Single Euro Payments Area

The Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union for simplification of bank transfers denominated in euro. As of 2019, there were 36 members in SEPA,[2] consisting of the 28 member states of the European Union, the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland)[3][4][5]. Some countries participate in the technical schemes: Andorra,[6] Monaco, San Marino, and Vatican City.[3]

Single Euro Payments Area

Member states
4,854,382 km2 (1,874,287 sq mi)
 2019 estimate
119/km2 (308.2/sq mi)
GDP (PPP)estimate
 Per capita
$43,101 (2018)[1]
GDP (nominal)estimate
 Per capita
$38,420 (2018)[1]
CurrencyEuro (€)
Time zoneUTC±0 to +2 (UTC, CET, EET)
 Summer (DST)
UTC+1 to +3 (WEST, CEST, EEST)


The aim of SEPA is to improve the efficiency of cross-border payments and turn the previously fragmented national markets for euro payments into a single domestic one. SEPA enables customers to make cashless euro payments to any account located anywhere in the area, using a single bank account and a single set of payment instruments.[7] People who have a bank account in a eurozone country, will be able to use it to receive salaries and make payments all over the eurozone, for example when they take a job in a new country.

The project includes the development of common financial instruments, standards, procedures, and infrastructure to enable economies of scale. This should, in turn, reduce the overall cost to the European economy of moving capital around the region (estimated as 2-3% of total GDP).[8]

SEPA does not cover payments in currencies other than the euro. This means that domestic payments in SEPA countries not using the euro will continue to use local schemes, but cross border payments will use SEPA and euro against eurozone countries.


There are two milestones in the establishment of SEPA:

  • Pan-European payment instruments for credit transfers began on 28 January 2008; direct debits and debit cards became available later
  • By the end of 2010, all present national payment infrastructures and payment processors were expected to be in full competition to increase efficiency through consolidation and economies of scale.

For direct debits, the first milestone was missed due to a delay in the implementation of enabling legislation (the Payment Services Directive or PSD) in the European Parliament. Direct debits became available in November 2009, which put time pressure on the second milestone.[9]

The European Commission has established the legal foundation through the PSD. The commercial and technical frameworks for payment instruments were developed by the European Payments Council (EPC), made up of European banks. The EPC is committed to delivering three pan-European payment instruments:

  • Credit transfers: SCT – SEPA Credit Transfer
  • Direct debits: SDD – SEPA Direct Debit. Banks began offering this service on 2 November 2009.[10]
  • Cards: SEPA Cards Framework

To provide end-to-end straight-through processing (STP) for SEPA-clearing, the EPC committed to delivering technical validation subsets of ISO 20022. Whereas bank-to-bank messages (pacs) are mandatory for use, customer-to-bank payment initialization (PAIN) message types are not; however, they are strongly recommended. Because there is room for interpretation, it is expected that several PAIN specifications will be published in SEPA countries.

Businesses, merchants, consumers and governments are also interested in the development of SEPA. The European Associations of Corporate Treasurers (EACT), TWIST, the European Central Bank, the European Commission, the European Payments Council, the European Automated Clearing House Association (EACHA), payments processors and pan-European banking associations – European Banking Federation (EBF), European Association of Co-operative Banks (EACB) and the European Savings Banks Group (ESBG) – are playing an active role in defining the services which SEPA will deliver.

Since January 2008, banks have been switching customers to the new payment instruments. By 2010, the majority were expected to be on the SEPA framework. As a result, banks throughout the SEPA area (not just the Eurozone) need to invest in technology with the capacity to support SEPA payment instruments.

SEPA clearance is based on the International Bank Account Numbers (IBAN). Domestic euro transactions are routed by IBAN; earlier national-designation schemes were abolished by February 2014, providing uniform access to the new payment instruments. Since February 2016 Eurozone consumers must drop BIC sorting information for SEPA transactions; it is derived from the IBAN for all banks in the SEPA area.

An instant 24/7/365 payment scheme named SCT Inst went live on November 21, 2017 allowing instant payment 24 hours a day and 365 days a year.[11] The participating banks will handle the user interface and security, like for existing SEPA payments, e.g. web sites and mobile apps.[12]

SEPA covers predominantly normal bank transfers. Payment methods which have additional optional features or services, such as mobile phone or smart card payment systems, are not directly covered.[13] However, the instant SEPA payment scheme facilitates payment products also on smart devices.[14]


The different functionalities provided for by SEPA are divided into separate payment schemes, detailed below.

SEPA Credit Transfer

SEPA Credit Transfer (SCT) allows for the transfer of funds from one bank account to another. SEPA clearing rules require that payments made before the cutoff point on a working day, be credited to the recipients account within one working day.

SEPA Instant Credit Transfer

SEPA Instant Credit Transfer (SCT Inst), also called SEPA Instant Payment,[15] provides for instant crediting of a payees (less than ten seconds, initially, with a maximum of twenty seconds in exceptional circumstances).[16]

This scheme was launched in November 2017, and was at that time operational for end customers in eight euro zone countries, and is expected soon to be available in most euro zone countries and potentially in all SEPA countries.[17]

SEPA Direct Debit

Direct debit functionality is provided by two separate schemes. The basic scheme, Core SDD, was launched on 2 November 2009,[10] and is primarily targeted at consumers. Participation by banks offering SEPA payments is compulsory.[18] In addition, there is a second scheme, B2B SDD, targeted towards business users. It requires a mandate be submitted to the bank by both the creditor and debtor. Among other differences, it does not allow the debtor to request a refund from its bank after its account has been debited. Participation in the scheme is optional.[18]


SEPA consists of 36 countries:[4]

All parts of a country are normally part of SEPA. However, the following countries have special territories which are not part of SEPA:

Jurisdictions using the euro that are not in SEPA: Akrotiri and Dhekelia, French Southern and Antarctic Lands, Kosovo, and Montenegro.[20]


SEPA guarantees that euro payments are received within a guaranteed time, and banks are not allowed to make any deductions of the amount transferred, introduced by a regulation in year 2001.[21] Banks and payment institutions still have the option of charging a credit-transfer fee of their choice for euro transfers if it is charged uniformly to all EEA participants, banks or payment institutions, domestic or foreign.[22] This is relevant for countries which do not use the euro; domestic transfers in euros by consumers are uncommon, and inflated fees might be charged. Sweden and Denmark have legislated that euro transfers shall be charged the same as transfers in their own currency; which has the effect of giving free euro ATM withdrawals, but charges for ATM withdrawals in other currencies used in the EU.

In regulation (EC) 924/2009 (the Cross-border Payments Regulation), the European Parliament mandated that charges in respect of cross-border payments in euros (of up to EUR 50,000) between EU member states shall be the same as the charges for corresponding payments within the member state.[23][24] However, the EU Regulation does not apply to all SEPA countries; the most significant difference is the inclusion of Switzerland in SEPA but not the EU. The rule of the same price applies even if the transaction is sent as an international transaction instead of a SEPA transaction (common before 2008, or if any involved bank does not support SEPA transactions). Regulation 924/2009 does not regulate charges for currency conversion so charges for non-euro transactions can still be applied (if not banned by national law).[25]

Key dates

1957 Treaty of Rome creates the European Community.
1992 Maastricht Treaty creates the euro.
1999 Introduction of the euro as an electronic currency, including introduction of the RTGS system TARGET for large-value transfers.
2000 Lisbon Strategy: Meeting creates European Financial Services Action Plan.
2001 EC Regulation 2560/2001 harmonises fees for cross-border and domestic euro transactions.[22]
2002 Introduction of Euro banknotes and coins.
2003 First Pan-European Automated Clearing House (PE-ACH) goes live; EC Regulation 2560/2001 comes into force for transactions up to €12,500.
2006 EC Regulation 2560/2001 increases ceiling on same-price euro transactions to €50,000.
2008 SEPA pan-European payment instruments become operational (parallel to domestic instruments) on 28 January[26]
2009 Payment Services Directive (PSD) enacted in national laws by November.
2010 SEPA payments become dominant form of electronic payments.
2011 SEPA payments replace national payments in the Eurozone.
2014 1 August: Single Euro Payments Area (SEPA) becomes fully operational in all Eurozone countries.[27]
2016 Since 31 October 2016, payment service providers (PSPs) in non-euro countries are only able to collect euro-denominated payments using SEPA procedures. Non-euro schemes, such as the UK's Direct Debit, will continue without change.[28]
2017 Starting 21 November 2017, instant SEPA payments of up to 15,000 euros within 10 seconds (optional participation for PSPs).[29]
2019 On 1 March 2019 Andorra and Vatican City join SEPA.


As of August 2014, 99.4% of credit transfers, 99.9% of direct debit, and 79.2% of card payments have been migrated to SEPA in the euro area.[30]

The official progress report was published in March 2013.[31]

In October 2010, the European Central Bank published its seventh progress report on SEPA.[32] The European Central Bank regards SEPA as an essential element to advance the usability and maturity of the euro.

See also


  1. "5. Report for Selected Countries and Subjects". International Monetary Fund. 17 June 2011. Retrieved 10 July 2013.
  3. Extension of the geographical scope of SEPA schemes in March 2019
  4. List of SEPA Countries
  5. ECB: SEPA countries
  6. Andorra becomes a member of the Single euro payments area (SEPA)
  7. "Solution: SEPA, the single euro payments area". European Central Bank. Archived from the original on 20 March 2008. Retrieved 28 January 2008.
  8. "Agreement reached on cross-border banking". RTÉ News. 27 March 2007. Retrieved 28 January 2008.
  9. "Joint statement by the European Commission and the European Central Bank welcoming the European Parliament's adoption of the Payment Services Directive". Europa (web portal) (Press release). European Union. 24 April 2007. Archived from the original on 19 May 2011. Retrieved 26 April 2011.
  10. EUROPA – Press Releases – Single Euro Payments Area (SEPA): cross-border direct debits now a reality EUROPA (European Union), 3 November 2009; Retrieved 4 February 2011
  11. "Successful go-live for EBA CLEARING's instant payment system RT1". 21 November 2017. Retrieved 2 September 2018.
  12. "Instant payments". Euro Retail Payments Board (ERPB).
  13. REGULATION (EU) No 260/2012 (article 1 point 3)
  14. "Instant payments (section "For consumers")". Euro Retail Payments Board (ERPB).
  15. Groenfeldt, Tom. "Payments Are Moving To Real-Time Around The World, The U.S. Plays Catch-Up". Forbes. Retrieved 7 December 2018. The use of credit cards isn’t as prevalent in Europe where retailers are using the SEPA instant payment scheme.
  17. Launch of the SEPA Instant Credit Transfer scheme
  20. "The Boundaries of SEPA-land" (PDF). Skandinaviska Enskilda Banken. 9 April 2013. Archived from the original (PDF) on 26 June 2013. Retrieved 26 June 2013.
  21. Single Euro Payments Area (SEPA) – frequently asked questions. Brussels, 31 July 2014.
  22. Regulation (EC) No 2560/2001 of the European Parliament and the Council of the European Union EUR-Lex, 19 December 2001
  23. Cross-border payments in euro: Regulation on equality of charges, European Commission European Commission, 19 September 2013
  24. Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 EUR-Lex, 9 October 2009
  25. Regulation (EC) No 924/2009 ... Frequently Asked Questions (FAQ) (see point 9)
  26. "Single Euro Payments Area kicks in, EU – European Information on Financial Services". 28 January 2008. Retrieved 26 April 2011.
  27. Vice-President Michel Barnier welcomes major milestone for the internal payments market with the migration to SEPA (Single Euro Payments Area). Brussels, 1 August 2014.
  28. "Migrating to the Single Euro Payments Area: key facts". European Central Bank. Retrieved 15 August 2016.
  30. ECB. Key figures: SEPA indicators at a glance (euro area).
  31. "Quantitative indicators" (PDF). European Central Bank. March 2013. Retrieved 26 May 2013.
  32. "Single Euro Payments Area Seventh Progress Report: Beyond Theory into Practice" (PDF). European Central Bank. October 2010. Retrieved 26 May 2013.

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