SEPA Payments Explained

6 August 2020

Single Euro Payments Area (SEPA) is an initiative of the European Union aimed to ensure that customers can make cashless Euro payments to anywhere within SEPA area in a fast, safe and efficient way, just like national payments. SEPA plays fundamental role in improving efficiency of cross-border payments and integrating fragmented national markets for euro payments into a single one. SEPA was introduced for credit transfers in 2008, followed by direct debits in 2009, and fully implemented by 2014 in the Euro-area (and by 2016 in non-euro area SEPA countries).

SEPA Area

Currently SEPA consists of 36 countries, namely 27 member states of the European Unions (including 19 states of the Euroarea and 8 states having their own currencies), 4 members of European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), the United Kingdom, Gibraltar, 3 British Crown Dependencies (Guernsey, Isle of Man, Jersey) and 4 micro-states with have monetary agreements with the European Union (Andorra, Monaco, San Marino and Vatican City). Montenegro adopted Euro unilaterally (which means it doesn't have a formal monetary agreement with the EU) and is not a part of SEPA.

SEPA Participants

SEPA assumes participation not only for banks, but for a broader class of payment services providers (PSPs), including banks, electronic money institutions, post office giro institutions, payment institutions, the European Central Bank and national central banks.

SEPA covers credit transfers and direct debit transactions denominated in Euros within SEPA countries where both the payer’s and the payee’s PSPs are located within the SEPA countries:

SEPA participants pay annual payment scheme participation fee which is calculated based on the number of payment schemes they would like to participate.

SEPA Payment Schemes

SEPA payment scheme means a single set of rules, practices, standards, implementation guidelines agreed between PSPs for the execution of payment transactions across the SEPA area. SEPA defines four payment schemes:

SEPA Credit Transfers (SCT)

A SEPA credit transter is non-urgent Euro payment debiting one account and crediting another account in the SEPA area. SEPA credit transfers can be one-time or recurring payments, as well as single or bulk payments. SEPA credit transfers take maximum 1 business day.

SEPA Instant Credit Transfers (SCT Inst)

SEPA instant credit transfers is a harmonized solution to the rapid payments problem. SEPA instant credit transfers are supposed to be processed within maximum 20 seconds, maximum amount which can be sent with such a transfer is 100,000 EUR. However, SCT Inst scheme participants are free to agree on a shorter execution time and a higher maximum amount.

SEPA Direct Debits (SDD Core) and SEPA Direct Debits Business-to-Business (SDD B2B)

SEPA direct debits are covered by two schemes: SDD Core, designed mainly for consumers, and SDD B2B, elaborated exclusively for businesses. In accordance with SDD schemes, the biller requests money from the payer with their prior approval and the sum is credited to the biller’s account. SEPA direct debits can be used for one-time transactions and for recurring payments. SDD schemes lay down a number of rules to improve the security level:

SEPA Benefits

SEPA brings the following benefits to the European payments landscape:

SEPA also provides several benefits for private persons:

Introduction of SEPA is also benefitial for companies:

SEPA and SWIFT Transfer Fees

SEPA offers faster and more cost-effective international transfers compared in particular to SWIFT. To emphasize the fees difference, several electronic money institutions (EMIs) offering both SEPA and SWIFT transfers are listed below. It's also indicated if an EMI participates in SEPA Instant Credit Transfer (SCT Inst) scheme.

EMI Pricing Plan SEPA Transfer Fee Is SCT Inst SWIFT Transfer Fee Fees Difference
EU 1.00 EUR 30.00 EUR 29.00 EUR
non-EU 5.00 EUR 50.00 EUR 45.00 EUR
EU 5.00 EUR 35.00 EUR 30.00 EUR
non-EU 5.00 EUR 45.00 EUR 40.00 EUR
Borderless Account 0.60 EUR 0.60 EUR 0.00 EUR
EU Resident 1.00 EUR 20.00 EUR 19.00 EUR
World Resident 1.00 EUR 20.00 EUR 19.00 EUR


List of SEPA Countries and Territories

Country Currency EU Member
ADAndorra EUEUR
ATAustria EUEUR
BEBelgium EUEUR
BGBulgaria BGBGN
HRCroatia HRHRK
CYCyprus EUEUR
CZCzech Republic CZCZK
DKDenmark DKDKK
EEEstonia EUEUR
FIFinland EUEUR
FRFrance EUEUR
DEGermany EUEUR
GIGibraltar GIGIP
GRGreece EUEUR
GGGuernsey GBGBP
HUHungary HUHUF
ISIceland ISISK
IEIreland EUEUR
IMIsle of Man IMIMP
ITItaly EUEUR
JEJersey GBGBP
LVLatvia EUEUR
LILiechtenstein CHCHF
LTLithuania EUEUR
LULuxembourg EUEUR
MTMalta EUEUR
MCMonaco EUEUR
NLNetherlands EUEUR
NONorway NONOK
PLPoland PLPLN
PTPortugal EUEUR
RORomania RORON
SMSan Marino EUEUR
SKSlovakia EUEUR
SISlovenia EUEUR
ESSpain EUEUR
SESweden SESEK
CHSwitzerland CHCHF
GBUnited Kingdom GBGBP

See Also