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).
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 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 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:
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 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 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 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 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|
|Simple||0.00 EUR||0.00 EUR||0.00 EUR|
|Classic||0.00 EUR||0.00 EUR||0.00 EUR|
|Premium||0.00 EUR||0.00 EUR||0.00 EUR|
|Isle of Man||IMP|