Notification of Direct Debit Mandate Changes from Banks

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Recap of Direct Debit Procedures

To know better the scenarios of direct debit procedure, please refer to the previous blogs. From the business point of view, there are three stages of processing direct debit payments. 

1. Collecting payments via direct debit mandates: This stage involves the payer, the payee, their banks, and the payment service provider, or PSP. 
   For more information, see How to authorize Direct Debit Payments outside SEPA in Contract Accounting.
2. Direct debit instruction: It informs the bank from the user's side about the changes of direct debit mandates. For more information, see Bank Communication Using Direct Debit Mandate in SAP S4/HANA Private Cloud and On-Premise or Bank Communication Using Direct Debit Mandate in SAP S4/HANA Public Cloud .
3. Notification of mandate changes (NOC): It informs the users from the bank about the change of direct debit mandates, which is opposite direction to direct debit instructions.

This blog post mainly introduces the notification of mandate changes from banks and the step-by-step process how you can use it in both SAP S/4HANA Cloud Public Edition, and SAP S/4HANA Cloud Private Edition and SAP S/4HANA. You can read only the information about the relevant product.

Business Cases of Notification of Mandate Changes (NOC) 

Note: Case 2 will be implemented in the future releases. The procedures and operations in this blog post are mainly for case 1.

Case 1: NOC Initiated by Banks, such as: 

• Accounts closed or transferred to other banks. 
• Payer deceased. 

Case 2: NOC as a rejection of the previous direct debit instruction: 
The bank can reject the changes of mandate from the payer. This rejection serves as a message of a change of the direct debit instruction, which is another scenario of notification of changes. 

Prerequisites 

Since each bank has its own reason code system, when the bank's' reason codes are sent to the payee's system, the system needs to distinguish the external reason code by matching its internal reason code and later apply the mapping structure to generate the same layout. 

To receive the bank's notification of mandate changes (the external reason code) in SAP system, you must complete the configuration/customizing for mapping structure and internal codes. 

SAP S/4HANA Cloud Public Edition

Mapping for Notification of Changes
In this configuration step you create an entry as your NOC mapping type. Applying one mapping type ensures the same layout of the NOC from various banks.

1. In your configuration environment, open Notification of Mandate Changes: Applied Mapping (ID: 106772) 
   If your payment service provider is UK BACS, you can select the predefined mapping GB_ADDACS.
2. If you want to create your own mapping structure, open Map Format Data for Direct Debit Mandate Instructions (ID: 170015).  
   Select Incoming and Copy the GB_ADDACS. By doing so, you can modify this mapping to create your own structure.
   After you finish this step, you can go to step one to select your own mapping format.

Defining Internal Reason Codes
In this configuration step you define internal codes that are used for identifying external return reason from the banks.

1. In your configuration environment, open Notification of Mandate Changes: Define Internal Reason Codes (ID: 106774).
2. Create a new entry of internal reason code. See the example in the screenshot.

Assigning External Bank Codes to Internal Reason Codes
In this configuration step you assign the sender institution (payment service provider) and external reason code to the internal code.

1. In your configuration environment, open Notification of Mandate Change: Assignment of External Reason Codes (ID: 106773).
2. Enter a Sender Institution, Return Code External, and select the predefined Return Code Internal.

SAP S/4HANA Cloud Private Edition and SAP S/4HANA

Mapping for Notification of Changes

1. Use the Notification of Mandate Changes: Applied Mapping (view V_IDFIDDM_NOCTYC) in transaction SM30.
2. Create a new entry.
3. Assign your newly created NOC type to the format mapping. See the example below.

Defining Internal Reason Codes

1. Use the Notification of Mandate Changes: Define Internal Reason Codes (view V_IDFIDDM_NOCRI) in transaction SM30.
2. Create a new entry.
3. Select the checkboxes for internal code settings.

Assigning External Bank Codes to Internal Reason Codes

1. Use the Notification of Mandate Changes: Assign External Reason Codes (view V_IDFIDDM_NOCRE) in transaction SM30.
2. Create a new entry.
3. Enter your institution name and the external code based on the banking system.
4. Put the internal return code you defined in the previous activity. See the example below.

Extensibility Option for Determining Internal Reason Codes

You can use the Business Add-In BADI_DDM_NOC_RETURN_CODE_DETER to enhance the process by directly obtaining internal reason codes for NOC from the banks or payment service providers.

For example, you can implement the BAdI to combine the customizing activities Defining Internal Reason Codes and Assigning External Bank Codes to Internal Reason Codes. When you receive an NOC file with an external reason code "A", while creditor being "1". Your internal reason code is interpreted as "A1". If you receive an external reason code "A", while creditor being "2", you then get an internal reason code "A2".

SAP S/4HANA Cloud Public Edition

To enhance your internal codes determination, follow the steps to modify the sample codes based on your requirements.

1. In SAP Fiori Launchpad search for the Custom Logic app.
2. Select Create.
3. Search BADI_DDM_NOC_RETURN_CODE_DETER and select it.
4. Select Create and Publish.
5. After the publishing, the status is changed to Published.
6. You can copy the sample code provided by SAP and edit the codes.

SAP S/4HANA Cloud Private Edition and SAP S/4HANA
Use transaction SE18 to search for the BADI_DDM_NOC_RETURN_CODE_DETER and enhance your codes.

Processing NOC Files from Banks

After receiving the files about the mandate changes, upload these files and process them to change the mandate master data.

SAP S/4HANA Cloud Public Edition

Upload NOC Files
To process NOC files, you first upload the files from banks to save the information in the database.

1. In the SAP Fiori Launchpad, open Import Direct Debit Mandate Instructions Media app.
2. Enter a Run Date and Identification.
3. Select the Notification of Change Type which you have customized in Mapping for Notification of Changes. This NOC type ensures the same output for uploaded files.
4. Upload the file that you received from the bank.

Process NOC Data

1. Open Process Direct Debit Mandate Instructions (Notification of Changes) app.
2. Select Create.
3. Select the Process Notification of Mandate Changes as your Job Template.
4. Schedule the Job Run time.
5. In the Parameters, enter the Run Data and Identification to find the file that you have uploaded. 
   Select the Problem Class to specify the importance of information that is displayed after the execution.
6. Schedule the Run.

SAP S/4HANA Cloud Private Edition and SAP S/4HANA

Import Files of Mandate Change Notification

1.  Use the transaction FIDDMNOCI to import files of mandate change notifications.
2. Enter the Run Date and Identification.
3. Select the Notification of Change Type which you have customized in Notification of Mandate Changes: Applied Mapping. This NOC type ensures the same output for uploaded files.
4. Upload the file that you received from the bank.

Process Notification of Mandate Changes

1. Use the transaction FIDDMNOCP to process the imported data.
2. Enter the Run Date and Identification to find the file that you have uploaded. 
   Note: You can select the Effective Date Inclusion to process all files by the Run Date.
3. You can select the Problem Class to specify the importance of information displayed after the execution.
4. After the execution the mandate master data is changed as shown in the log.
   

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