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Questions & answers on payments

How long can a transfer take?

When the EU Payment Services Directive was transposed into German law, various provisions, including provisions on the execution times for transfers, were revised in the German Civil Code (Bürgerliches GesetzbuchBGB). Banks and e-money institutions in particular fall under the term “payment service provider”. Under section 675s of the BGB, the following time limits have been applicable since 1 January 2012 for the execution of transfer orders by the payment service providers of customers making transfers:

  • 1 business day for transfers in euro within the EEA,
  • 2 business days for transfers in euro that are ordered using a (paper-based) payment form,
  • 4 business days for transfers within the EEA that are not made in euro,
  • 5 business days for transfers that are not in euro and that are ordered using a (paper-based) payment form
  • There are no time limits for transfers outside the EEA.

The payment service provider of the customer making the transfer order must ensure that the transfer amount is received by the payment service provider of the payment recipient in due time. In principle, the payment service provider of the recipient is required to credit the transferred amount to the recipient’s account without undue delay.

As a rule, there may be no deviations from the deadlines above to the customer's disadvantage (section 675e (1) of the BGB; for exceptions, see section 675e (2) sentence 2, section 675e (3) and (4) of the BGB).

Business days are key for determining the time limits for credit transfers. These are the days on which all those involved in the execution of the transfer are carrying out the business that is needed for this (section 675n of the BGB). Saturdays, Sundays, public holidays and days on which banks are not open for business in Germany (such as Christmas Eve or New Year’s Eve) are not business days. Days that are not considered business days are therefore not taken into account when determining the time limits for transfers. The period in which a transfer must be executed generally begins on the day on which the customer’s payment order reaches their payment service provider. However, if the payment order does not reach the payment service provider on a business day, the payment order is considered received on the following business day.

Example for transfers in euro within the EEA: The customer asks their payment service provider to make a transfer on a Friday. The payment service provider must receive the transfer by Monday and not by Saturday. For transfers in euro made on paper, the transfer must be executed on the Tuesday.

Payment service providers and their customers may also agree on a point in time after which incoming payment orders cannot be executed on the same day (cut-off time). This applies irrespective of whether the payment order was issued online or on paper. These payment orders are treated as if they had been received on the following banking day (section 675n (1) sentence 3 of the BGB). The majority of payment service providers have made use of this and have set out a cut-off time in their terms and conditions or special terms for payment transactions. In most cases, the cut-off time is between 5:00 p.m. and 8:00 p.m.

This is why several days may pass between the moment the transfer is ordered and the moment the recipient receives the money on their account in the case of transfer orders issued before the start of the weekend or public holidays without going beyond the statutory period for the execution of transfers.

Example for transfers in euro within the EEA: The customer instructs their payment service provider to execute a transfer on a Thursday evening after the cut-off time. The payment service provider must receive the transfer by Monday and not by Saturday.

It is possible for a transfer to be delayed. The customer may request their payment service provider to demand that the recipient’s payment service provider credits the payment amount to the recipient’s account, as if the transfer had been duly executed. The customer may be entitled to further compensation for losses resulting from the delay. However, payment service providers may limit the amount up to which they are liable to EUR 12,500 for losses resulting from delays in their terms and conditions. This possibility to limit liability does not apply if the payment service provider acts deliberately or with gross negligence. Whether claims for damages can indeed be asserted is to be assessed on a case-by-case basis. Consumers can contact theof the dispute resolution entities associations concerned.

For information on the crediting of amounts transferred to a recipient’s account, please consult "With what value date is my bank required to credit incoming transfers?"

What is a SEPA direct debit?

SEPA is the abbreviation for Single Euro Payments Area. It is a project aimed at harmonising cashless payments. 28 EU Member States, the three remaining states of the European Economic Area (Iceland, Norway and Liechtenstein) and Switzerland, Monaco and San Marino are all part of the SEPA scheme.

In the SEPA area, EU-wide rules apply to direct debits, and the national laws of the SEPA member countries for direct debits have been harmonised across Europe.

Direct debits involve cashless payments where the payee (creditor) instructs their bank to debit an amount from the account of the payer (debtor). The particularity here is that the payment process is not triggered by the payer but by the payee. The debtor must then authorise the creditor to collect the direct debit payment.

There are two types of SEPA direct debits: SEPA core direct debits and SEPA business-to-business direct debits. While SEPA core direct debits are used by consumers, SEPA business-to-business direct debits are used by businesses (non-consumers) only.

Anyone who wishes to collect funds from an account via SEPA direct debit needs the payer’s approval in the form of a SEPA direct debit mandate. In this context, the consumer pre-authorises the direct debit in writing, thereby authorising their bank to execute the direct debit. In the case of SEPA direct debit mandates, the payee must refer to a creditor identifier. A creditor identifier is a unique reference that is not linked to an account. It is valid across the EU and additionally identifies the payee as the direct debit payment recipient.

What is the time limit for cancelling a payment order?

With a payment order, you can instruct your bank to make various payments from your account.

Consumers can cancel a SEPA core direct debit mandate by informing their bank or the payee about the cancellation. If you contact your bank, the cancellation will be effective from the business day following the point in time of receipt of the cancellation. Once a direct debit mandate is cancelled (this should ideally be declared in text form), subsequent payments are no longer authorised; direct debit payments that have already been made are to be reimbursed. It is therefore important that either the payee or the bank receives the cancellation by the end of the business day prior to the due date (section 675p (2) of the German Civil Code (Bürgerliches GesetzbuchBGB)).

In the case of SEPA business-to-business direct debits, which are exclusively limited to transactions between business clients, the payer does not have the right to cancel payment orders. In other words, it is not possible to cancel a direct debit payment made from the payer’s account in such cases.

In principle, a transfer order cannot be cancelled once it has been received by the bank (section 675p (1) of the BGB).

But if the bank and the consumer have agreed on a specific date for executing the transfer (e.g. standing orders), the consumer may cancel the payment order by the end of the business day prior to the agreed date (section 675p (3) of the BGB).

A payment order may be revoked after these dates only if this has been agreed beforehand. In the cases set out in section 675p (2) of the BGB, payment orders may only be revoked with the consent of the payee (section 675p (4) of the BGB).

What is the time limit for objecting to a direct debit payment?

To execute payment orders, banks normally requires their customers’ consent in the form of an authorisation (section 675j (1) sentence 1 of the German Civil Code (Bürgerliches Gesetzbuch – BGB). Payments may be authorised in advance with a mandate or – if this has been agreed between the consumer (as the payer) and their bank – payments may be authorised afterwards with a mandate (section 675j (1) sentence 2 of the BGB). If there is no mandate, the direct debit is unauthorised.

In the case of SEPA core direct debits, consumers may request a refund up to eight weeks after the direct debit date. The debited amount is then credited back to the customer’s account. However, a refund cannot be given if the customer gave their express consent to the bank for the direct debit payment.

If a customer’s account was unlawfully debited (i.e. unauthorised or erroneously executed payments), the customer must inform their bank once they become aware of this without undue delay (section 676b (1) of the BGB). In such cases, the bank is required to reimburse the debited amount within a day after it has been informed by the customer. But if the bank has reasons to suspect that the request is a case of fraud, it may refuse to refund the amount (section 675u of the BGB). Unauthorised or erroneously executed direct debit payments are not refunded if the customer does not request the refund within 13 months after the direct debit date (section 676b (2) of the BGB). However, this period only begins once the customer has received the information to be provided with direct debits under sections 7, 10 or 14 of Article 248 of the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche – EGBGB). The purpose of this information is to ensure that all payment orders can be reliably identified.

Why am I not permitted to use the equivalent value of a submitted cheque immediately?

Normally, a cheque amount is credited to the account of the person submitting it subject to the reservation of the cheque being honoured (indicated on the account statement by the addition of "e.V." or "Eingang vorbehalten" (subject to collection).

A credit entry subject to this reservation can be cancelled by way of chargeback if the cheque, rightly or wrongly, is not honoured. It is only when the equivalent value has been collected that the bank is under an obligation to make the amount of the cheque available to the party having submitted it and that such party has a "claim under the credited amount".

In this regard most banks provide for a "blocking period" exceeding the already applicable value dates (see question "With what value date is my bank required to credit cheques submitted to it?"). The purpose of the "blocking period" is to ensure that the customer can use the cheque’s equivalent value only when it is certain that the cheque has actually been honoured by the issuing party’s bank. The credit institution instructed to collect the amount may assume this to be the case only if a certain period has elapsed during which it has not received any notification that the cheque has not been honoured. Depending on the path taken by the cheque, this period may be as much as 10 business days.

In terms of interest accrued, the "blocking period" does not result in any disadvantages for the customer since the value date alone is decisive for the applicable interest.

With what value date is my bank required to credit incoming transfers?

The value applied is the value on the date when the amount has reached the customer’s bank (section 675t (1) of the German Civil Code (Bürgerliches GesetzbuchBGB)). This applies even if the amount has been credited only subsequently – for example due to disruptions in data processing.

As a rule, the bank may not depart from this rule to the detriment of the customer (section 675e (1) BGB); for exceptions see section 675e (2) sentence 2 and (3) BGB.

With what value date is my bank required to credit cheques submitted to it?

A value date period of three business days is permissible for domestic cheques and five days for foreign cheques (judgment of the Federal Court of Justice (Bundesgerichtshof) of 6 May 1997 – case ref. XI ZR 208/96).