The Four-Corner SDD Model and Mandate Flows

The four-corner model for SDD has the same shape as the SCT model, but the direction of the instruction is reversed. The creditor is the party that initiates the collection, the debtor is the party whose account is debited, the creditor bank receives the collection and passes it into clearing, and the debtor bank debits the debtor account. The clearing and settlement mechanism sits between the two banks, exchanging the collection messages and settling the funds. The creditor drives the flow, but the debtor bank holds the control, because it can reject a collection that has no valid mandate or insufficient funds. In the creditor driven mandate flow, the debtor gives the mandate to the creditor, and the creditor stores it. Jonas Weber signs the mandate on the Stadtwerke Linden website, and the utility stores the signed mandate in its own systems. When the collection is due, Stadtwerke Linden sends the collection instruction to its bank, Harbour Bank Frankfurt, and the instruction carries the mandate reference SWL-JW-2026-0417, the creditor identifier, and the debtor IBAN. The debtor bank receives the collection through clearing and checks the mandate data against what it holds, but the original mandate document stays with the creditor. In the debtor driven mandate flow, the debtor gives the mandate to its own bank, and the bank stores it. This flow is used in some countries and for some B2B arrangements, where the debtor bank must have the mandate on file before it will allow any collection. The debtor signs the mandate and sends it to the bank, the bank records the mandate reference, the creditor identifier, and the maximum amount, and it then authorises collections that match those details. The creditor still initiates the collection, but the debtor bank checks it against a mandate it holds itself, which gives the debtor stronger control. The mandate itself carries the facts that every later message must repeat accurately. It names the debtor and the creditor, it gives the debtor IBAN and the creditor identifier, it states whether the mandate is for a one off or a recurring collection, it gives the mandate reference, and it records the date and place of signature. For Jonas Weber, the mandate states a recurring collection of EUR 89.99, signed online in Hanover on 14 September 2026, with the reference SWL-JW-2026-0417. If any of these facts change, for example if Jonas Weber changes his bank account, the mandate must be amended, and the amendment must travel with the next collection. Worked example with numbers: Jonas Weber signs the mandate on the Stadtwerke Linden website, and the utility stores it under mandate reference SWL-JW-2026-0417. When the EUR 89.99 collection is due, Stadtwerke Linden sends the instruction to Harbour Bank Frankfurt, which sends a pacs.003 to Meridian Bank Munich, and Meridian Bank checks the mandate, confirms it is valid and not cancelled, and debits the Jonas Weber account. The mandate reference travels with every message, so that if the collection is disputed, any bank in the chain can find the mandate by its reference and prove that the collection was authorised. Failure and recovery: the mandate flow fails when the mandate is missing, cancelled or wrong, and the failure shows up as a rejected or returned collection. If Jonas Weber cancelled the mandate in October but Stadtwerke Linden still sent the November collection, Meridian Bank must reject it, because there is no valid mandate, and the utility must stop collecting until a new mandate is signed. If the mandate reference is wrong, the debtor bank cannot match the collection to a mandate, and the collection goes to a repair queue. The recovery is a corrected mandate reference and a resend, but the utility has lost a month, and the customer must be told why the collection failed. For a business analyst, product owner or subject matter expert, the mandate requirement must state the mandate fields, the debtor and creditor names, the debtor IBAN, the creditor identifier, whether the mandate is one off or recurring, and the mandate reference, and must state that every later message must repeat those facts accurately. The requirement must also state the two mandate flows, creditor driven and debtor driven, and must state which one applies in each country and for each scheme. The test pack must include a collection with a valid mandate, a collection with a cancelled mandate, and a collection with a wrong mandate reference, because each case exercises a different mandate rule. Source: EPC SDD Core Rulebook 2025; last reviewed 7 November 2026.