reliable, flexible and versatile
payment instrument for single and recurring donations. So many organizations
were stuck in the middle …
The CiviCRM community took notice of the issue. A number of CiviCRM
integrators, being queried by their customers for a solution, decided to build a
CiviCRM extension to support SEPA Direct Debit. The end result will be an
open source extension, free for everyone to download, install and use. So if
you're a CiviCRM user, you would be able to setup recurring SDD payments
easily, generate the XML with a click of a button, and run a recurring donation
stream without going through the technical hassle. The Project 60 team
working on this is targeting late June of 2013 for a first release, with current
customers acting as pilot users as well as funders for the initiative. There's also
a Make It Happen initiative for this extension.
Soon, you'll be able to install this extension and
• offer SEPA Direct Debit as a payment option on a contribution page
• import SDD mandates generated by face-to-face and other fundraising
channels
• automatically generate the required payment requests
• generate the XML needed to sublit the payments to the bank
• follow
up
on
mandate
and
payment
status,
integrated in the contributions tab
What is CiviSDD ?
Within the Single European Payment Area (SEPA), a new and unified model for
direct debit handling has been defined, which has been rolled out over Europe
over the last few years. Early 2014, most if not all countries will be required to
support this payment mode. It allows for recurring and one-off direct debits
(initiated by the creditor), but can be quite complex to handle.
This MIH will allow CiviCRM users to setup a SDD compliant payment process. It
will include the payment processor, admin screens for mandate and transaction
management, and will contain the logic to generate the appropriate XML-format
which is required by SEPA. In addition, we'll write up an integrator's handbook to
assist in setting up the complete SDD process with your bank.
See also http://civicrm.org/blogs/pdelbar/sepa-direct-debit-and-why-you-should-care
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What is CiviSDD ?
SEP
A
Single European Payment Area, a comprehensive standardization program
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SEPA Direct Debit
 Organizes DD payments in SEPA zone
 Clarify roles (creditor, debtor, banks)
 Standardize documents and workflow
 Supported by common legislation framework
 Why is this relevant to CiviCRM ?
 SDD B2C (Business to Consumer) governs all
direct debit transactions, single and recurring
 Replaces all country-specific protocols in 2014
 SDD is a very flexible payment instrument
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SEPA Direct Debit for Dummies
4
The donor’s bank executes the payment
using the SEPA Credit Transfer scheme
1
The donor signs a
SEPA- compliant mandate …
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3
2
The nonprofit organisation sends an XMLcoded transactions batch to its own bank
The nonprofit organisation encodes the
mandate and generates transactions
SEPA Direct Debit workflow
 Complexity for the nonprofit
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Get an SDD contract with its bank
Manage the mandate lifecycle
Generate single or recurring payment requests
Generate the appropriate XML
Follow up on payment and exceptions
 SDD has clear advantages
 Fast notification
 Flexibility (periodicity, amounts, …)
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Where are the complexities ?
 Legal requirements for mandates
 Types of mandates & transactions
 One-off (OOFF)
 Recurring (FRST and RCUR)
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Timeline for submission & processing
Retrieving status information
Batching transactions
Generating the XML
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Mandates
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mandate reference
debtor information
creditor information
in addition
 monthly amount
 when debits will start
 pre-notification
 SDD refund rules
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SDD timelines
FRST
Tdebit - 5
RCUR
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Tdebit
Tdebit - 2
Tdebit + 5
Tdebit + 2
Things going boo in the dark
ERRORS
Julie
misses a few
payments due to
insufficient
balance on her
account
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ABANDONS
Fred
is having second
thoughts and
decides to stop
donating
UPGRADES
Tom
gets an upgrade
call and is willing
to increase the
monthly amount
from 6 to 8 EUR
XML … what can I say
 Standard … not
 Banks
 write crap software
 give crap errors like
‘XML error’
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Project 60 SEPA Direct Debit Processing
Deliverables
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Support the SEPA Direct Debit B2C Core
model / rulebook
Manage multiple creditor identities
Provide a SEPA-compliant Direct Debit
payment processor
Manage the SDD mandate lifecycle
Generate one-off and recurring
payment requests
Generate the XML required for bank
submission
Automate the exception and feedback
processing (requires CiviBanking)
Integrator’s Guides :
￭ Implementing an SDD workflow
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Benefits
￭
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Become operational with SEPA Direct
Debit without a significant investment
in understanding SDD protocols
Tap into the fundraising potential
offered by flexible and versatile bank
account-based recurring payments
Standardize recurring payments or
memberships and long-term supporters
on the new European standard
Be ready to deploy the new European
recurring payment model in time !
Solution architecture
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The SDD engine
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Components
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Data model for the SDD extension
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Demo ? Really ?
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Project 60
The naked truth
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Project 60 Scope
In real applications of CiviCRM, there are many processes which involve handling information between
CiviCRM and bank accounts, which are currently handled manually or by custom scripts
Importing bank payment
information
Financial
Transaction
s
(Bank
Accounts)
Decoding bank payments into
contributions
Reconciling contributions and bank
accounts
CiviCRM
Managing SEPA Direct Debit
recurring payments
Project 60 is an initiative of a number of European CiviCRM integrators who want to develop a number
of extensions supporting these processes.
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Key Project 60 components
Working with bank payment
information
Supporting SEPA Direct Debit
payment processes
Facilitate assisted
interpretation of payment into
contributions, memberships, …
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Project 60 active participants
 Tech to the People – France
 Xavier Dutoit
 Systopia – Germany
 Björn Endres, Fabian Schuttenberg
 delius – Belgium
 Paul Delbar, Chris Madou
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