SEPA – What is SEPA?

SEPA – short for the Single Euro Payments Area – is an EU initiative that aims to simplify cashless payments and bank transfers.

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The main aim of SEPA is to turn national Eurozone markets into a single, Europe-wide market by improving the efficiency of cross-border transactions.

How does SEPA work?

SEPA enables consumers, businesses and public administrations to make credit transfers, direct debit payments, and credit card payments across Europe as easily as they can make domestic payments. SEPA only applies to payments or transfers made in euros.

Customers can make payments in euros to anyone in the participating countries using a single bank account and following a single set of payment instructions. Anyone who has a bank account within a participating country can receive salaries and payments across the entire Eurozone.

By introducing shared financial standards, procedures and infrastructure, SEPA aims to reduce the overall cost of moving capital across the region.

Which countries are covered by SEPA?

The EU’s SEPA initiative covers the 27 member states of the European Union, including the 19 states that are part of the Eurozone and the eight states that are not in the Eurozone.

SEPA also applies to the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway, and Switzerland), as well as Monaco and San Marino.

Some of the countries covered by SEPA have special territories, but SEPA doesn’t apply in these territories. 

SEPA in the UK after Brexit

Although the UK is no longer part of the European Union, it has retained its SEPA membership. This means that SEPA still applies for UK-EU or EU-UK transactions. 

However, some countries, including Italy and Spain, have started charging extra fees for UK payments. You may also experience longer delays in sending/receiving payments.

As of August 2021, the UK continues to have SEPA membership, however, this could change in the future. You can find the most up to date information on the SEPA website.