SEPA (Single Euro Payments Area) transfers are a cross-border system for making EUR transfers within the SEPA area. SEPA transfers are similar to domestic transfers despite being possible between different countries within the SEPA area. The SEPA zone includes 28 EU countries as well as Switzerland, Norway, Iceland, Andorra, Liechtenstein, San Marino, Vatican City and Monaco. Bank transfers can be made from any SEPA zone European checking account to any other account within SEPA. SEPA is a trusted and safe way to make online payments and purchases using your own online European bank.
Across the 36 countries that have subscribed to the SEPA agreement, individuals and businesses that have IBAN accounts in registered banks and financial services providers can transfer money quickly and safely, and in most cases for free. In a case where the two accounts operate in difference currency zones (e.g. UK sterling and Swiss franc) there may be some charge for currency conversion. Normal charges are the same as for transfers between accounts within the same bank, but some sending banks do levy a charge. Most banks do not levy any charges on outgoing transfers.
SEPA transfers meaning
SEPA provides for four separate transfer schemes.
- SEPA Credit Transfer (SCT) provides for the transfer of funds from one bank account to another. Rules require that payments made before the cutoff point on a working day, currently 15:00, must be credited to the recipients account by the next working day. The limit in this type of transfer is one billion euros.
- SEPA Instant Credit Transfer (SCT Inst – also called SEPA Instant Payment) provides for instant crediting of a receiving IBAN account, within ten seconds (with allowance in exceptional circumstances for 20 seconds maximum). The limit is €100,000 per transfer.
- Direct debit (Core SDD) is targeted primarily for consumers making regular payments. All banks are obliged to participate in this scheme. Both the receiver and payer are required to submit an authorization (mandate).
- B2B SDD is targeted towards business users. At the moment, participation is not mandatory. Unlike core SDD, it does not allow the payer to request a refund later than three business days after the debit date.