A complete guide to SEPA Transfers

If your company is based in Europe, you might have heard of SEPA before. Created in 2008 by the European Union, SEPA is a widely popular payment scheme aimed at making international payments in Euros as easy and fast as domestic payments.


What is a SEPA bank transfer?

A SEPA bank transfer is a cross-border payment made within the Eurozone. The SEPA (Single Euro Payments Area) network allows countries that use the Euro currency to make international payments easily and inexpensively, just like a domestic payment. Some of the SEPA member-states don’t use the Euro currency, however, they have special agreements with the European Union so they can continue to benefit from this payment scheme.

Aside from harmonising international payments, SEPA also creates a single market for payment services, generating more competitiveness in this sector. SEPA is regulated and managed by the European Commission and the European Central Bank (ECB).


Who can get a SEPA bank account?

You don’t need a specific SEPA bank account to make SEPA payments. Your traditional bank account should already cover SEPA bank transfers if it is located within the Eurozone area. If you are based in a non-Eurozone country, you can double check which banks or financial institutions offer SEPA before opening an account with that bank or making a payment. In order to make a SEPA transfer, the transaction needs to be in Euro currency, otherwise you will have to use your national payment system.

SEPA payment system in Europe

Which countries are included?

SEPA has 36 member-states, which include 27 European Union countries, 4 European Free Trade Association countries (Liechtenstein, Norway, Iceland, and Switzerland), 4 microstates (Vatican City, San Marino, Monaco, Andorra) and the UK. Though not all of these countries are part of the European Union or use the Euro currency, they have special monetary arrangements set in place to be able to use SEPA transfers. As long as you have an Euro bank account, you can make SEPA payments.

The full list of member-states is: Austria, Belgium, United Kingdom, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Republic of Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Spain and Sweden, Switzerland, Monaco, Norway, Liechtenstein and Iceland.


Types of SEPA bank transfers: Direct Debit/Credit/Instant Credit

SEPA offers three types of bank transfers: Direct Debit, Credit Transfer and Instant Credit. The SEPA Credit Transfer works just like any other credit transfer, though you need to add the IBAN and occasionally the BIC (Bank Identifier Code) of both the payer and recipient. These numbers are used to authenticate the payment and to ensure that the money arrives in the right bank account.

SEPA Instant Credit is, essentially, a much faster version of a Credit Transfer. With Instant Credit, the payment arrives in the recipient’s bank account within just a few seconds due to direct routing from the Issuing bank to the Acquiring bank. This payment is also available 24/7, every day of the year, so money transfers won’t be affected by weekends and national holidays. Before you request a SEPA Instant Credit payment, you need to check that both your bank account and the recipient’s bank account accept this type of payment, otherwise you won’t be able to make it.

Lastly, SEPA Direct Debit is most commonly used for Recurring Payments such as monthly bills or subscriptions, in which the recipient (a company) has to request the payer (a customer) for the payment. As opposed to credit transfers, SEPA Direct Debit is a pull-payment, as the funds need to be requested by the recipient first. The payer must then sign a mandate (contract) to allow the recurring withdrawal of money from their account. The SEPA Direct Debit is divided into Core Direct Debit, offered to all individuals, and B2B Direct Debit, offered exclusively to businesses. It isn’t mandatory for banks to offer the B2B Direct Debit to their customers, so you need to check if your bank provides this service before setting up a business-to-business direct debit transaction.

How does a SEPA transfer work? Pros and Cons:

A SEPA transfer works just like a domestic transfer. There are various advantages for businesses to use SEPA, including the flexibility to take payments from anywhere in the SEPA zone. This allows company to expand their services to other countries and reach different customer bases. It is also free, fast and secure.

The only downside of using SEPA is that it is only available to its 36 member states and within Europe, so it isn’t a viable solution for companies based in other continents, nor does it allow European countries to take payments from non-SEPA countries across the globe.


How long does a SEPA transfer take?

SEPA Credit Transfers take one business day to be processed and settled, so if you transferred money to any other SEPA country, it should arrive in the recipient’s bank account in one day. National bank holidays and weekends might affect the waiting times.

SEPA Instant Credit, as the name suggests, is an instant payment that is processed and settled within just a few seconds- much like any domestic payment. National holidays and weekends won’t affect the waiting times.

SEPA Core Direct Debit takes two business days to be processed, whilst B2B Direct Debit takes three business days. They might take longer to reach the recipient’s account should there be weekends and national holidays in between the process.

How much do transfers cost?

There are no fees for making or taking SEPA payments, so in most cases it is just like making a domestic transfer. If you are making a SEPA payment from a non-Euro country, however, you will have to pay a currency conversion fee, so that the money can be converted to Euros before the payment is processed. The cost of this fee depends on the latest exchange rate and your own bank.

SEPA payment system in Europe

Are there transfer limits?

With SEPA Credit Transfers, the transfer limit is €999,999,999.99 (one cent less than a billion euros). Instant Credit allows you to transfer a maximum of €100,000 in one single payment, whilst Direct Debits depend on the agreement you made with the payer- they don’t have a transfer limit.

Imburse can connect your company to SEPA so you can expand your business in Europe. Our platform offers integration-free connectivity to the whole payment ecosystem and allows you to partner with the payment providers that best suit your company’s needs. Reach out to us by clicking the button below if you would like to know more about our solution.




Mariana Marques

Mariana is a content writer at Imburse, specialising in Finance and Technology topics.

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