Intelligent retry strategies for SEPA Direct Debit payment failures and R-transactions

Auto Rescue for SEPA

Auto Rescue for SEPA automatically handles failed SEPA Direct Debit payments, including R-transactions (returns, refusals, and reversals). SEPA Direct Debit has unique timing requirements and failure modes that require specialized retry strategies.

SEPA Direct Debit Lifecycle

Understanding the SEPA payment lifecycle is essential for effective recovery:

R-Transaction Types

SEPA returns (R-transactions) have specific codes and meanings:

Return Codes (Most Common)

Code	Name	Description	Retryable
`AC01`	Incorrect Account Number	IBAN is wrong	No
`AC04`	Closed Account	Account has been closed	No
`AC06`	Blocked Account	Account is blocked	Maybe
`AG01`	Transaction Forbidden	Not authorized for DD	No
`AG02`	Invalid Bank Operation Code	Technical error	Yes
`AM04`	Insufficient Funds	Not enough balance	Yes
`AM05`	Duplicate Collection	Already debited	No
`BE05`	Unknown Creditor ID	Creditor not recognized	No
`FF01`	Invalid File Format	Technical error	Yes
`MD01`	No Mandate	Mandate not found/cancelled	No
`MD06`	Refund Request	Customer requested refund	No
`MS02`	Reason Not Specified	Customer refused	Maybe
`MS03`	Reason Not Specified	Agent refused	Maybe
`RC01`	Bank Identifier Incorrect	BIC is wrong	No
`SL01`	Service Not Allowed	DD not permitted	No

R-transactions typically arrive 2-5 business days after the debit date. Plexy automatically monitors for returns and initiates Auto Rescue when appropriate.

How Auto Rescue Handles SEPA

Enabling Auto Rescue for SEPA

curl -X POST https://api.plexypay.com/v2/payments \
  -H "x-api-key: Bearer YOUR_API_KEY" \
  -H "Content-Type: application/json" \
  -d '{
    "amount": 4999,
    "currency": "EUR",
    "customer": "cus_abc123",
    "payment_method": "pm_sepa_debit_xyz789",
    "payment_method_options": {
      "sepa_debit": {
        "mandate": "md_abc123"
      }
    },
    "auto_rescue": {
      "enabled": true,
      "max_retries": 3,
      "retry_window_days": 21
    },
    "metadata": {
      "subscription_id": "sub_monthly_123"
    }
  }'

import { Plexy } from '@plexy/plexy-web';

const plexy = new Plexy({
  apiKey: process.env.PLEXY_SECRET_KEY,
});

const payment = await plexy.payments.create({
  amount: 4999,
  currency: 'EUR',
  customer: 'cus_abc123',
  payment_method: 'pm_sepa_debit_xyz789',
  payment_method_options: {
    sepa_debit: {
      mandate: 'md_abc123',
    },
  },
  auto_rescue: {
    enabled: true,
    max_retries: 3,
    retry_window_days: 21,
  },
  metadata: {
    subscription_id: 'sub_monthly_123',
  },
});

console.log('Payment status:', payment.status);

import os
from plexy import Plexy

plexy = Plexy(api_key=os.environ['PLEXY_SECRET_KEY'])

payment = plexy.payments.create(
    amount=4999,
    currency='EUR',
    customer='cus_abc123',
    payment_method='pm_sepa_debit_xyz789',
    payment_method_options={
        'sepa_debit': {
            'mandate': 'md_abc123',
        },
    },
    auto_rescue={
        'enabled': True,
        'max_retries': 3,
        'retry_window_days': 21,
    },
    metadata={
        'subscription_id': 'sub_monthly_123',
    },
)

print(f"Payment status: {payment.status}")

SEPA-Specific Configuration

Retry Timing

SEPA has minimum timing requirements:

Constraint	Requirement
Minimum retry delay	2 business days after R-transaction
Due date lead time	D-2 for Core, D-1 for B2B
Pre-notification	14 days before first debit, unless agreed otherwise
Settlement time	2-5 business days

Configure timing accordingly:

const payment = await plexy.payments.create({
  amount: 4999,
  currency: 'EUR',
  customer: 'cus_abc123',
  payment_method: 'pm_sepa_debit_xyz789',
  auto_rescue: {
    enabled: true,
    sepa_options: {
      // Minimum days between retry attempts (SEPA rules require >= 2)
      min_retry_interval_days: 5,
      // Whether to send pre-notification for retries
      send_prenotification: true,
      // Days of pre-notification before debit (default 14)
      prenotification_days: 5, // Reduced if customer agreed
    },
    max_retries: 3,
  },
});

R-Code Strategies

Configure different strategies based on R-transaction codes:

const payment = await plexy.payments.create({
  amount: 4999,
  currency: 'EUR',
  customer: 'cus_abc123',
  payment_method: 'pm_sepa_debit_xyz789',
  auto_rescue: {
    enabled: true,
    r_code_strategies: {
      // Insufficient funds - retry around typical paydays
      AM04: {
        retry: true,
        schedule_days: [5, 12, 20], // Spread across month
        notify_customer: true,
      },
      // Blocked account - retry once, then investigate
      AC06: {
        retry: true,
        max_retries: 1,
        schedule_days: [7],
        escalate_on_failure: true,
      },
      // Mandate cancelled - do not retry
      MD01: {
        retry: false,
        action: 'contact_customer',
        deactivate_mandate: true,
      },
      // Customer refund request - do not retry
      MD06: {
        retry: false,
        action: 'process_refund',
      },
    },
  },
});

Webhook Events

payment.sepa_return_received

Sent when an R-transaction is received.

{
  "id": "evt_abc123",
  "type": "payment.sepa_return_received",
  "created_at": "2026-03-28T09:15:00Z",
  "data": {
    "payment": "pay_xyz789",
    "customer": "cus_abc123",
    "amount": 4999,
    "currency": "EUR",
    "mandate": "md_abc123",
    "r_transaction": {
      "code": "AM04",
      "reason": "Insufficient Funds",
      "received_at": "2026-03-28T09:15:00Z",
      "original_debit_date": "2026-03-25"
    },
    "auto_rescue": {
      "enabled": true,
      "will_retry": true,
      "next_retry_at": "2026-04-02T10:00:00Z"
    }
  }
}

payment.rescue_retry (SEPA)

Sent when a SEPA retry is being attempted.

{
  "id": "evt_def456",
  "type": "payment.rescue_retry",
  "created_at": "2026-04-02T10:00:00Z",
  "data": {
    "payment": "pay_xyz789",
    "customer": "cus_abc123",
    "payment_method_type": "sepa_debit",
    "retry_number": 1,
    "previous_r_code": "AM04",
    "debit_date": "2026-04-07",
    "prenotification_sent": true,
    "retry_strategy": {
      "r_code_category": "insufficient_funds",
      "timing_reason": "payday_alignment"
    }
  }
}

payment.rescue_succeeded (SEPA)

Sent when a SEPA payment is successfully recovered.

{
  "id": "evt_ghi789",
  "type": "payment.rescue_succeeded",
  "created_at": "2026-04-10T14:30:00Z",
  "data": {
    "payment": "pay_xyz789",
    "customer": "cus_abc123",
    "amount": 4999,
    "currency": "EUR",
    "retry_number": 1,
    "total_attempts": 2,
    "days_to_recover": 15,
    "settlement_date": "2026-04-10"
  }
}

sepa_mandate.requires_attention

Sent when a mandate issue is detected.

{
  "id": "evt_jkl012",
  "type": "sepa_mandate.requires_attention",
  "created_at": "2026-03-28T09:20:00Z",
  "data": {
    "mandate": "md_abc123",
    "customer": "cus_abc123",
    "issue": "mandate_cancelled",
    "r_code": "MD01",
    "triggered_by_payment": "pay_xyz789",
    "recommendation": "Contact customer to set up a new mandate"
  }
}

Handling R-Transaction Types

Insufficient Funds (AM04)

The most common return reason, often resolved with proper timing.

// Configure payday-optimized retries for AM04
const payment = await plexy.payments.create({
  amount: 4999,
  currency: 'EUR',
  customer: 'cus_abc123',
  payment_method: 'pm_sepa_debit_xyz789',
  auto_rescue: {
    enabled: true,
    r_code_strategies: {
      AM04: {
        retry: true,
        // Retry on dates aligned with common paydays in EU
        // 1st: Month start, 15th: Mid-month, 25th: End of month
        schedule_days: [5, 16, 26],
        max_retries: 3,
        notify_customer_after_attempt: 1,
      },
    },
  },
});

Account Closed (AC04) or Incorrect (AC01)

Permanent issues requiring new account details.

app.post('/webhooks/plexy', async (req, res) => {
  const event = verifyWebhook(req);

  if (event.type === 'payment.sepa_return_received') {
    const { r_transaction, customer } = event.data;

    if (['AC01', 'AC04'].includes(r_transaction.code)) {
      // Deactivate the payment method
      await plexy.paymentMethods.update(event.data.payment_method, {
        active: false,
        deactivation_reason: r_transaction.reason,
      });

      // Contact customer for new account details
      await sendEmail(customer, 'sepa_account_invalid', {
        reason: r_transaction.reason,
        update_url: 'https://yoursite.com/update-payment',
      });
    }
  }

  res.status(200).send('OK');
});

Mandate Issues (MD01, MD06)

Mandate-related returns require special handling.

app.post('/webhooks/plexy', async (req, res) => {
  const event = verifyWebhook(req);

  if (event.type === 'payment.sepa_return_received') {
    const { r_transaction, mandate, customer } = event.data;

    if (r_transaction.code === 'MD01') {
      // Mandate not found or cancelled
      await plexy.mandates.update(mandate, {
        status: 'cancelled',
        cancellation_reason: 'r_transaction_md01',
      });

      await sendEmail(customer, 'mandate_cancelled', {
        setup_url: 'https://yoursite.com/setup-mandate',
      });
    }

    if (r_transaction.code === 'MD06') {
      // Customer requested refund - process it
      await plexy.refunds.create({
        payment: event.data.payment,
        reason: 'customer_request_via_bank',
      });

      // Note: Consider if subscription should be cancelled
      await flagForReview(customer, 'sepa_refund_requested');
    }
  }

  res.status(200).send('OK');
});

SEPA Core vs B2B

Auto Rescue handles both SEPA schemes:

Aspect	SEPA Core	SEPA B2B
Refund right	8 weeks (no questions)	None
Mandate verification	Optional	Required
Minimum lead time	D-2	D-1
Retry approach	More conservative	Can be more aggressive

Configure by Scheme

const payment = await plexy.payments.create({
  amount: 4999,
  currency: 'EUR',
  customer: 'cus_abc123',
  payment_method: 'pm_sepa_debit_xyz789',
  payment_method_options: {
    sepa_debit: {
      mandate: 'md_abc123',
      scheme: 'b2b', // or 'core'
    },
  },
  auto_rescue: {
    enabled: true,
    sepa_options: {
      scheme_specific: {
        core: {
          max_retries: 2, // Conservative for Core (refund risk)
          retry_window_days: 14,
        },
        b2b: {
          max_retries: 3, // More aggressive for B2B
          retry_window_days: 21,
        },
      },
    },
  },
});

Pre-Notification Management

SEPA requires customer notification before debits:

// Configure pre-notification for retries
const payment = await plexy.payments.create({
  amount: 4999,
  currency: 'EUR',
  customer: 'cus_abc123',
  payment_method: 'pm_sepa_debit_xyz789',
  auto_rescue: {
    enabled: true,
    sepa_options: {
      send_prenotification: true,
      prenotification_days: 5, // 5 days before debit
      prenotification_template: 'retry_notification',
    },
  },
});

Pre-Notification Webhook

{
  "id": "evt_mno345",
  "type": "sepa_prenotification.sent",
  "created_at": "2026-03-27T10:00:00Z",
  "data": {
    "payment": "pay_xyz789",
    "customer": "cus_abc123",
    "amount": 4999,
    "currency": "EUR",
    "debit_date": "2026-04-01",
    "is_retry": true,
    "retry_number": 1,
    "notification_type": "email"
  }
}

Best Practices

Timing Around Paydays

In Europe, common paydays include:

End of month (25th-31st)
Mid-month (15th)
Beginning of month (1st-5th)

// Optimal retry schedule for EU paydays
auto_rescue: {
  enabled: true,
  sepa_options: {
    // Schedule debits for 2-3 days after typical paydays
    preferred_debit_days: [3, 17, 28],
  },
}

Monitor Mandate Health

Track mandate-related returns:

// Fetch mandate analytics
const mandateHealth = await plexy.analytics.getMandateHealth({
  start_date: '2026-01-01',
  end_date: '2026-03-31',
});

// Response includes:
// {
//   "total_mandates": 5234,
//   "active": 5012,
//   "cancelled_by_customer": 89,
//   "cancelled_by_r_transaction": 133,
//   "r_transaction_breakdown": {
//     "MD01": 98,
//     "MD06": 35
//   }
// }

Respect Customer Requests

When you receive MD06 (refund request by customer), consider:

Processing the refund promptly
Reviewing the customer's subscription status
Reaching out to understand the reason
Potentially pausing future debits

if (r_code === 'MD06') {
  // Customer went to their bank for a refund - take it seriously
  await pauseSubscription(customer);
  await sendEmail(customer, 'subscription_paused', {
    reason: 'bank_refund_request',
    contact_us: true,
  });
}

Know When to Stop

Unlike cards, SEPA retries should be more conservative:

Factor	Recommendation
Max retries	2-3 (not 4-5 like cards)
Window	14-21 days
After MD01/MD06	Never retry
Multiple AM04s	Consider contacting customer

Next Steps

Auto Rescue Overview - General Auto Rescue concepts
Auto Rescue for Cards - Card-specific strategies
SEPA Direct Debit Guide - Full SEPA integration details

Auto Rescue for SEPA

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