SEPA (Single Euro Payments Area)
Quick Answer
SEPA is a payment integration initiative that harmonizes euro-denominated electronic payments across 36 European countries, making cross-border transfers as simple as domestic ones.
Definition
SEPA is a payment integration initiative that harmonizes euro-denominated electronic payments across 36 European countries, making cross-border transfers as simple as domestic ones.
Explanation
SEPA enables euro transfers between any SEPA member countries at the same cost and speed as domestic transfers. Members include all 27 EU countries plus Iceland, Liechtenstein, Norway, Switzerland, Monaco, San Marino, Andorra, Vatican City, and the UK. SEPA transfers are typically processed within 1 business day, and SEPA Instant transfers arrive in under 10 seconds.
For international money transfers within the Eurozone, SEPA is the cheapest and fastest option. Unlike SWIFT, SEPA transfers have no intermediary bank fees, and many banks offer them for free or at very low cost. However, SEPA only supports euro transfers — if you need to send in a different currency, you cannot use SEPA.
To send a SEPA transfer, you need the recipient's IBAN and BIC/SWIFT code. The maximum amount for SEPA Instant is €100,000, while regular SEPA transfers have no standard limit.
Example
A person in France sending €500 to a bank account in Germany pays €0-1 in fees and the transfer arrives within 1 business day. The same transfer via SWIFT would cost €15-25 and take 2-3 days.