Cumulative SEPA credit transfer and SEPA direct debit update is available for Austria direct debit specific country format, update COR1 mandate scheme and changes in MT940 file import format functionality in Microsoft Dynamics AX

Executive summary

The Single Euro Payments Area (SEPA) is an initiative by the European Commission in which all electronic payments are considered domestic, regardless of the country/region where the individual, business, or organization, and the bank are located. Within this area, there is no difference between national and cross-border payments. The SEPA includes the 27 European Union (EU) member states, plus Iceland, Liechtenstein, Norway, Switzerland, and Monaco. The SEPA helps form a single market for payment transactions within the European Economic Area (EEA). Ultimately, the SEPA is expected to reduce the number of payment formats that banks, businesses, and individuals must work with.

The European Commission established the legal foundation for SEPA payments through the Payment Services Directive (PSD). The European Payments Council (EPC) supports the SEPA by:

• Setting standards for SEPA electronic payments by using the ISO 20022 Universal financial industry message scheme XML format.
• Setting rules and guidelines for handling euro payments.

The EPC, which consists of European banks, develops the commercial and technical frameworks for the SEPA payment instruments.

The EPC is committed to delivering three pan-European payment instruments:

• For credit transfers – SCT – SEPA Credit Transfer – supported in Microsoft Dynamics AX 2009 SP1, Microsoft Dynamics AX 2012 and Microsoft Dynamics AX 2012 R2.
• For direct debits – SDD – SEPA Direct Debit – supported in Microsoft Dynamics AX 2009 SP1, Microsoft Dynamics AX 2012 and Microsoft Dynamics AX 2012 R2.
• For cards – SEPA Cards Framework – is not supported by Microsoft Dynamics AX

SEPA Credit Transfer

A SEPA credit transfer is a payment from one company or individual to another company or individual. Payments must be in euros. Payments must include the International Bank Account Number (IBAN) and the Bank Identifier Code (BIC), also known as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) code, for both parties. Also, transaction costs must be shared between both parties.

Credit transfers that occur between parties should use XML files that comply with ISO 20022 payment processing standards and the XML format, as specified by the EPC.

SEPA Credit Transfers in Microsoft Dynamics AX
The SEPA credit transfer payment format is implemented by using the payment format functionality in Microsoft Dynamics AX. Nine SEPA export file formats are available in Microsoft Dynamics AX. These export formats conform to the SEPA ISO 20022 XML standard that is specified in the SEPA Credit Transfer Scheme Rulebook that the EPC releases and are currently supported in Microsoft Dynamics AX 2009 SP1, Microsoft Dynamics AX 2012 and Microsoft Dynamics AX2012 R2.

The following SEPA export file formats are currently available:

• The SEPA ISO20022 Credit Transfer export format is used for most countries/regions within the Single Euro Payments Area.
• Support is provided for eight countries that have special requirements, and a separate export format is provided for each of these countries: Austria, Belgium, Finland, France, Germany, Italy, Spain, and The Netherlands.

SEPA Direct Debit

A SEPA direct debit lets a creditor collect funds from a customer’s bank account, provided that a signed mandate has been granted by the customer to the creditor. The customer signs a mandate that authorizes the creditor to collect a payment and instructs the customer’s bank to pay the collection.

SEPA direct debits create, for the first time, a payment instrument that can be used for both national and cross-border euro direct debits throughout the 32 SEPA countries/regions. Beginning on February 1, 2014, SEPA Direct Debits will be mandatory for direct debits within the euro area.

There are two schemes available: the SEPA Core Direct Debit Scheme (B2C) and the SEPA Business to Business (B2B) Direct Debit Scheme. Both SEPA schemes use the same file format.


SEPA Direct Debits in Microsoft Dynamics AX
The SEPA direct debit generic payment format is currently supported in Microsoft Dynamics AX 2009 SP1, Microsoft Dynamics AX 2012 and Microsoft Dynamics AX2012 R2 and follows the EPC B2B and Core Direct Debit Scheme Rulebooks. The ability to deal with pre-notification and handle direct debit mandates is currently supported in Microsoft Dynamics AX 2009 SP1, Microsoft Dynamics AX 2012 and Microsoft Dynamics AX 2012 R2.

The following SEPA export file formats are currently available:

• The SEPA ISO20022 Credit Transfer export format is used for most countries/regions within the Single Euro Payments Area.
• Support is provided for seven countries that have special requirements and separate export format for each of these countries/regions: Austria, Belgium, France, Germany, Italy, Spain and The Netherlands.

SEPA Credit Transfer and Direct Debit format support

For both credit transfers and direct debits in SEPA, three levels of support are possible:

• Generic – Supports for Euro payments across the SEPA region
• Country – Supports Euro and non-Euro payments for a specific country
• Bank – Bank-specific formats used by individual bank or bank associations

Microsoft Dynamics AX will support only generic format and country formats for the specified countries/regions: Austria, Belgium, Finland (support only for credit transfer), France, Germany, Italy, Spain and The Netherlands.


More information

Microsoft Dynamics AX 2009 users already have their method of payment setup in the following location to use the SEPA Direct Debit export format:
Account Receivable/Setup/Methods of payment/File format tab/Setup button

Microsoft Dynamics AX 2012 and Microsoft Dynamics AX 2012 R2 users already have their outbound port configured.

If outbound port was already previously configured for Direct Debit, in that case, it needs to reselect "Export service operations" in Service contract customizations part and then enable all Data Policies.


Mandates

Mandates can be entered and maintained at the customer level. Reports can be generated to be sent to the customer for signing.
For more information about mandates, go to the following Microsoft website:
Single Euro Payment Area (SEPA) direct debit mandates

A method of payment can be marked to indicate that any transactions that use the method of payment have a valid mandate entered by selecting the Mandate required check box. In addition, any method of payment where the user has selected the Mandate required check box will want to have the Period dropdown field set to Invoice, which creates a separate payment for each invoice. This avoids issues in which customers use different mandates for different banks.

Transactions where a method of payment is not specified will use default method of payment and default mandate from the customer. The sales order and free text invoice let the user specify the mandate to be used.

During the payment proposal, users can select invoices to be paid by Mandate scheme and Payment type by adding the Customer direct debit mandate table to the proposal selection query.

Upon printing of invoices that use the method of payment with the Mandate required check box selected, a section will be printed on the invoice to indicate the specifics of the direct debit.

Creditor Scheme Identification ID (the Direct Debit ID field) has to be registered according to the Creditor Scheme Identification Rule. 
The dialog box for the file generation for CT and DD contains the following parameters:

• Format, the format of message: Strd or Ustrd. For Germany is always USTRD.
• Country, the country, country code for the country-specific version, leave blank to use the generic format.
• Processing date (for CT only), payment processing date
• Issuer (for DD only), the issuer of the creditor reference. This parameter is not required. In this case, it is defaulted with BBA for Belgium, CUR for the Netherlands and ISO for other countries. It affects the calculation of the creditor reference.
• Variant (for DE only), possible values are 002 and 003, where:
  • 002- DK Version 2.6 – file pain.001.002.03 for CT or pain.008.002.02 for DD will generate
  • 003- DK Version 2.7 – file pain.001.003.03 for CT or pain.008.003.02 for DD will generate

Additional information

Current release included changes that affected following countries: Belgium, Netherlands, France, Germany, Spain, Italy, Finland, and Austria.

Following fixes were included:

• Generic and all other above mentioned country specific formats:
  • SEPA Direct Debit: If user tries to generate a payment file for payments with status Sent, the warning message should refer to incorrect status instead of missing DD id (DAXSE 831940)
  • SEPA CT: Not able to send prepayments file (DAXSE 862825)
  • SEPA Ustrd should be limited to 140 characters for AX2009SP1 (DAXSE 879968)
  • Add new parameter: “Batch booking” for definition value: true or false for <BtchBookg> tag
  • SWIFT code will not obligatory for domestic payments
  • SEPA Direct Debit: Mandate reports should follow the EU Payment council guidelines (DAXSE 812374)
  • COR1 mandate scheme is added
  • Update MT-940 reconciliation functionality for AX2009SP1 and AX2012 regarding new requirements for SEPA payments.
    • Note: Additional update for AX2012R2 will be provide as a separate hotfix (DAXSE 854767, KB 2913800)
• Spain Credit Transfer
  • ES - SEPA CT does not bring the tax exempt number field into the xml file (DAXSE 848898)
• Austria Credit Transfer
  • Austrian SEPA Credit does not include PaymentID for AX2009SP1 (DAXSE 880324)

Releases for SEPA Credit Transfer and SEPA Direct Debit as of 10th Dec. 2013

Microsoft released update packages cumulatively. It means the next release include all previous released countries, corrections and new country update. It contains all the depending / related objects, which might be affected by the fix. In order to help AX customers and partners with extracting on their own only SEPA objects without dependencies to merge them with their customizations, Microsoft prepared and delivered to CSS AX projects isolating those changes from the whole packages. Those projects definitions will be included in the last SEPA update.

In order to fully utilize the SEPA features Credit Transfer and Direct Debit, in all the countries involved, the coming last update needs to be installed. After possible corrections any new fix will be published following as a hotfix.

1. KB 2769783
   Credit Transfer for generic, Belgium and Netherland country specific formats
   
   Version Availability date
   AX 2009SP1 31st Oct. 2012
   AX 2012 24th Oct. 2012
2. KB 2786631
   Direct Debit for generic, Belgium and Netherland country specific formats
   
   Version Availability date
   AX 2009SP1 14th Mar. 2013
   AX 2012 19th Apr. 2013
   AX 2012 R2 23rd Apr. 2013
3. KB 2851350
   Credit Transfer and Direct Debit for generic, France, Germany and Spain country specific formats
   
   Version Availability date
   AX 2009SP1 28th Jun. 2013
   AX 2012 28th Jun. 2013
   AX 2012 R2 28th Jun. 2013
   
   Affected countries: Belgium, Netherlands
   
   Following fixes were included:
   • Generic and all other above mentioned country specific formats:
     • Messages in CustOutPaymRecord_SEPA (Direct Debit) were corrected by using the term "customer" instead of "vendor."
     • Removed transaction amount limit validation for credit transfer
   • Belgium - SEPA credit transfer and payment id:
     • User can set "Payment id" on invoice/payment journal in Visual format of Belgian structured communication standard
     • If user who generates file for Belgium did specify Payment ID but still that payment id format is not in Visual format of Belgian structured communication standard, in XML file it will be inserted as Unstructured
     • In all other cases, it will be inserted as Unstructured message
4. KB 2871913
   Credit Transfer for generic, Italy and Finland and Direct Debit for generic and Finland specific country formats
   
   Affected countries: Belgium, Netherlands, France, Germany, Spain
   
   Version Availability date
   AX 2009SP1 19th Aug. 2013
   AX 2012 5th Aug. 2013
   AX 2012 R2 2nd Aug. 2013
   
   Following fixes were included:
   • Generic and all other above mentioned country specific formats:
     • Change that enables PaymentTypeInformation (PmtTpInf) to appear in the payment information, instead of with each direct debit transaction (DrctDbtTxInf).
     • Check the currency for all payments lines that is only in EUR.
     • Improvement for amendments functionality. If changes are made to Company name, Company direct debit id, Company Swift, Customer IBAN, or Customer Swift, then they are reflected in the <AmdmntInfDtls> tag in next generated file for this mandate.
     • Fix bug when you enter mandate with Usage count > 0 to fill RCUR or FNAL instead of FRST in the <SeqTp> node.
     • Add new transformation which enables to generate XML file without byte order mark (BOM).
   • Germany Credit Transfer country format:
     • Added the same condition for Payment Identification as for Belgium country format. If PaymentId is specified it will be filled in the <Ustrd> tag.
5. KB 2880634
   Credit Transfer for generic, Austria and Germany and Direct Debit for generic and Germany specific country formats
   
   Affected countries: Belgium, Netherlands, France, Germany, Spain, Italy, Finland
   
   Version Availability date
   AX 2009SP1 29th Oct. 2013
   AX 2012 7th Oct. 2013
   AX 2012 R2 10th Oct. 2013
   
   Following fixes were included:
   • Generic and all other above mentioned country specific formats:
     • Checking that the currency for all payments lines is only in EUR.
     • SEPA direct debit error "The customer is not fully settled" (DAXSE 805903)
     • VendPayments_SEPACreditTransfer_03_xsl displaying incorrect ISO Code for country (DAXSE 821871)
     • SEPA direct Debit mandate date is not updated if the signature date is changed (DAXSE 823891)
     • SEPA XML message: fields not mandatory and with no data should not be declared on the xml-file (DAXSE 823241)
   • Germany Credit Transfer country format:
     • Payment advice and Attending note are available for SEPA Credit Transfer DE (DAXSE 783488) – only for AX 2009 SP1
     • SEPA DE Covering letter from quantity of invoices (DAXSE 466550) – only for AX 2009 SP1

Resources

We aim to provide information about the Microsoft Dynamics products and services through our online resources – PartnerSource and CustomerSource. Both of these are web portals that provide a wealth of product information, online training, and access to the wider community of Microsoft Dynamics AX.

For more information about SEPA you can visit the download center:

• SEPA Credit Transfer:
  http://www.microsoft.com/en-us/download/details.aspx?id=30326
• SEPA Direct Debit:
  http://www.microsoft.com/en-us/download/details.aspx?id=41172
  http://technet.microsoft.com/EN-US/library/jj571733.aspx
• SEPA Direct Debit mandates:
  http://www.microsoft.com/en-us/download/details.aspx?id=37035

More topics / information and detailed instructions can be found on the TechNet:

• SEPA direct debit overview:
  http://technet.microsoft.com/EN-US/library/dn268411.aspx
• Set up SEPA direct debit mandate settings:
  http://technet.microsoft.com/EN-US/library/dn268415.aspx
• Draw customer payments by using SEPA direct debits:
  http://technet.microsoft.com/en-us/library/dn268412.aspx
• SEPA credit transfer overview:
  http://technet.microsoft.com/EN-US/library/dn268411.aspx
• Set up an outbound integration port for payments:
  http://technet.microsoft.com/en-us/library/hh446522.aspx

References

• European Payments Council (EPC)
  http://www.europeanpaymentscouncil.eu/
• EPC documents
  http://www.europeanpaymentscouncil.eu/knowledge_bank_list.cfm?documents_category=1
• Directive on Payment Services (PSD)
  http://ec.europa.eu/internal_market/payments/framework/index_en.htm
• European Central Bank
  http://www.ecb.europa.eu/paym/sepa/html/index.en.html
• European Commission
  http://ec.europa.eu/internal_market/payments/sepa/index_en.htm
• ISO 20022 Standard
  http://www.iso20022.org/

Hotfix information

A supported hotfix is available from Microsoft. There is a "Hotfix download available" section at the top of this Knowledge Base article. If you are encountering an issue downloading, installing this hotfix, or have other technical support questions, contact your partner or, if enrolled in a support plan directly with Microsoft, you can contact technical support for Microsoft Dynamics and create a new support request. To do this, visit the following Microsoft website: You can also contact technical support for Microsoft Dynamics by phone using these links for country specific phone numbers. To do this, visit one of the following Microsoft websites:

Partners Customers In special cases, charges that are ordinarily incurred for support calls may be canceled if a Technical Support Professional for Microsoft Dynamics and related products determines that a specific update will resolve your problem. The usual support costs will apply to any additional support questions and issues that do not qualify for the specific update in question.