SEPA Credit Transfer Embraces Automatic Reconciliation of Received Corporate Payments

The introduction of harmonized Single Euro Payments Area payment schemes held a lot of promise for corporates. The corporate community expected, among other things, improved automatic reconciliation of credit transfers with outstanding payments in account receivables.


When a Corporate has wide relationships with its customers, it issues several invoices and, eventually, credit notes. The customers will make payments for the net amount of the invoices and credit notes received to settle the credit notes and, in some cases, where bilateral commercial relationships are in place, its own invoices or debit notes.

To allow automated reconciliation of the payment by the payee, the payer must provide adequate remittance information, e.g. the creditor references or other information about the invoices and credit notes that will be settled with the payment.

The ability of treasury and accounting systems to automatically reconcile incoming payments had been always hampered by the lack of standard structure of the remittance information, the limited space in payment messages, differences in bank reporting structure.

The roll out of the ISO 20022 partially solved these problems by offering unlimited space in the remittance information carried with credit transfers and a standard structure of the remittance information, possibilities that, unfortunately, were not enclosed in the SEPA Credit Transfer Scheme.

The European Association of Corporate Treasurers (EACT) has repeatedly proposed to modify the SEPA SCT Scheme to extend the remittance information to a multiple of 140 characters, using the standard ISO 20022 syntax, to enable Corporates to list more than one invoice with the remittance information.

Finally, in the 2018 SEPA Schemes Management Cycle, the EACT’s request for Extended Remittance Information (ERI) has been finally adopted since the European Payments Council (EPC) has introduced the ERI formal option in 2019 SCT Rulebook, allowing the transmission of multiple occurrences of structured remittance information per single SCT payment transaction.

The new ERI option gives originators the possibility to transmit e2e to the beneficiary, through the payment processing chain and the SEPA Credit Transfer messages used under the SCT scheme, a specific ERI combination of:

• One occurrence of 140 characters of unstructured remittance information.
• Up to 999 occurrences of 280 characters of structured remittance information based on the ISO 11649 standard.

It allows originator bank adhering to the ERI option to send to the beneficiary bank adhering to the option both structured and, if present in the payment initiation message, the unstructured remittance information and it allow the beneficiary bank to deliver to beneficiary the unstructured remittance information in the usual (paper and/or electronic) statement of account and the structured remittance information only to beneficiaries that with an electronic interface which does comply with the ISO 20022 XML standard.

That information will be transferred than to beneficiaries using the ISO 20022 Camt.53 Bank to Customer Statement and Camt.054 Bank to Customer Credit Notification, completing the migration towards the use of ISO standard from payment initiation to reconciliation, and really enhancing the capability of e2e straight through processing in payments management, increasing effectiveness of the end-to-end payment process, from originator to beneficiary.

Now Corporates should focus on one side on pressing their banking partners to adopt the SCT ERI Option and, on the other, to start investing in treasury systems and ERP upgrading to reap the benefits deriving from the finally possible availability of extended remittance information.