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What is a SEPA transfer?

Learn how SEPA transactions work and how you can use them to streamline business payments in the Eurozone and beyond. 

What is a SEPA transfer?

The Single Euro Payments Area (SEPA) was launched by the European Payments Council (EPC) in 2008 to make payments easier and more convenient for European residents and businesses. The goal was to make one payment account and one card facility seamlessly available across the region. 

SEPA transfers are easy to initiate and make it much simpler for businesses to invest and expand across Europe. In this article, we’ll explain how they work and how you can use them to streamline business payments in the Eurozone and beyond. 

What is the Single Euro Payments Area? 

In layman’s terms, SEPA is an electronic transaction system enabling cashless payments between SEPA countries in the Eurozone. The system makes cross-border payments seamless, so they work more like domestic transactions.  

After it was launched, SEPA not only standardised the cashless transaction experience but also endorsed the euro as Europe’s single currency. 

Most industry experts agree that SEPA has had a positive impact in the region. For example, SEPA payments make it easier for people to work in EU countries and businesses to integrate across member nations. 

SEPA is useful for non-European residents, too. For example, non-residents can: 

  • Make purchases directly from debit accounts while traveling in the region for work or leisure. 

  • Directly deposit payments, pay bills electronically and send money to their families. 

Which countries are in the SEPA zone? 

There are 36 Single Euro Payments Area countries: 

  • The first 27 countries are the European Union (EU) members. 

  • The next 4, Liechtenstein, Norway, Iceland and Switzerland, are from the European Free Trade Association. 

  • There also are 4 microstates, Vatican City, San Marino, Monaco and Andorra, that have special monetary arrangements with the EU. 

Despite Brexit, the UK has retained its SEPA membership, although there have been some minor changes in how transactions proceed and how the account holder’s data is maintained.


What is a SEPA payment? 

Basically, any euro transaction following the unified approach among SEPA member states is considered a SEPA transaction. SEPA transactions go through a customer’s Business Identifier Code (BIC) and International Bank Account Number (IBAN), rather than an accounting or routing number.  

SEPA payments are often compared to US Automated Clearing House (ACH) transactions. ACH is a regulated financial network that enables electronic money transfers across America. 

There are 3 types of SEPA bank transfers, which we’ll dive into next. 

1. SEPA Credit Transfer (SCT) 

These are usually one-time transfers, sending funds from one account to another using the BIC and IBAN. 

2. SEPA Instant Credit Transfer (SCT Inst) 

SEPA Instant Credit Transfers (SCT Insts) route funds from the sender’s bank account directly to the recipient’s account, bypassing intermediaries. SCT Insts are available 24/7, all year round. They take as little as 10 seconds, with the only condition being that both parties must be registered SEPA members. This method is ideal for customer-facing businesses. 

3. SEPA Direct Debit Transfer (Core SDD or B2B SDD) 

SEPA direct debit transfers are essentially pull transactions, which means they are initiated by the payee and request a certain amount from the sender. These transfers are used for recurring payments, like subscriptions or loan repayments. 

There are two types of SEPA Direct Debit Transfers: 

  • Core SDD: Banks included in the SEPA scheme have to offer this form of payment to everyone. 

  • B2B SDD: These are optional types of payments that banks may choose to provide between two businesses. It can be in a bank’s best interests to offer B2B SDD payment options because they help boost revenues and attract new business customers.  

What is a Non-SEPA transfer? 

All euro transactions outside SEPA member nations – and transactions with any other foreign currency in Europe – are non-SEPA payments. Since non-SEPA transfers tend to be more expensive and take longer to settle, initiators and payees need to keep track of them. Plus, they may go through multiple intermediaries, further raising transaction costs. 

How long does a SEPA transfer take? 

Different SEPA transfers have different settlement timeframes: 

  • SCTs takes 1 business day. 

  • SCT Insts go through within 10 seconds. 

  • Core SDD transfers take at least 2 business days. 

  • B2B SDD transfers take at least 3 business days. 

While most SEPA transfers are free, certain banks charge a fee to receive SEPA payments. Before proceeding with a transaction, it’s best to confirm whether your bank – or the financial institution you plan to go through – charges a fee

What are the SEPA transfer limits? 

Different SEPA transfers have different transfer limits: 

  • The maximum amount you can transfer via a single SCT Inst instruction is €10,000,000. 

  • For SCTs, the transfer limit is €999,999,999.99. 

  • Core SDD and B2B SDD transfers do not have a monetary limit because they’re governed by an agreement of recurring payments between the payer and payee. 

Easier SEPA transfers with Interpolation 

You don’t need a corporate bank account to take advantage of SEPA payments. That's a good thing, because traditional bank accounts sometimes charge additional fees for cross-border transactions, which can add up quickly.  

To save time and money, why not consider an alternative bank account with a unique IBAN? Interpolitan Money can offer you just this – including all the benefits of a corporate account, plus dedicated services. 

If you already have a corporate account elsewhere, opening an Interpolitan alternative bank account can help reduce your time to market in new regions, which can be convenient for your customers. You’ll be able to transact in over 55 currencies across the world, track analytics, and much more. Best of all, because Interpolitan is regulated by the FCA, you can rest assured that every transaction is compliant. 

Interpolitan delivers flexible and comprehensive alternative banking solutions by blending cutting-edge technology with personalised service. Learn more about us, or open an account today

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