SEPA (Single Euro Payments Area)

Before SEPA, sending euros from Sofia to Madrid could cost more and take longer than a payment inside Bulgaria. SEPA removed that difference by giving banks common formats and rules for euro payments.

How SEPA works

SEPA was launched by the European banking and payments industry with support from national governments, the European Commission and the Eurosystem. The payment schemes, meaning the technical standards and business rules, are run by the European Payments Council, an association of payment service providers. According to the ECB, the area covers 41 countries, including EU members that do not use the euro and several countries outside the EU.

The three SEPA instruments are:

• SEPA Credit Transfer (SCT): you send euros from your account to another account. Under the EU payment services directive the money must reach the payee's bank by the end of the next business day.
• SEPA Instant Credit Transfer (SCT Inst): launched in November 2017. It runs 24 hours a day, 365 days a year, and makes funds available to the payee within ten seconds.
• SEPA Direct Debit: the payee collects money from your account under a mandate you signed.

All of them use the IBAN to identify accounts.

EU rules that shape SEPA payments

• No IBAN discrimination. A payer or payee may not insist that an account be held in a particular EU country (Regulation (EU) No 260/2012, Article 9).
• Instant at no extra cost. Regulation (EU) 2024/886 requires payment service providers to offer instant euro transfers and bars them from charging more than for a standard transfer. In euro area countries, banks had to be able to receive instant transfers by 9 January 2025 and send them by 9 October 2025. Countries outside the euro area have later deadlines.
• Verification of payee. The same regulation requires banks to check the payee's name against the IBAN before you confirm a euro credit transfer.

EU rules such as equal charges for euro payments do not extend to SEPA countries outside the EU and EEA, the ECB notes, even though the scheme rules apply there.

Example

A client in Spain orders a EUR 2,500 SEPA transfer to you on a Tuesday morning. As a standard transfer, it must reach your bank by the end of Wednesday. If both banks support SEPA Instant, the money arrives within ten seconds, and that works at the weekend too.

If the account receiving the payment is a EUR account from xChange.bg, a technology provider whose accounts and conversions come from the regulated partner Bridge (a Stripe company), the EUR 2,500 converts to USDC on arrival. The 1.5% on-ramp fee is EUR 37.50, and the remaining EUR 2,462.50 becomes about 2,863.37 USDC at an illustrative rate of 0.86 EUR per USDC.

Common confusion

• SEPA is not the same as the EU. It is wider, and it only covers euro payments.
• "Instant" needs both sides. If the receiving bank does not accept SCT Inst, the payment cannot go as an instant transfer.
• SWIFT is a different network. It carries international payments in many currencies. SEPA is built for euro.