R-transactions: reject, return, recall
When an SCT does not go to plan: rejects before settlement, returns after it, and recalls where the sender's bank asks — and may be refused.
L0 Explain simply
An everyday analogy: three different things can interrupt a delivery. The sorting office can refuse the parcel before it ever goes out — wrong address format, van already full: that is a reject, and nothing has really happened yet. The recipient's post office can accept it and then send it straight back — nobody by that name here: that is a return, and the parcel makes a real journey home. Or, days later, the sender can ring up and ask for the parcel back — I sent it twice by mistake: that is a recall, and here the recipient's side gets a say, because the parcel is already theirs. SEPA gives each of these its own message, its own rules, and its own deadlines — together they are the R-transactions.
L1 Core concepts
R-transactions are the SCT scheme's exception procedures, and the three to know are separated by one question: has settlement happened yet? A reject stops the payment before settlement — the CSM or the beneficiary bank refuses it, a negative pacs.002 travels back, and the money never moved between the banks. A return happens after settlement: the beneficiary bank received the funds but cannot or will not credit them — the account is closed, for instance — so it sends the money back with a pacs.004. A recall is different in kind: nothing was wrong with the payment itself, but the originator's bank wants it back — duplicate, technical error, fraud — so it sends a camt.056 request. The beneficiary bank answers with either a pacs.004 returning the funds or a camt.029 refusing. A recall is a request, never a guarantee.
L2 Practitioner view
Operations teams treat the three families very differently because the funds are in different places. After a reject, the originator was usually never debited, or is re-credited promptly — a data-quality fix and resubmission problem. After a return, real money came back: it must be matched to the original payment, the customer re-credited, and the reason code — drawn from the ISO 20022 external code sets — recorded, because recurring reasons point at broken reference data. A recall opens a case that can stay open for days: the beneficiary bank may need its customer's consent before debiting an account that was legitimately credited, and the answer may be no. Teams never promise that recalled funds will come back, and never close a recall case just because the request was sent. In SCT Inst the same logic applies at higher speed: rejects arrive within the timeout window, in seconds.
L3 Technical details
Correlation is what makes the machinery work. A camt.056 quotes the original pacs.008's identifiers — transaction id, end-to-end id, the original interbank settlement date and amount — so the receiving side can find the one payment it concerns; a pacs.004 carries the returned amount plus the same original references; a camt.029 answers a specific cancellation request, carrying reason information for the refusal. The scheme constrains which reasons are valid for which procedure, and the reason often determines the workflow: a closed-account return is routine, while a fraud-motivated recall triggers urgency and different handling. The rulebook also defines a separate request-for-recall procedure for originator reasons beyond the recall's defined set, and permits a fee to be deducted from returned funds in defined cases — one reason a returned amount can differ from the original.
Sources & standards1
- Scheme-specific rule2025 version 1.1 (EPC125-05)
2025 SEPA Credit Transfer rulebook ↗ — European Payments Council · 2025 SCT rulebook — exception handling procedures
Version 1.1 replaced version 1.0 at publication on 5 October 2025 and is stated to remain in effect up to 21 November 2027. It moves the date from which the unstructured address format is no longer permitted to 15 November 2026.
L4 Standards & sources
The time limits are scheme rules, checked here against the 2025 rulebooks in force since 5 October 2025 — confirm the current version before relying on them. A beneficiary bank must send a return within three banking business days after settlement. A recall citing duplicate sending or a technical problem must be initiated within ten banking business days of execution; a fraud-motivated recall can reach back thirteen months. Either way, the beneficiary bank must answer — funds or refusal — within fifteen banking business days. Other motives — a wrong amount, a wrong account — go through the separate request-for-recall procedure, also open for thirteen months, where the beneficiary customer's consent matters and a fee may be deducted from what comes back. SCT Inst mirrors this structure in its own rulebook with compressed reject timing; recall and return mechanics use the same messages.
Sources & standards3
- Scheme-specific rule2025 version 1.1 (EPC125-05)
2025 SEPA Credit Transfer rulebook ↗ — European Payments Council · 2025 SCT rulebook — return and recall procedures and time limits
Version 1.1 replaced version 1.0 at publication on 5 October 2025 and is stated to remain in effect up to 21 November 2027. It moves the date from which the unstructured address format is no longer permitted to 15 November 2026.
- Scheme-specific rule2025 version 1.1 (EPC004-16)
2025 SEPA Instant Credit Transfer rulebook ↗ — European Payments Council · 2025 SCT Inst rulebook — r-transaction procedures
Version 1.1 replaced version 1.0 at publication on 5 October 2025 and is stated to remain in effect up to 21 November 2027. The EPC states it is compliant with Regulation (EU) 2024/886, the Instant Payments Regulation.
- Scheme-specific ruleversion 4.0 (EPC131-17)
Clarification paper on SEPA Credit Transfer and SEPA Instant Credit Transfer rulebooks ↗ — European Payments Council · Clarification paper on the SCT and SCT Inst rulebooks — r-transaction questions
Version 4.0 applies to the 2025 SCT and SCT Inst rulebooks and replaces version 3.1 of EPC131-17.
SEE THE PAYMENT MOVE
Read the steps as text
- 02ProcessingBank Alfa validates the instructionBank Alfa (debtor agent)
The debtor agent checks the format, the IBAN, available funds, and runs compliance screening before accepting the instruction for execution.
Screening checkpoint: Debtor-agent transaction screening — Names and remittance data are screened against sanctions lists before the payment goes interbank.
- 03PostingThe debtor's account is debitedBank Alfa (debtor agent)
Once accepted, Bank Alfa books the debit. The customer's money has left their account, but no money has yet moved between banks.
- DR Debtor's current account at Bank Alfa — EUR 12,500.00
- 05Clearing obligationThe CSM calculates positionsClearing & settlement mechanism
The CSM validates the message and includes it in a clearing cycle. Each participant's obligations are calculated — this creates who-owes-whom, not yet a movement of money.
Clearing produces obligations. The banks do not have their money yet — that only happens at settlement.
- 06SettlementPositions settle in central bank moneyBank Alfa (debtor agent) → Nordbank (creditor agent)
The calculated positions settle across the banks' settlement accounts at the central bank. Only now has money finally moved between Bank Alfa and Nordbank.
- DR Bank Alfa settlement account — EUR 12,500.00
- CR Nordbank settlement account — EUR 12,500.00
- 08ProcessingNordbank validates and screens the incoming paymentNordbank (creditor agent)
The creditor agent checks that the account exists and can be credited, and runs its own sanctions screening on the incoming payment.
Screening checkpoint: Creditor-agent inbound screening — The receiving bank screens independently — it cannot rely on the sender's screening alone.
- 09PostingThe creditor's account is creditedNordbank (creditor agent)
Nordbank credits the beneficiary. The transfer is complete end to end: customer debited, banks settled, beneficiary credited.
- CR Creditor's current account at Nordbank — EUR 12,500.00
Read the steps as text
- 02ProcessingBank Alfa validates in real timeBank Alfa (debtor agent)
Format checks, balance check, and sanctions screening all happen in seconds. Anything slow here burns the scheme's time budget.
Screening checkpoint: Real-time transaction screening — Instant rails force screening to be fast and highly automated — there is no batch window to hide latency in.
- 03PostingThe debtor's funds are reservedBank Alfa (debtor agent)
Bank Alfa earmarks the amount. The final debit is confirmed only when the beneficiary bank accepts — instant payments are all-or-nothing.
- RESERVE Debtor's current account at Bank Alfa — EUR 480.00
- 06ProcessingNordbank decides — nowNordbank (creditor agent)
The creditor agent validates the account and screens the payment, then must answer positively or negatively within the scheme's window.
- 08SettlementSettlement happens immediately from prefunded positionsBank Alfa (debtor agent) → Nordbank (creditor agent)
The CSM moves the amount between the banks' prefunded positions in central bank money the moment the positive answer arrives. There is no waiting for a cycle.
- DR Bank Alfa prefunded position — EUR 480.00
- CR Nordbank prefunded position — EUR 480.00
- 09PostingThe creditor is credited within secondsNordbank (creditor agent)
The beneficiary can use the money immediately. Bank Alfa converts the reservation into a final debit at the same moment.
- CR Creditor's current account at Nordbank — EUR 480.00
Sources for this topic4
- Scheme-specific rule2025 version 1.1 (EPC125-05)
2025 SEPA Credit Transfer rulebook ↗ — European Payments Council · 2025 SCT rulebook — exception handling
Version 1.1 replaced version 1.0 at publication on 5 October 2025 and is stated to remain in effect up to 21 November 2027. It moves the date from which the unstructured address format is no longer permitted to 15 November 2026.
- Scheme-specific rule2025 version 1.1 (EPC004-16)
2025 SEPA Instant Credit Transfer rulebook ↗ — European Payments Council · 2025 SCT Inst rulebook — exception handling
Version 1.1 replaced version 1.0 at publication on 5 October 2025 and is stated to remain in effect up to 21 November 2027. The EPC states it is compliant with Regulation (EU) 2024/886, the Instant Payments Regulation.
- Scheme-specific ruleversion 4.0 (EPC131-17)
Clarification paper on SEPA Credit Transfer and SEPA Instant Credit Transfer rulebooks ↗ — European Payments Council · Clarification paper on the SCT and SCT Inst rulebooks
Version 4.0 applies to the 2025 SCT and SCT Inst rulebooks and replaces version 3.1 of EPC131-17.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: The parcel analogy compresses settlement into physical delivery, and the linked exception scenarios use fictional banks and customers. Reason-code handling and consent mechanics vary between institutions; specific ISO reason codes are deliberately not quoted here and should be read from the current implementation guidelines and external code sets.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.
Deepest material on this page: L4 — Standards & sources. Where a topic stops short of implementation depth, that is a deliberate coverage decision, not an oversight — see coverage.