What is SEPA?

With a single set of payment instruments, SEPA is an important milestone to the European single market. In a way, it is an extension of the euro banknotes and coins changeover. The introduction of the euro has helped to make cash payments anywhere in the euro area just as easy as at home. But, until recently, it was not so easy to pay for goods or services electronically in another euro area country, for example with your bank debit card – a means of payment favoured by many Europeans today. And when you wanted to transfer money from your home bank account to an account in another euro area country, the payment could take much longer, and sometimes, the beneficiary did not get the full amount.   

Since the 1^st February 2014, in the 19 euro area countries, SEPA changed all this. It made all electronic national and cross-border payments in the euro as easy as cash payments. You can make fast and secure transfers between accounts anywhere in the euro area. And it will be possible for the 16 non-euro area countries of the SEPA zone from the 31^st October 2016. It is the deadline decided by the European Union to close the transition period to SEPA Credit Transfer and SEPA Direct Debit. 

You have certainly discovered yourself: SEPA direct transfer and SEPA direct debit have modified your bank account details. These are now harmonised at European level and use your BIC and IBAN codes to identify respectively your financial institution and your bank account.  The numbers are longer and not so easy to remember but this inconvenience is compensated by the benefits of these new norms of payment.  

SEPA means also a better banking service for all. The pricing is transparent and the costs are reduced. You can easily use direct debits for all your monthly bills (gas, electricity or phone), SEPA guarantees that your euro payments are made promptly and in full. If something goes wrong with your euro payments, banks assume full responsibility. And you have 8 weeks to dispute a bill.

11/2021