What is a SEPA transfer and how do I use it?
What is a SEPA transfer and what is it used for?
A SEPA transfer (Single Euro Payments Area) is a standardised payment made to another bank within the SEPA zone. SEPA was created by the European Union alongside the European Payments Council, to make it simpler to send overseas payments in euros.
The main advantage of SEPA transfers is that all payments sent in euros across SEPA zone countries, all have the same fixed fee.
Which countries use SEPA transfers?
There are 36 European countries within the SEPA zone which include:
Andorra, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom and Vatican City.
The UK will remain a SEPA zone country even after the Brexit transition period on 31st December 2020.
Do I need a SEPA specific account?
A SEPA transfer is a standard option for any country within the SEPA zone when sending euro payments, regardless of the type of bank account. Therefore, it’s often not necessary to open a SEPA specific bank account, although it’s always worth checking if your bank is SEPA compliant as not all European banks are SEPA members.
Some of the advantages of making SEPA transfers for international payments in euros include:
- Low cost, transparent fees
- Transfers are quick and simple
- Only one bank account needed for all your SEPA zone euro transfers
- Fast processing can increase opportunities for international business
How is a SEPA bank transfer processed?
It is possible to set up both single and regular international payments by making either a SEPA credit transfer or a SEPA direct debit transfer. When making a SEPA direct debit, this often requires you to sign a mandate as funds will be regularly deducted from your bank account.
SEPA transfers can be processed either via online banking or visiting your bank branch. The majority of payments are sent via the SWIFT network. Each bank has a unique SWIFT code which should be provided to you by the recipient, or this can be found online. SWIFT codes ensure that international transfers are sent to the correct bank account.
To make a SEPA transfer via SWIFT, you will need:
- Correct SWIFT code of the payee’s bank
- IBAN (international bank account number) of the payee’s account
- The country you are sending payment to
- The currency – SEPA transfers are always in euros
Once the payment is sent, it can take up to five working days for the transfer to appear in the payee’s account; however, transfers between SEPA countries are usually a lot quicker.
Alternatives to SEPA transfers
When sending international payments, it can often be more cost-effective to use an independent foreign exchange specialist to avoid bank transfer fees. At Halo Financial, we offer a variety of currency products, including fast same-day payment options to ensure that your currency transfers are sent as efficiently as possible.
To find out more about how you can save time and money when making overseas payments, please give Halo Financial a call today on 020 7350 5474.
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