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Single Euro Payments Area | |
|---|---|
 | |
 Non-Eurozone European Union member states SEPA member states negotiating European Union accession Microstates participating in SEPA | |
| Type | Uniform pan-Europeanfinancial transactions framework |
| Participants | 41 polities
|
| Government | Public-private hybrid administration subject toEU laws |
• Public regulator | Euro Retail Payments Board |
• Private regulator | European Payments Council |
| Currency | Euro (€) |
TheSingle Euro Payments Area (SEPA) is a payment integration initiative of theEuropean Union for simplification of bank transfers denominated ineuros. As of 2025[update], there were 41 members in SEPA,[2][3] consisting of the 27member states of the European Union, the four member states of theEuropean Free Trade Association (Iceland,Liechtenstein,Norway andSwitzerland), theUnited Kingdom, as well as fiveEU candidate countries.[4][5][3] Some microstates participate in the technical schemes:Andorra,[6]Monaco,San Marino, andVatican City.[4] As of 2025,Albania,Moldova,Montenegro,North Macedonia andSerbia are the five countries negotiating to join the EU that are included in SEPA.[2]
SEPA covers predominantly normal bank transfers. Payment methods which have additional optional features or services, such asmobile phone or smartcard payment systems, are not directly covered.[7] However, the instant SEPA payment scheme facilitates payment products also onsmart devices.[8]
The aim of SEPA as stated in 2008 was to improve the efficiency of cross-border payments and turn the previously fragmented national markets for euro payments into a single domestic one. SEPA would enable customers to make cashless euro payments to any account located anywhere in the area, using a singlebank account and a single set of payment instruments.[9] People who have a bank account in aeurozone country can use it to receive salaries and make payments all over the eurozone, for example when they take a job in a new country.
The project includes the development of commonfinancial instruments, standards, procedures, and infrastructure to enableeconomies of scale. As of 2007[update], it was estimated this could reduce the overall cost to the European economy of moving capital around the region by up to 2–3% of totalGDP).[10][needs update]
SEPA does not cover payments in currencies other than the euro. This means that domestic payments in SEPA countries not using the euro will continue to use local schemes, but cross-border payments will use SEPA and the euro with eurozone countries to a high degree.
The Nordic countries (other than Finland) do not use the euro and have no plans to adopt the euro. These four countries (Sweden, Denmark, Norway, and Iceland) started initiatives during 2017–2019 for simpler, faster, and cheaper cross-border payments between one another. These initiatives have however not[according to whom?] been successful.[11]
The different functionalities provided by SEPA are divided into separate payment schemes.
SEPA Credit Transfer (SCT) allows for the transfer of funds from one bank account to another. SEPA clearing rules require that payments made before the cutoff point on a working day be credited to the recipient's account by the next working day. The scheme was introduced in January 2008. In February 2014 it replaced the national credit transfer schemes, and later made the use ofInternational Bank Account Number mandatory for transfers.[12]
SEPA Instant Credit Transfer (SCT Inst), also called SEPA Instant Payment,[13] provides for instant crediting of a payee, the delay being less than ten seconds, initially, with a maximum of twenty seconds in exceptional circumstances.[14] This scheme was launched in November 2017, and was at that time operational for end customers in eightEurozone countries.[15] As of 2024, not all banks offer their customers instant transfers; however, in March 2024 the EU adopted theInstant Payments Regulation which requires all banks to offer instant transfers from January 2025 (incoming transfers) / October 2025 (outgoing transfers).[16]
Direct debit functionality is provided by two separate schemes. The basic scheme,Core SDD, is primarily targeted at consumers and was launched on 2 November 2009.[17] Banks offering SEPA payments are obliged to participate in this scheme.[18] A second scheme,B2B SDD, is targeted towards business users. Banks offering SEPA payments are not obliged to participate in this scheme (participation is optional).[18] Among the differences with respect toCore SDD:[18]
SEPA consists of 41 countries:[5][19]
All parts of a country are normally part of SEPA. However, the following countries havespecial territories which are not part of SEPA:
Jurisdictions using the euro that are not in SEPA:Akrotiri and Dhekelia, French Southern and Antarctic Lands andKosovo.[26]
Jurisdictions in Europe not formally belonging to SEPA normally use SEPA schemes anyway for international euro payments, especially to or from the eurozone, with exceptions such as fees charged and BIC required.
SEPA guarantees that euro payments are received within a guaranteed time, and banks are not allowed to make any deductions of the amount transferred, introduced by a regulation in 2001.[27] Banks and payment institutions still have the option of charging a credit-transfer fee of their choice for euro transfers if it is charged uniformly to all EEA participants, banks or payment institutions, domestic or foreign.[28] This is relevant for countries which do not use the euro; where domestic transfers in euros by consumers are uncommon,[clarification needed] and inflated fees for euro transfers might be charged in these states. Sweden and Denmark have legislated that euro transfers shall be charged the same as transfers in their own currency; which has the effect of giving free euro ATM withdrawals, but charges for ATM withdrawals in other currencies used in the EU.
In regulation (EC) 924/2009 (the Cross-border Payments Regulation), theEuropean Parliament mandated that charges in respect of cross-border payments in euros (of up to EUR 50,000) between EU member states shall be the same as the charges for corresponding payments within the member state.[29][30] However, the EU Regulation does not apply to all SEPA countries; the most significant difference is the inclusion of Switzerland in SEPA but not the EU. The rule of the same price applies even if the transaction is sent as an international transaction instead of a SEPA transaction (common before 2008, or if any involved bank does not support SEPA transactions). Regulation 924/2009 does not regulate charges for currency conversion so charges for non-euro transactions can still be applied (if not banned by national law).[31]
There were two milestones in the establishment of SEPA:
For direct debits, the first milestone was missed due to a delay in the implementation of enabling legislation (thePayment Services Directive or PSD) in theEuropean Parliament. Direct debits became available in November 2009, which put time pressure on the second milestone.[32]
TheEuropean Commission has established the legal foundation through the PSD. The commercial and technical frameworks for payment instruments were developed by the European Payments Council (EPC), made up of European banks. The EPC is committed to delivering three pan-European payment instruments:
To provide end-to-end automated direct payment processing for SEPA-clearing, the EPC committed to delivering technical validation subsets ofISO 20022. Whereas bank-to-bank messages (pacs) are mandatory for use, customer-to-bank payment initialization (PAIN) message types are not; however, they are strongly recommended. Because there is room for interpretation, it is expected that several PAIN specifications will be published in SEPA countries.
Businesses, merchants, consumers and governments are also interested in the development of SEPA. The European Associations of Corporate Treasurers (EACT),TWIST, theEuropean Central Bank, theEuropean Commission, the European Payments Council, the European Automated Clearing House Association (EACHA), payments processors and pan-European banking associations –European Banking Federation (EBF),European Association of Co-operative Banks (EACB) and theEuropean Savings Banks Group (ESBG) – are playing an active role in defining the services which SEPA will deliver.
Since January 2008, banks have been switching customers to the new payment instruments. By 2010, the majority were expected to be on the SEPA framework. As a result, banks throughout the SEPA area (not just theEurozone) need to invest in technology with the capacity to support SEPA payment instruments.
SEPA clearance is based on theInternational Bank Account Numbers (IBAN). Domestic euro transactions are routed by IBAN; earlier national-designation schemes were abolished by February 2014 (with delays in some countries), providing uniform access to the new payment instruments. Since February 2016 Eurozone payment system users no longer requireBIC sorting information for SEPA transactions; it is automatically derived from the IBAN for all banks in the SEPA area.
An instant 24/7/365 payment scheme named SCT Inst went live on 21 November 2017 allowinginstant payment 24 hours a day and 365 days a year.[33]The participating banks will handle the user interface and security, like for existing SEPA payments, e.g. web sites and mobile apps.[34]
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| 1957 | Treaty of Rome creates theEuropean Community. |
|---|---|
| 1992 | Maastricht Treaty creates the euro. |
| 1999 | Introduction of the euro as an electronic currency, including introduction of the RTGS systemTARGET for large-value transfers. |
| 2000 | Lisbon Strategy: Meeting creates EuropeanFinancial Services Action Plan. |
| 2001 | EC Regulation 2560/2001 harmonises fees for cross-border and domestic euro transactions.[28] |
| 2002 | Introduction of Eurobanknotes andcoins. |
| 2003 | FirstPan-European Automated Clearing House (PE-ACH) goes live; EC Regulation 2560/2001 comes into force for transactions up to €12,500. |
| 2006 | EC Regulation 2560/2001 increases ceiling on same-price euro transactions to €50,000. |
| 2008 | SEPA pan-European payment instruments become operational (parallel to domestic instruments) on 28 January[35] |
| 2009 | Payment Services Directive (PSD) enacted in national laws by November. |
| 2010 | SEPA payments become dominant form of electronic payments. |
| 2011 | SEPA payments replace national payments in theEurozone. |
| 2014 | 1 August: Single Euro Payments Area (SEPA) becomes fully operational in all Eurozone countries.[36] |
| 2016 | Since 31 October 2016,payment service providers (PSPs) in non-euro countries are only able to collect euro-denominated payments using SEPA procedures. Non-euro schemes, such as the UK'sDirect Debit, continue without change.[37] |
| 2017 | Since 21 November 2017, instant SEPA payments of up to 15,000 euros within 10 seconds become available (optional participation forPSPs).[38] |
| 2019 | On 1 March 2019Andorra andVatican City join SEPA. |
| 2021 | On 1 January 2021 the United Kingdomleaves the EU but remains in SEPA payment schemes, subject to different rules.[1] |
| 2023 | On 8 November 2023, theEuropean Commission adopted a new Growth Plan for theWestern Balkans, with the aim of bringing them closer to the EU through offering some of the benefits ofEU membership to the region in advance of accession. One of the priority actions is access to the Single Euro Payments Area (SEPA).[39] |
| 2024 | On 30 January 2024, theNational Bank of Moldova submitted an application for membership in SEPA.[40] Moldova's National Bank Governor expected the application and evaluation stage to take a year. |
| 2024 | On 12 June 2024, theNational Bank of Albania signs the official application for membership in SEPA.[41] |
| 2024 | On 17 June 2024, theNational Bank of Serbia publishes the draft version of the decision for accessing SEPA.[42] |
| 2024 | On 1 July 2024, theCentral Bank of Montenegro submitted an application for membership in SEPA.[43] |
| 2024 | On 11 July 2024, theNational Bank of North Macedonia submitted an application for membership in SEPA.[44] |
| 2024 | On 21 November 2024, theEuropean Commission welcomedAlbania andMontenegro in SEPA.[45] |
| 2025 | On 6 March 2025, theEuropean Commission welcomedMoldova andNorth Macedonia in SEPA.[2] |
| 2025 | On 22 May 2025, theEuropean Commission welcomedSerbia in SEPA.[25] |
| 2025 | On 9 October 2025, Euro-area states must implement verification of payee for instant payments.[46] |
As of August 2014, 99.4% of credit transfers,[clarification needed] 99.9% of direct debit, and 79.2% of card payments have been migrated to SEPA in the euro area.[47]
The official progress report was published in March 2013.[48]
In October 2010, the European Central Bank published its seventh progress report on SEPA.[49] The European Central Bank regards SEPA as an essential element to advance theusability and maturity of the euro.
The use of credit cards isn't as prevalent in Europe where retailers are using the SEPA instant payment scheme.
