The Single Euro Payments Area (SEPA) is a payment integration initiative of the European Union for simplification of bank transfers denominated in euro. , there were 36 members in SEPA, consisting of the 27 member states of the European Union, the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), and the United Kingdom. Some microstates participate in the technical schemes: Andorra, Monaco, San Marino, and Vatican City.
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. However, the instant SEPA payment scheme facilitates payment products also on smart devices.
Goals
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. People who have a bank account in a eurozone country can 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. , it was estimated this could reduce the overall cost to the European economy of moving capital around the region by up to 2–3% of total GDP).
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 the euro with eurozone countries to a high degree.
The Nordic countries (other than Finland) do not use the euro and have no plans to adopt the euro. These four countries (Sweden, Denmark, Norway, and Iceland) started initiatives during 2017–2019 for simpler, faster, and cheaper cross-border payments between one another.
Schemes
The different functionalities provided by SEPA are divided into separate payment schemes.
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 recipient's account by the next working day.
SEPA Instant Credit Transfer (SCT Inst), also called SEPA Instant Payment, provides for instant crediting of a payee, the delay being less than ten seconds, initially, with a maximum of twenty seconds in exceptional circumstances. 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.
Direct debit functionality is provided by two separate schemes. The basic scheme, Core SDD, is primarily targeted at consumers and was launched on 2 November 2009. Banks offering SEPA payments are obliged to participate in this scheme. A second scheme, B2B SDD, is targeted towards business users. Banks offering SEPA payments are not obliged to participate in this scheme (participation is optional). Among the differences with respect to Core SDD:
It requires a mandate to be submitted to the bank by both the creditor and debtor. It does not allow the debtor to request a refund from its bank after its account has been debited.
Coverage
SEPA consists of 36 countries:
The 27 member states of the European Union, including
the 20 states that are in the Eurozone: Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Spain the 7 states that are not in the Eurozone: Bulgaria, the Czech Republic, Denmark, Hungary, Poland, Romania, Sweden. The four member states of the European Free Trade Association the three states having signed the European Economic Area agreement: Iceland, Liechtenstein, Norway. the one EFTA member that has not joined the EEA, but instead has a series of bilateral agreements with the EU: Switzerland. Four microstates which have monetary agreements with the EU: Andorra, Monaco, San Marino, Vatican City. The United Kingdom, which has withdrawn from the European Union, but will continue to participate in SEPA payment schemes as a non-member with exceptions, such as BIC required. Gibraltar and the Crown dependencies (Guernsey, Jersey and the Isle of Man) are part of SEPA.
