These days, sending money between countries is very important because the economies of many of them are linked. As a result, there are always new ways to send money abroad. One of these is SEPA. We’ll talk about what a SEPA transfer is and who can use it today.
What are SEPA transfers for?
The European Union is behind SEPA, which stands for “Single Euro Payments Area.” It was first put in place in 2008 and aims to make a single market for euro payments. It is easier for businesses and people who deal in euros to pay each other, and easier for money to move between countries that use the euro as their currency since SEPA payments were created.
Benefits of SEPA
The countries in the European Union (EU), the area free of customs tariffs that include Switzerland, Norway, Iceland, and Liechtenstein, and 3 of the non-EU countries represent the SEPA core zone. Today, money can be transferred from one area to the next and back without any fees or long wait times. There are three main reasons why SEPA payments are the best option:
The rate of transfer: Through SEPA, you can transmit money from one account to another within 24 hours.
Very low commissions: The majority of the time, the commission for a SEPA transfer is the same as the commission charged for a domestic bank transaction. In addition, there is no limit on the amount that can be remitted at once through SEPA transfers.
Easy to use: To send money to somebody from another country using SEPA, it is only necessary to know their IBAN account number.
What’s the difference between SWIFT and SEPA?
For sending money between countries, SWIFT is still a popular choice. For the European Economic Community, SEPA is the most popular choice. These are the main ways that the two systems are different:
- SWIFT works all over the world, while SEPA only works in European countries;
- SWIFT transfers can be made in different currencies, but SEPA transfers can only be made in euros;
- SWIFT transfers can take up to a week, while SEPA transfers can happen instantly or within a day;
- SWIFT fees are €10–50, while SEPA fees are €0–5;
- When using SWIFT, you need to give a lot of information about the person who will receive the money;
- You only need IBAN and BIC for SEPA transfers.
Types of SEPA transfers
SEPA has two types based on how they work: SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD):
An SCT is a one-time payment sent to a beneficiary through SEPA. The country from which or to which you are sending the money doesn’t have to use euros to send or receive payments; as long as it is a SEPA member, you can do so. If the country that receives the money is not part of the SEPA system, the bank will handle it as any other international money transfer.
SDD is a debit system that lets SEPA bank accounts send and receive euros as payments. Even if the account was opened in a different currency, SEPA direct debit transfers can only be made in euros by the merchant. This means that the bank will change the money at the current exchange rate.
How to send a SEPA transfer?
This kind of transfer can only be made by people who are in the SEPA area. Most banks in the member states accept this kind of payment. To send a SEPA transfer, do the following:
- Go to “Transfers” in your online banking and find the right item;
- Type in the beneficiary’s information, such as IBAN, and the amount you want to send;
- Make sure the information is correct, and complete the transfer.
Conclusion
You now understand what SEPA is and how it is different from SWIFT. Do not pay too much for money transfers and use SEPA payments instead.
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