Definition
A SEPA transfer is a euro bank payment made through the Single Euro Payments Area, which lets businesses and individuals in more than 30 European countries send euros to each other as easily and cheaply as domestic payments. Payers need only the recipient's name and IBAN. Standard transfers arrive within one business day.
Also called: SEPA credit transfer, SEPA payment, SEPA Instant, SEPA Direct Debit
SEPA transfer in practice
SEPA Instant Credit Transfers arrive in seconds, around the clock. Banks in the euro area must offer instant euro transfers at no more than the price of standard ones, and must check that the payee name matches the IBAN before the payment is sent.
For invoicing, SEPA means clients across the eurozone and many neighboring countries can pay you in euros without international wire fees. Put your account name, IBAN, and BIC on the invoice and ask clients to use the invoice number as the reference.
SEPA Direct Debit lets a business collect recurring payments from clients' euro accounts with a signed mandate, which is useful for subscriptions and retainers.
Example
An Irish web developer invoices a client in Portugal for 3,200 euros with her IBAN. The client pays by SEPA Instant, and the money arrives within seconds at no extra cost.
Frequently Asked Questions
Can I receive SEPA payments from outside the EU?
SEPA covers the EU plus several other European countries, such as the UK, Switzerland, and Norway. Payments from elsewhere arrive by international wire instead.
Does SEPA work for currencies other than euros?
No. SEPA is for euro payments only. For other currencies, use domestic schemes or international wires.
Related terms
- IBAN An IBAN (International Bank Account Number) is a standardized account identifier of up to 34 characters, starting with a two-letter country code, used for cross-border bank transfers in Europe and many other regions.
- SWIFT code A SWIFT code, also called a BIC (Bank Identifier Code), is an 8 or 11 character code that identifies a specific bank and branch for international wire transfers.
- Wire transfer A wire transfer is an electronic payment sent individually from one bank to another, usually settling the same day for domestic transfers and within one to five business days internationally.
- Multi-currency invoice A multi-currency invoice is an invoice issued in a currency other than the seller's home currency, usually the client's currency or an agreed international one such as USD or EUR.
- Autopay Autopay is an arrangement in which a client authorizes a business to charge their card or debit their bank account automatically each time an invoice is due.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.