The SEPA schemes
A SEPA payment is addressed to an IBAN and carried in ISO 20022 messages. The European Payments Council publishes a rulebook for each scheme:
- SEPA Credit Transfer (SCT): the standard euro transfer
- SEPA Instant Credit Transfer (SCT Inst): funds on the payee's account in under ten seconds, at any hour
- SEPA Direct Debit Core: collections under a mandate, designed primarily for consumers
- SEPA Direct Debit B2B: collections where the payer is a business
- Verification Of Payee: a check of the payee's name against the IBAN before a transfer
The law behind SEPA
Regulation (EU) No 260/2012 made the technical requirements binding: euro credit transfers and direct debits in the euro area had to comply by 1 February 2014. Its Article 9 forbids a payer or a payee to specify the Member State in which the other's account is to be located, the rule against IBAN discrimination.
Regulation (EU) 2024/886 added instant payments. Providers that offer euro credit transfers must offer instant ones, at charges no higher, on dates that run from 9 January 2025 for the euro area to 9 July 2027 for providers in other Member States.
Why SEPA matters to a product
One euro account with one IBAN can pay and be paid across the whole area, so a firm does not need a bank in each country. Reaching the schemes takes a licensed participant: a firm either joins as one, directly or through a sponsor bank, or uses a provider that issues IBANs.
SEPA is euro only. Payments in pounds, Swiss francs or zloty use each country's own systems, even where the country is inside the SEPA area.
SEPA, SWIFT or the euro area?
- SWIFT
- A messaging network for payments between banks worldwide, in any currency, often through correspondent banks. SEPA is euro only, with fixed rules and timings.
- Euro area
- The Member States whose currency is the euro. SEPA is wider: it includes EU members with other currencies and countries outside the EU.
Where SEPA shows up in a platform
Modules that do the work
- Accounts & IBANsCustomer accounts with their own IBANs, on the partner bank and the rails you choose.
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
Platforms that need it
Guides that go deeper
- EMI or payment institution licence in the EU, and the agent routeWhat an e-money institution and a payment institution may do in the EU, the capital each needs, safeguarding, passporting, and launching as an agent first.
- How to launch a neobank without a banking licenceYour own e-money licence, an EMI's agent, a partner bank or a bank licence: how each route works, who holds the money, and what safeguarding and deposit protection cover.
Where it is written
The laws and standards this page's facts come from.
- European Payments Council, About SEPA
- European Payments Council, SEPA Instant Credit Transfer
- Regulation (EU) No 260/2012, the SEPA Regulation (EUR-Lex)
- Regulation (EU) 2024/886, the Instant Payments Regulation (EUR-Lex)
General information, not legal advice: what applies to you depends on your services and your market.