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What is SEPA?

What will SEPA deliver?

What are the benefits of SEPA?

What countries does SEPA cover?

What is a BIC?

What is an IBAN?

What is the SEPA XML format?

SEPA stands for Single Euro Payments Area. It is the area in which individuals and businesses can make and receive card and electronic payments in euros, across Europe, simply, cheaply and efficiently, regardless of their location.

In other words it’s the creation of an integrated euro payments market, with a geographical scope that extends beyond the Eurozone to encompass all EU member states as well as Norway, Iceland, Liechtenstein, Switzerland and Monaco.

SEPA requires the harmonisation, and ultimately the integration, of diverse existing national and cross-border euro payment systems, both at a technical level and in terms of customer services and procedures.

To help achieve this, the European Payments Council (EPC) created a portfolio of SEPA Schemes, which it defines as sets of interbank “rules, practices and standards”, providing a common understanding of “how to move funds from account A to account B” using a SEPA payment instrument.

These Schemes then form the basis around which banks and other payment service providers can develop competitive products and value-added services to offer to their customers.

So far, three SEPA Schemes have been developed for making payments in euros:

  • the SEPA Credit Transfer Scheme,
  • the SEPA Direct Debit (Core ) Scheme,
  • the SEPA Direct Debit Business to Business (B2B) Scheme.

SEPA aims to deliver a number of economic benefits and is intended to provide a catalyst for future evolution and innovation. SEPA payment products and services offer businesses and individuals more ways in which to pay in euros – such as credit transfers and direct debits – as well as ensuring more widespread usage of plastic cards.

SEPA also assists pan-European trade and helps UK businesses compete by making it simpler and cheaper to send or receive euro payments. Larger businesses probably have the most to gain, as they are more likely to operate on a pan-European basis and to be able to capitalise on opportunities to rationalise their cash management and card acceptance arrangements.

From a consumer perspective, it is now easier to transfer funds between the UK and other SEPA countries for individuals who are working or studying abroad, or who have an overseas property. For more information read the EPC’s ‘SEPA for Consumers’ document.

People travelling within Europe on holiday or on business should see their UK-issued cards being even more widely accepted. The SEPA Schemes give consumers more control over their payments – they provide customers with common rules, predictable maximum time cycles for both one-off and recurrent transactions and certainty that payments will be received without fees deducted.

SEPA covers 33 countries in Europe.
Eurozone countries in EU
Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain
Non-Eurozone countries in EU
Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania, Sweden, UK
EEA members
Iceland, Liechtenstein, Norway
Additional SEPA countries
Monaco, Switzerland

A BIC stands for Bank Identification Code and consists of eight to eleven characters.

The BIC is a universal method of identifying financial institutions, in order to facilitate the automated processing of telecommunication messages in banking and related financial environments.

IBANs (International Bank Account Numbers) are used by countries in the European Union, the European Economic Area and Switzerland (plus certain other countries). The IBAN identifies the country, financial institution and the individual bank account. Using an IBAN reduces errors and delays in making international payments. An IBAN is always used in conjunction with a BIC (Bank Identifier Code), and is not a new bank account number: it uses existing sort codes and account numbers – but with extra information.

To migrate to SEPA or for more information, please contact us

XML (eXtensible Mark-up Language) is a standardised syntax for messages that emphasises simplicity, generality, and usability. It allows corporates’ back office systems to communicate efficiently with bank systems. From 1 February 2014 (exclusions apply), it will be a legal requirement for this format to be used for the exchange of all SEPA transactions between corporates and banks in the Eurozone

We at Compass love working with Rapidata – they are really responsive and really take time to talk through all the confusing stuff. They simplify things and are always on the other end of the phone – can’t recommend them enough.

Rosie Rogers, national coordinator, Compass