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A Complete Guide to SEPA Transfers

March 18, 2024

If your company is based in Europe, you might have heard of SEPA (Single Euro Payments Area) 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 Euro payment made within the EU and a number of non-EU countries. The SEPA (Single Euro Payments Area) network allows these countries 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 harmonizing cross-border 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).

What is a SEPA Bank Account?

You don’t need a specific SEPA bank account to make SEPA payments. A SEPA bank account can be a traditional bank account or an online-only bank account. Your traditional bank account should already cover SEPA bank transfers if it is located within SEPA-supported countries.

If you are based in a SEPA-supported country outside of the EU, you can double-check which banks or financial institutions offer SEPA before opening an account with that bank or making a SEPA 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.

Which Countries are Included?

As long as you have a Euro bank account, you can make SEPA payments.

SEPA has 36 member-states, which include 27 European Union countries, 4 European Free Trade Association countries (Liechtenstein, Norway, Iceland, and Switzerland), four 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.

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

Types of SEPA Bank Transfers: Credit Transfer/ Instant Credit/ Direct Debit

SEPA offers three types of bank transfers: Direct Debit, Credit Transfer, and Instant Credit. Let’s get into how these types of SEPA payment options work and what they’re best suited for.

SEPA Credit Transfer

The SEPA Credit Transfer (SCT) works just like any other credit transfer, though it needs IBAN (International Bank Account Number) 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. SCT is normally used for one-off transfers.

SEPA Instant Credit

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, connected via the SEPA Instant scheme, from the payer’s bank to the recipient’s 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.

SEPA Direct Debit

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 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 Bank 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 a company to expand its 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 Bank 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 SEPA transfer time.

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 SEPA Bank Transfers Cost?

SEPA transfers made from a non-Euro bank account are subjected to currency conversion fees. It’s also worth noting that SEPA payments made to/from a non-EU country (like the UK) may incur some additional bank charges.

Are There Limits for SEPA Bank Transfers?

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.

SEPA Payments and More Through Duck Creek Payments

Through banks and PSPs, Duck Creek Payments can connect your company to SEPA so you can expand your business in Europe. Cashless Euro payments, cross-border Euro payments, SEPA instant credit, SEPA credit transfer, and SEPA direct debit: all this and more is possible by working with Duck Creek Payments.

Our platform offers integration-free connectivity to the whole payment ecosystem and allows you to partner with the payment service providers that best suit your company’s needs.

No other payment platform offers ALL these insurer benefits in one solution:

  • Send multiple instructions through a single integration (and in doing so, reduce IT development and maintenance costs
  • Reduce time to market for new payment capabilities and products
  • Offer any payment method, automate payment processes and maximize payment options to suit business and clients’ needs
  • Offer unified reporting and payment analytics

Duck Creek Payments is the only payment solution designed for the global insurance sector, and while there are various global payment processing platforms (Stripe, World Pay), they only facilitate transactions, taking a percentage of the volume. 

Duck Creek Payments is unique in that it takes a holistic approach; its Software-as-a-Service product supports CFOs/COOs, helping businesses make operational and capital expenditure savings.

Get in touch to find out more!

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Bruno Soares
Senior Product Director
Bruno Soares is Senior Product Director Duck Creek Technologies, renowned for his passion for the impossible and his ability to build high-performing teams. In his two-decade entrepreneurial journey, Bruno has made a mark in Digital Banking and Payments, e-commerce, Interactive Television, and Aeronautics industries, through hands-on product management. Bruno’s commitment to innovation and talent development is evident in his track record of building teams that excel in tackling challenges. As one of the former Executive Leaders of Imburse AG, an award-winning SaaS Payments middleware for Enterprise, Bruno orchestrated a successful exit via a strategic sale to Duck Creek Technologies, where he continues to bring a wealth of experience and a relentless pursuit of excellence.