SEPA Credit Transfer

SEPA Europe

Since 1st February 2014, SEPA Credit Transfers shall replace national credit transfer processes in Eurozone countries once and for all.

The Single European Payment Area consists of 33 European countries and more than 500 million citizens.

Those making and receiving payments as well as their payment service providers shall be identified by two specific numbers in SEPA Credit Transfers:

  • the IBAN (International Bank Account Number)
  • the BIC (Business Identifier Code)

instead of the traditional account number and bank code.

 

IBAN

 

BIC

SEPA Credit Transfers can be exclusively processed in euros. For payments in other European currencies (e.g. British pound or Danish kroners), specific additional forms (e.g. an overseas bank transfer) and processing conditions (e.g. fees, execution periods) are required. A SEPA Credit Transfer must be credited to the recipient’s account after one bank working day. Similarly, a European SEPA Credit Transfer may not be more expensive than a national bank transfer.

In E-commerce, SEPA Credit Transfers are primarily used for payments in advance or payments by invoice.

Online merchants must ensure that they provide end customers with their IBAN and BIC bank details. It therefore makes sense for the IBAN and BIC bank details to be clearly indicated on invoices and on the website with immediate effect, and to continue providing national bank details until the end of the year.

The benefit of this standardized European credit transfer is clear, as the switch to SEPA means no more “overseas bank transfers”! It doesn’t matter whether the end customers are transferring funds from Munich, Milan or Madrid; the transfer is the same for every European. This provides the possibility of selling goods and services more efficient across Europe and offering online payment in advance and/or by invoice on a Europe-wide basis.

The main advantage of the SEPA Credit Transfer is the 100% secure payment. The fulfilled credit transfer cannot be reversed by the end customers.

When the payment is made by the end customer via SEPA Credit Transfer, the payment amount is credited to the account within 24 hours and the payer is not able to charge it back.

SEPA Credit Transfer as such is ideal for secure one-time payments.

SEPA Credit Transfer payments are highly recommended for depositing funds to eWallet accounts or for Money Transfer Services.

Similarly, SEPA Credit Transfer is suggested for the sale of high-value goods, where the Merchant would like to receive an advance payment, before sending out goods (Payment in Advance).

 

Business Scenario

The BalticPay-Bank holds an own worldwide addressable BIC (BLOILV21XXX).

To this BIC BalticPay-Bank creates an IBAN bank account for every of its merchants.

This at the BalticPay Bank managed account can receive Credit Transfer payments.

If the end customer chooses SEPA Credit Transfer as payment method online, at the request of the Payment Page a clear usage for payment will be created. Bank account details and usage for payment will be transmitted at the Payment Page.

As far as the payment is credited to the bank account at the BalticPay Bank, a matching of the incoming payment and the order occurs. The merchant gets informed about payment receipt and can deliver the goods to the end customer or provide the service.

 

SEPA Credit Transfer scenario from the end-customer and merchant view

Credit Transfer flowchart

1The end-customer goes to the online shop, chooses goods to buy.

2After shopping the end-customer chooseses to buy by invoice or payment in advance.

3Payment page by BalticPay Corporation is generated with following information:

      • - Bankaccount (BIC);
      • - Account Number (IBAN);
      • - Account Holder (Merchant Name);
      • - Usage (Payment Order Number);
      • - Amount.

4The Payment Order Number is sent to the merchant as an Reservation Transaction for a Pending Payment.

5The end-customer did made an Credit Transfer via Online Bank account or physical bank form.

6The Credit Transfer will be send to the BalticPay Bank and will be matched with the Reservation Transaction. The Transaction will be captured.

7BalticPay Corporation automatically sends notification to the merchant that payment order is paid.

8Merchant sends goods to the end-customer by post or allows to use service.

 

Virtual account number

Since the BalticPay Bank has its own addressable BIC, a countless number of bank accounts can be opened.

This is especially useful for merchants with a variety of individual payments. Here, each end customer can have its own virtual account number to which the money is transferred.

The assignment of payment income is then no longer succeeding through payment usage, but through the unique IBAN account number.

Every user receives a unique bank account number from which the funds transfer to the merchant’s bank account. This facilitates automatic reconciliation - each “unique user account” is allocated to only one user. Wrong or missing data on the reason for payment will not affect the reconciliation.

The virtual account numbers are perfect for:

  • Funding of an eWallet
  • Money Transfer Services
  • Dunning & Collection Services
  • Virtual Prepaid Accounts like Video Chats,
  • Gaming & Gambling Accounts

 

Payout-Services

In addition to receiving payments Credit Transfer is also suitable for Payout services as mass withdrawals.

The transfers are exported from the merchant bank account to the end customers.

These could be:

  • Withdrawal from an eWallet Account
  • Affiliate Commission
  • Receiving Money from a Money Transfer
  • Service
  • Winnings & Revenues

The advantage of the credit transfer is the guaranteed secure payment within 24 hours. Every European can make and receive payments by Credit Transfer with its own bank account.

Due to our own bank code BalticPay Bank can provide specific requirements and payment solutions for the Internet business.

 

 

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