Case Study: Germany’s UTA Implements SEPA Direct Debits

The direct debit payment instrument is essential to the business model of Union Tank Eckstein GmbH & Co. KG (UTA). The German transport services provider serves European passenger and commercial goods drivers and customers, which need to make payments for motorway tolls, diesel or breakdown charges as they travel across the continent. The UTA service card is the means to do this. The multi-use payment card product can be used in 37 different European countries. However, our firm’s business model also means that we have to process direct debits from each European country, explains Thomas Wolpert, UTA’s senior credit manager. With differing systems in each country, this was a very complex process, which necessitated bank accounts in each nation. 

UTA were interested in the harmonised single euro payments area (SEPA) Direct Debit (SDD) scheme for business-to-business (B2B) end users from the very beginning of the payments harmonisation project as it offered a solution to the cross-border complexity the company has to deal with. We began an implementation project back in early 2010, explains Wolpert. The first test SDD (B2B) transaction was handled by Commerzbank in December 2010. During 2011 and 2012, further tests were run, gaining valuable experience and optimising the processes. 

At the end of October 2012, UTA began sending SDD (B2B) request mandates to our customers, continues Wolpert. We’re currently sending out more than a 1,000 SEPA mandate packages every week, providing them with information and a request to start using the SDD (B2B) mandate format. 

Starting the SEPA B2B Implementation Process

Before UTA could start using the business-to-business (B2B) SDD system, all of the company’s systems had to be modified. We had to ensure that all national direct debit systems could run concurrently until 2014, when the migration deadline for SEPA begins. This complexity required comprehensive coordination at the system level as well as between UTA’s customers and their banks. 

We tested the process intensively from 2011 until May 2012 – during this time we sent out 200 SEPA packages per month to our bigger clients. After that, we felt confident of having a functional and satisfactory process in place. 

The first customers we sent the SDD (B2B) request mandates to were companies with a high turnover. Our experience has told us that these companies already have some SEPA knowledge, while smaller companies are less aware of the initiative. 

Working with Commerzbank

Our main partner for the SDD implementation was Commerzbank. Together, we conducted a SEPA ‘business-impact’ analysis, which provided data on the nature and effects of the SEPA introduction. Commerzbank’s SEPA specialists have been on-hand for advice throughout. 

Meanwhile, the IT systems adaptation was done by our own IT department. This was a major undertaking because we have an in-house system – rather than an SAP system – and there was an enormous amount of detail involved. 

Smoothing Out the Glitches

The SEPA implementation is an on-going business. UTA’s customers and their banks send us frequent queries, which we have to resolve. On the whole, we have found that the main points of the SDD (B2B) implementation process are clear, but this isn’t always the case for some of the smaller details. 

For example, at the moment, there is a lack of clarity over the validity of electronically archived SDD (B2B) mandates. With this scheme, the onus is on the corporate to keep and archive its SDD (B2B) mandates (in the case of ‘Abbuchungsaufträgen’, the legacy B2B direct debit scheme, this was previously done by the debtor bank). 

At present, a physical paper copy of the mandate needs to be kept on file. We hope that a functioning and secure electronic process will be made available as quickly as possible because the paper-based handling causes significant problems. For example, if a customer changes bank and the changeover needs to be processed manually, this can cause a delay to the payment. 

Another issue that arose during the early stages of our SDD (B2B) implementation project was a problem with our mandate reference number. UTA used a full stop (‘.’) within the number, but many debtor banks weren’t able to process it in their systems. After many checks, we re-created a reference number without a full stop and it’s now working better. This is just one example of the small technical issues that need to be ironed out as you go along. 

Benefits and Pitfalls of an SDD Implementation Project

The advantages of completing a SEPA migration project, ahead of the 1 February 2014 migration date for eurozone countries (non-euro countries follow in 2016), were numerous but principally the benefits to UTA are: 

  • Standardisation of SEPA processes in all European countries. This means staff no longer need to be conversant with numerous direct debit procedures, just one process is sufficient. 
  • Optimisation of the banking and cost structure.
  • Better risk control through the uniform repeal deadline in all countries.  
  • Return debit handling is also standardised, which is a great improvement on the various return debit handling processes. 

However, corporates also need to bear in mind the following challenges and considerations:  

  • The complexity of the SEPA introduction should not be underestimated. 
  • It’s not just an IT project, the whole organisation is affected. 
  • Customer communication is paramount because many smaller companies still have low SEPA awareness. 
  • Likewise, communication with banks is also important. It’s not always easy to identify the SEPA expert at a bank. 
  • Error handling procedures, such as incorrectly completed mandate forms, should not be underestimated. Resolving such errors with your customers can be time-consuming. 


UTA is prepared for the SEPA compliance deadline on 1 February 2014. We can now use standard SEPA Credit Transfer (SCT) payments and a uniform direct debit system across the whole SEPA region. This means we just need one direct debit mandate format and we can also optimise our bank account structure. At the moment, we still have the national direct debit systems running in parallel so at this stage it’s too early to make any judgements about the real benefits of the SDD (B2B), but we expect to gain definite efficiency benefits. 

I recommend that companies address the topic of SEPA as soon as possible and start the implementation. There is little effective time remaining until the 2014 migration date and banks really have to get the message across to their customers about what is required for the transition to SEPA. Since the beginning of 2012, there are signs of increasing SEPA awareness among our own customers, but banks and businesses’ still have much to do in terms of education. 




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