What are SEPA Transfers? - Everything You Need To Know

What are SEPA Transfers? - Everything You Need To Know
Rohit5 January 2024

What are SEPA Payments?

SEPA is a payment format that allows the transfer of Euro-denominated funds within the SEPA region, with 36 member countries.

36 countries are members of SEPA: 

What are SEPA Payments
  • 27 member countries are from the European Union, such as Italy and Germany. 

  • 4 member countries are from the European Free Trade Association. These are Switzerland, Iceland, Liechtenstein and Norway. 

  • Four member microstates with special monetary arrangements with the EU: San Marino, Vatican City, Monaco, and Andorra. 

  • The UK, although not a part of the EU, is still a part of the SEPA. 

SEPA first began operations in January 2008 and is regulated by the European Payment Council (EPC). At first, SEPA only processed credit transfers, but it was updated in November 2009 to include direct debits and debit cards. 

As an Indian freelancer or business owner, collaborating with clients in the EU and understanding the intricacies of the SEPA transfers, with its key features and benefits, is important. This blog will help you unravel the significance of SEPA transactions and explore how this initiative is reshaping the landscape of European electronic payments

Types of SEPA Transfers

SEPA global transactions within the member EU countries allow the following four payment processing schemes.

Types of SEPA Transfers
  • SEPA Credit Transfer: These are one-time money transfers between two banks with IBAN identification codes within the SEPA region. 
  • SEPA Instant Credit Transfer: These are SEPA credit transfers with the facility of expediting the transaction procession and completion speed. The facility allows instant transfer of one-time funds up to €100,000. 
  • SEPA Direct Credit Core: The funds are debited from the debtor's bank account and directly credited to the creditor’s account. The transfer requires a mandate from the debtor and is identified by a unique mandate reference (UMR). 
  • SEPA Direct Debit Business-to-Business: Companies and tax authorities use this payment type. Common transactions involve paying taxes, repaying loans, or paying for high-volume purchases. 
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