SEPA

SEPA was established by the European Payments Council and went live in 2008. It harmonised the euro payment infrastructure across participating countries so that a euro-denominated bank transfer from a Spanish account to a German one is processed at the same speed and cost as a domestic Spanish transfer. The geographic scope is broader than the EU: 36 countries including all EU member states, the EEA (Iceland, Norway, Liechtenstein), the UK (post-Brexit, the UK remains in SEPA), Switzerland, Andorra, Monaco, San Marino, Vatican City.

The four SEPA payment schemes:

• SEPA Credit Transfer (SCT) — standard euro transfer, settled within one business day. Fee structure must match domestic transfers (no extra cost for cross-border SEPA).

• SEPA Instant Credit Transfer (SCT Inst) — instant transfer, settled in under 10 seconds, 24/7/365 including weekends and holidays. EU Regulation 2024/886 (the Instant Payments Regulation) made SCT Inst mandatory for all PSPs (payment service providers) in the eurozone by 9 January 2025 (receive) and 9 October 2025 (send), with non-eurozone SEPA states following in 2027.

• SEPA Direct Debit (SDD Core) — recurring or one-time pull-style debit authorised by the payer. Used for utility bills, subscriptions, and tax payments across the SEPA area.

• SEPA B2B Direct Debit — business-to-business variant of SDD with stricter mandate handling and shorter dispute periods.

Practical SEPA implications for expats:

• Sending salary from a UK bank to a Spanish account: cheap (often free) and fast, with no currency conversion if the UK account has a EUR sub-account.

• Direct-debiting a Portuguese rent from a Dutch bank: works the same as if the bank were Portuguese.

• Multi-country freelancing: a single Spanish or French bank account can receive payments from EU clients without complex international wire setups.

SEPA does NOT cover non-euro currencies (GBP transfers between UK banks are NOT SEPA; they use the UK's CHAPS or Faster Payments system) or non-SEPA jurisdictions. A transfer from a Spanish euro account to a US dollar account is an international wire (SWIFT), not SEPA, and incurs higher fees and longer settlement.