SEPA Reason Codes Explained

The Complete Guide for your payments

When you operate in the Single Euro Payments Area (SEPA), smooth payment processing is the backbone of your business. But even in a standardized environment, payments can fail, and when they do, banks return a SEPA Reason Code. These codes are part of the EPC (European Payments Council) Rulebooks, which define how SEPA transactions must behave across Europe.These codes are part of a unified European framework that tells you exactly why a payment was rejected, returned, or stopped. They are essential for compliance, automation, and a seamless customer experience.

What Are SEPA Reason Codes?

SEPA Reason Codes are standardized indicators used by banks and payment institutions when:

a SEPA Credit Transfer cannot be processed,
a SEPA Instant payment fails,
a Direct Debit (SDD Core/B2B) is returned or refused.

Each code corresponds to a specific issue - invalid IBAN, insufficient funds, blocked account, missing mandate, duplication, and dozens of others.This standardization ensures that all European banks speak the same error language.

1. SEPA Credit Transfer (SCT) — EPC Reason Codes

These codes appear when a SEPA Credit Transfer is rejected, returned, or fails during processing.

Code	EPC Description
AC01	Incorrect account number format (invalid or non-existing IBAN).
AC03	Invalid creditor account number.
AC04	Account closed.
AC06	Account blocked/frozen.
AG01	Transaction forbidden by the debtor agent.
AG02	Invalid bank operation code or invalid file format.
AM04	Insufficient funds.
AM05	Duplicate payment.
AM09	Wrong amount.
ARDT	Transaction already returned (negative response to recall).
BE04	Missing or invalid creditor address (where legally required).
CNOR	Creditor bank not registered/unknown BIC.
DNOR	Debtor bank not registered for SEPA.
DUPL	Duplicate transaction.
FF01	Invalid file format or structural error in the message.
FOCR	Following cancellation request (positive recall).
FRAD	Fraud — recall initiated due to suspected fraud.
LEGL	Legal decision preventing execution.
MS02	Not specified by debtor (customer-driven rejection).
MS03	Not specified by agent (bank-driven rejection; reason withheld).
NOAS	No answer from customer.
NOOR	Original transaction not received.
RC01	Bank identifier incorrect (BIC invalid or missing).
RR01	Missing debtor account or identification (regulatory).
RR02	Missing debtor name or address (regulatory).
RR03	Missing creditor name or address (regulatory).
RR04	Regulatory reason (AML, sanctions, KYC, etc.).
TECH	Technical error in processing.
TM01	Cut-off time exceeded.

2. SEPA Instant Credit Transfer (SCT Inst) - EPC Reason Codes

Instant payments follow the same code structure, but the EPC adds specific instant-processing codes.

Code	EPC Description
AB05	Timeout at creditor agent.
AB06	Timeout at instructed agent.
AB07	Agent offline (unspecified).
AB08	Creditor agent offline.
AB09	Error at creditor agent.
AB10	Error at instructed agent.
AC01	Invalid account number (IBAN).
AC03	Invalid creditor account.
AC04	Account closed.
AC06	Blocked account.
AG01	Transaction forbidden.
AG02	Invalid transaction code/file structure.
AG09	Payment not received by creditor agent.
AG10	Agent suspended from instant scheme.
AG11	Creditor agent suspended from instant scheme.
AM02	Amount exceeds allowed instant transfer limit.
AM04	Insufficient funds.
AM05	Duplicate payment.
AM09	Wrong amount.
AM23	Amount exceeds settlement limit.
ARDT	Already returned.
BE04	Missing/invalid creditor address.
CNOR	Creditor bank not reachable in SCT Inst.
CUST	Cancellation requested by customer.
DNOR	Debtor bank not reachable in SCT Inst.
DUPL	Duplicate instruction.
FF01	File formatting error.
FOCR	Following cancellation/recall request.
FRAD	Fraud — recall initiated.
LEGL	Legal reason.
MD07	Creditor deceased.
MS02	Reject — unspecified debtor reason.
MS03	Reject — unspecified agent reason.
NOAS	No answer from customer.
NOOR	Original transaction not received.
RC01	Invalid or missing BIC.
RR01–RR04	Regulatory requirements not met (missing KYC fields).
TECH	Technical problem.
TM01	Cut-off or timing rule violation.

3. SEPA Direct Debit (SDD Core & B2B) - EPC Reason Codes

These apply to both Core and B2B schemes unless marked differently.

Code	EPC Description
AC01	Invalid debtor account number (IBAN).
AC04	Account closed.
AC06	Account blocked.
AC13	Invalid account type for mandate (e.g., B2B mandate on consumer account).
AG01	Direct debit forbidden on this account.
AG02	Invalid transaction code / file structure error.
AM04	Insufficient funds.
AM05	Duplicate collection.
BE05	Unknown initiating party (invalid Creditor Identifier).
CNOR	Creditor bank not registered.
DNOR	Debtor bank not reachable/registered for SDD.
ED05	Settlement failed.
FF01	Invalid file format or malformed message.
MD01	No mandate exists.
MD02	Mandate data invalid or missing.
MD06	Debtor claims refund (authorised but disputed). (Core only)
MD07	Debtor deceased.
MS02	Debtor refuses collection (prior to settlement).
MS03	Bank rejects for unspecified reason.
RC01	Invalid/missing BIC.
RR01	Missing debtor account information (regulatory).
RR02	Missing debtor name/address (regulatory).
RR03	Missing creditor name/address (regulatory).
RR04	Regulatory reason (sanctions, AML, restrictions).
SL01	Service-level restriction by debtor bank (e.g., only whitelist collections allowed).
PY01	Payment cannot be routed (no clearing path).

Why It Matters for Narvi Clients

At Narvi we process SEPA payments for fintechs, high-velocity businesses, and regulated industries. Understanding reason codes enables our clients to:

reduce operational delays,
build smarter automated flows,
provide better customer support,
improve financial predictability.

As your banking and payments partner, we ensure that every SEPA event is logged, explained, and accessible through our platform - so you always know what happened and why.

Official Source Reference (EPC)

All codes in this article are based on the following European Payments Council rulebooks and guidance documents:

EPC SEPA Credit Transfer Rulebook
EPC SEPA Instant Credit Transfer Rulebook
EPC SEPA Direct Debit Core Rulebook
EPC SEPA Direct Debit B2B Rulebook
EPC “Guidance on Reason Codes for SEPA R-Transactions”

These can be accessed at: https://www.europeanpaymentscouncil.eu/document-libraryThis ensures that all definitions provided above match the authoritative EPC standards used across the SEPA zone.

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