Single Euro Payments Area (SEPA) Bank Transfer Payment System
SEPA (Single Euro Payments Area) is the new payment system for EU (European Union) bank to bank transfers that simplifies overseas money transfers in euro currency to be more like a domestic transfer within your own country. The payment system allows you to make payments in euros from your bank account to anywhere within the SEPA.
The introduction of the SEPA means that there is no longer any difference between domestic and overseas euro payments within the EU.
The EPC (European Payments Council) have created three SEPA sets of interbank rules, practices and standards around using SEPA payment instruments consisting of the SEPA Credit Transfer Scheme, the SEPA Direct Debit Scheme and the SEPA Direct Debit Business to Business Scheme.
SEPA is replacing a complex range of national European systems with a standardised, consistent service across all EU member countries, thereby breaking down national barriers, increasing operational efficiency and reducing the cost of moving capital around the EU.
SEPA EU Member Countries
As of 2014 the SEPA is made up of the 28 EU member countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Gibraltar, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and additionally, the 4 members countries of the EFTA (European Free Trade Association) being: Iceland, Liechtenstein, Norway and Switzerland.
SEPA Credit Transfer Scheme
If you need to make a non-urgent euro currency payment to a beneficiary within the SEPA, you may be able to do so through a SEPA credit transfer. SEPA allows you to make and receive euro currency payments in the same way that you would domestic transactions. The SEPA Credit Transfer is the simplest of the SEPA schemes and supports the transfer of funds from one payment account (the originator account) to another payment account (the beneficiary account).
The basic usage criteria and characteristics of the SEPA Credit Transfer Scheme are that the same rules and conditions apply to both domestic and overseas transfers. The originator and beneficiary account must be within the SEPA zone and identified by IBAN. The amount transferred is always in euro with a maximum of 1 billion euro. The full amount is always transferred to the beneficiary bank (with no deductions by originator bank or intermediary bank). The beneficiary account is credited no later than the next banking business day.
The scheme applies equally to all users, whether they are banks, businesses or consumers. The great advantage of SEPA transfers is that receiving banks are not allowed to make a charge to receive funds.
SEPA Direct Debit Scheme
Individuals and businesses have found it difficult to send and collect euro denominated money transfers from other EU countries because of different systems. The SEPA Direct Debit scheme aims to turn national markets for euro denominated payments into a single domestic one. It will enable customers to make euro denominated payments throughout Europe as easily and securely as domestic payments.
The SEPA Direct Debit scheme lays down a set of rules and processes for all euro denominated direct debits. As a result, there will no longer be any distinction between national and overseas euro direct debits. The same standards, timing and processes will apply to all EU SEPA countries.
SEPA – General Information
With the new system, you’ll need your IBAN (International Bank Account Number) and the BIC (Business Identifier Code) whenever you want to send or receive money in the SEPA zone.
SEPA will mean significant technological change in the European payment systems because it involves more than 300 million consumers, 15 million companies, as well as 8,000 banks, PLC’s, clearing corporations and software suppliers.
The SEPA project is strongly supported by the EC (European Commission) and the ECB (European Central Bank). The EU Payment Services Directive, and subsequent Regulations, provide the necessary legal framework for SEPA in the EU and EEA.