Single Euro Payments Area (SEPA)

The idea behind the Single Euro Payments Area (SEPA) is to use uniform procedures and standards for euro payments across Europe. The SEPA territory currently comprises 36 European countries.


After the successful introduction of euro cash, creating a single market for cashless euro payments was the logical next step. The objective of the SEPA initiative was to harmonize Europe’s fragmented retail payment infrastructure and make all cashless payments as fast, safe and efficient as national payments.

An important prerequisite for the smooth processing of cashless payments are harmonized formats, systems and rules. Currently, however, these differ from country to country. Implementing identical SEPA formats for credit transfers, direct debits and card payments has therefore been high on the SEPA agenda. In a nutshell, any distinction between cross-border and national payments will be obsolete in SEPA.

SEPA enables customers to make cashless euro payments easy, efficient and safe from just one account by using harmonized payment instruments.

To this end, the European Parliament and the Council passed a regulation (Regulation (EU) No 260/2012, SEPA Regulation) that sets a single migration deadline for euro area countries, namely August 2014, to replace the existing national credit transfer and direct debit schemes with the new SEPA schemes.

In line with the SEPA Regulation, the following bank account and bank identification data are required for payment transactions:

  • IBAN (International Bank Account Number) and
  • BIC (Business Identifier Code)

Since February 1, 2016, cross-border payment transactions will no longer require statement of the BIC (in addition to the IBAN).

Apart from the EU, SEPA also covers the EFTA countries Iceland, Liechtenstein, Norway and Switzerland as well as Andorra, Monaco, San Marino and Vatican City.

Advantages of SEPA

  • Given the harmonized SEPA standards, consumers and businesses are able to process all their payments from one single account held at any bank in SEPA. This one-stop solution allows businesses to centralize their payables and receivables across Europe while reducing the number of bank connections and streamlining liquidity management.
  • Moreover, the processing time for credit transfers has been reduced. As a consequence, as of 2012, euro amounts that are transferred electronically across the EU are at the receiver’s disposal after a maximum processing time of one bank business day. For transfers made by using conventional paper credit transfer forms, the maximum processing time is two bank business days. SEPA Instant Payments will reduce the processing time for credit transfers ot a few seconds.
  • SEPA direct debit schemes for euro payments were launched in November 2009. They facilitate payment of, for example, invoices from foreign mail order businesses or subscriptions to foreign newspapers.
  • As the exact due date is stated in the SEPA direct debit, customers will know exactly when their account is debited, which allows for more efficient cash and liquidity management.
  • SEPA grants additional rights to account holders (i.e. payers) to protect their accounts against direct debit fraud. Payers may e.g. limit direct debit collection to a certain amount or block their accounts for any direct debits to a specific list of payees.
  • Independent of the transaction amount, the charges levied on cross-border credit transfers and direct debits within the EU must be equal to those levied on comparable domestic transactions. Statement of the IBAN are mandatory, and the respective amount must be stated in euro. Moreover, bank fees are to be shared by payer and payee. Important: This does not apply to payments to accounts in Andorra, Monaco, San Marino, Switzerland or Vatican City.
  • Debit cards can be used across Europe for cash withdrawals at cash machines and for payments in shops and Restaurants.

(Use of the SEPA mark is under license from the European Payments Council AISBL.)