SEPA

A brief history of SEPA

In 2007, the EU adopted the Payment Services Directive, establishing the legal framework for SEPA. The first pan-European payment instruments were introduced in January 2008.

Initially, banks across Europe were expected to transition to the new system by 2010 fully. However, due to the significant investment required in technology, SEPA implementation was only completed in 2014.

In December 2019, the European Commission introduced new rules requiring banks to charge the same fees for cross-border payments within the EU as for domestic transactions, prohibiting additional fees for international transfers.

As of mid-2024, SEPA covers all EU member states, European Economic Area (EEA) countries, and several other jurisdictions, including Andorra, the Vatican, the United Kingdom, Iceland, Liechtenstein, Norway, Monaco, San Marino, and Switzerland.

The SEPA system is managed by the European Payments Council, with the participation of the European Commission, the European Central Bank (ECB), and other stakeholders.

Key features of SEPA

SEPA was created to enhance the efficiency of cross-border transfers, establish a single internal market for European countries, and reduce the overall costs of money movement within this market. For a SEPA transfer, both the sender and the recipient must hold accounts with banks connected to the system.

Initiating a transfer requires only the recipient’s International Bank Account Number (IBAN). The introduction of SEPA has made euro transfers between countries more affordable, benefiting both businesses and individual users. The key advantages of SEPA payments include:

• Fast processing – transfers are usually completed within seconds or by the next business day;
• No transfer amount limits;
• No additional documentation is required for sending funds;
• Simple and convenient transfer process.

A SEPA transfer can be initiated at a bank branch, through a mobile app, or via online banking.