What is the Single Euro Payments Area (SEPA)?

The Single Euro Payments Area (SEPA) was established by the EU in 2008 to simplify euro transactions across European countries.

It aims to streamline payment processes, making foreign transactions as straightforward and low-cost as domestic ones. According to EU regulations, transfers between two SEPA countries shouldn’t incur foreign transfer fees, although some banks may charge their own fees.

What countries does SEPA cover?

SEPA covers 36 countries, including the 27 EU members, as well as the UK, Iceland, Liechtenstein, Norway, Switzerland, Monaco, and San Marino.

What is the difference between SEPA and SWIFT payments?

A commonly asked question is the difference between SEPA and SWIFT payments. While both systems facilitate cross-border payments, they differ significantly in range, efficiency, and cost.

SEPA payments

SEPA payments are mostly used for euro-denominated transactions within the SEPA area. Payments are typically received within one or two business days, providing users with a fast and cost-effective solution for euro transfers.

SWIFT payments

On the other hand, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is primarily used for sending financial instructions between banks globally. SWIFT payments support various types of transactions beyond just payments, such as securities trading or foreign exchange trading. However, SWIFT transactions usually involve higher fees and longer processing times compared to SEPA payments.

What this means for you if you’re transferring currency

If you’re sending money from one SEPA country to another, the payment should be efficient and low cost. However, payments to the SEPA area from a non-SEPA country may take longer and could incur additional fees.

At Currencies Direct, we hold SEPA-compliant accounts within the EU, allowing you to benefit from fast transfers and avoid some of the fees associated with overseas payments when you need to transfer euros.

How does SEPA work?

SEPA makes it easy and cheap to send money between European countries. It uses standard rules for different types of payments to ensure everything works smoothly across all member countries.

SEPA credit transfers (SCT)

When you transfer money within SEPA, you use a special bank account number (IBAN) and a bank code (BIC). This makes sending money simple and fast, without needing lots of extra details.

SEPA direct debits (SDD)

For recurring payments like utility bills or subscriptions, SEPA Direct Debit lets companies take money directly from your bank account. This works the same way in all SEPA countries, making it easy to handle regular payments no matter where you live in Europe.

SEPA card payments

With SEPA, you can use your debit or credit card easily in any member country. Thanks to the EMV standard (used by Europay, Mastercard, and Visa), you can make secure purchases or withdraw cash from ATMs anywhere in SEPA. However, having a multi-currency card is useful if you need to exchange currencies and want to get a strong exchange rate.

Where and how can you use a SEPA payment?

SEPA payments can be used for various financial transactions within the SEPA area, offering convenience and efficiency to both businesses and individuals.

Business-to-business (B2B) payments

SEPA enables companies to make euro transactions to suppliers or business partners abroad. Whether settling invoices or handling company payroll transactions, SEPA offers a cost-effective and safe payment solution for businesses operating within the Eurozone.

Personal payments

Individuals can use SEPA payments for various transactions, such as transferring money to family or friends in different SEPA countries or making online purchases from companies within the region. SEPA Direct Debit also helps with recurring payments, such as insurance premiums or gym memberships.

Cross-border commerce

E-commerce businesses can benefit from SEPA payments by offering it as a payment option to customers across the Eurozone.

Find out more about sending money overseas

If you want to find out more about overseas payments and currency exchange – whether you’re sending money for personal reasons or have specific business requirements – get in touch.

We offer personalised support and expert insights, along with highly competitive exchange rates, a range of transfer options, and many other features and services that make it easy to send money abroad.