Learn Everything About Sepa Payment Gateway Just Within 10 Minutes

You’ve heard of SEPA payment gateway, but what SEPA stands for, what SEPA payment gateway is, and how does it actually work, as well as what is the easiest way to access SEPA gateways for cross border payments in Europe? In this post, we will go over all you need to know about SEPA online payment method. Now, let’s start off with the SEPA payment definition.

SEPA online payment method is the easiest way of cross border payments in Europe.

The Single Euro Payments Area (SEPA) is a system of transactions created by the European Union (EU). The SEPA harmonizes the way cashless payments are transacted between Euro countries. People conducting business in these countries now make cross-border cashless payments at the same cost and convenience as domestic payments thanks to SEPA online payment method.

SEPA payment definition for your information.

The SEPA is managed by the European Payments Council on a collaborative basis with the European Commission, the European Central Bank (ECB), and other European stakeholder groups.

There are 36 countries that participate in SEPA, which is an well-established home market area for making cross-border Euro bank transactions. It essentially makes international money transfers easier by making it equivalent to domestic transactions. This means that even if you’re transferring funds between two banks that are in different SEPA countries, you can enjoy a fast transaction and minimal transfer fee.

KEY TAKEAWAY

• SEPA was put in place to streamline payment management, reduce processing and banking costs, and shorten processing times.
• The Single Euro Payments Area is approved and regulated by the European Payment Council (EPC).

What is the SEPA payment system?

Name	Single Euro Payments Area.
Implementation year	2014 for Euro area countries .   2016 for Non-Euro area countries.
Currency	Euro (€).
Cashless payment instruments	Credit transfer, direct debit.
Speed of processing	No longer than 1 business day for electronic payment orders, 2 business days for paper-based payment orders.
SEPA area countries	36 countries (includes some non-euro area and non-EU countries).
Stakeholders	European banking and payments industry, payment service users, national governments, the European Commission, the Eurosystem, and several other public authorities.

27 Member States of the European Union (EU):

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

6 non-EEA countries, to which the geographical scope has been extended:

Andorra, Monaco, San Marino, Switzerland, United Kingdom, Vatican City State, Saint-Pierre-et-Miquelon, Guernsey, Jersey, Isle of Man.

3 countries of the European Economic Area (EEA):

Liechtenstein, Iceland, and Norway.

Is the UK a SEPA member?

The EPC has approved the ongoing participation of the UK in the SEPA payment system schemes in the event that the UK leaves the EU without a trade agreement in place.

SEPA payment method is applied in the UK which will be treated as a “third country”.

The UK departed the EU on January 31, 2020 and entered an 11-month implementation period under the provisions of its withdrawal agreement with the EU. During this implementation period, EU legislation will continue to apply in the UK.

From January 1, 2021, subject to any trade agreement entered into between the EU and the UK, the UK will be treated as a “third country” under the rules of SEPA.

KEY TAKEAWAY

• Although the UK is no longer part of the EU, it is still part of the SEPA payment system scheme as a non-EEA SEPA country.

4.1. SEPA definition vs SWIFT definition:

SEPA (Single Euro Payments Area)	SWIFT (Society for Worldwide Interbank Financial)
This type of payment transfer makes it possible for people and businesses to send and accept sepa payments in Euro throughout Europe with the same convenience as they do when paying in their home country.	In brief, SWIFT is the leading global messaging system that banks and other financial institutions use. It transmits information and financial messages related to payments and transactions worldwide.

4.2. Differences between SEPA and SWIFT:

• SWIFT enables money transfers internationally, while the SEPA payment system can only be made within the SEPA area.
• SWIFT transfers can be executed in various currencies while the SEPA payment system initiative encompasses transfers in Euro only.
• The speed at which the SEPA payment system be made is fast. It takes less than one business day after the document is processed.

Despite their differences, both SWIFT and SEPA payment system share the same goal, which is to offer seamless, secure, and reliable money transfers to people and the businesses, and to enhance the integrity of the increasingly dynamic payment environment.

SEPA payment system uses the International Bank Account Numbers (IBAN). SEPA payment method with additional optional features or services such as mobile phone or smart card payment systems, are not directly covered. To make SEPA payments, you only need to have the payee’s bank details in the international format. Most SEPA transfers arrive in the beneficiary’s bank account within 1-2 business days.

SEPA payment gateway brings numerous benefits for merchants in the EU zone.

• Elimination of barriers to make international SEPA payment types.
• Cost-effective harmonized SEPA payment system.
• Simplicity and convenience.
• SEPA payment system allows for cross-border transfer without incurring charges as if one is making a transfer to a local bank.
• SEPA payment system minimizes failed payments due to card expiry or cancellation.
• SEPA payment system reduces administrative time, such as when updating card details.

Even if you don’t live in the SEPA area countries, you can still open a non-resident virtual bank account with an International Bank Account (IBAN) in Europe and be able to make Euro transfers without a fee if it’s an internal bank transfer (same bank), and small fee if it’s a transfer between different SEPA bank accounts.

IBAN (International Bank Account Number) is an internationally agreed system of identifying bank accounts across national borders to facilitate the communication and processing of cross border transactions with a lower chance of transcription errors. It was originally adopted by the European Committee for Banking Standards (ECBS) and afterwards as an international standard.

Using the SEPA payment gateway and IBAN can avoid extra fees that may occur.

An IBAN consists of up to 34 alphanumeric characters comprising a country code, two check digits, and a number that includes the domestic bank account number, branch identifier, and potential routing information.

Transferring funds overseas from your bank account can sometimes be costly and time consuming. By using your IBAN number, you can avoid extra fees that may occur when your bank needs to reverse an incorrect payment, also reduce international transfer errors as well as speed up transfer times.

While the IBAN system was originally developed to streamline payments in the EU, it has now been adopted by many other countries and regions, including the Caribbean and Middle East. As of May 2020, 77 countries were offering IBANs. You can find a full list of all the countries using the system here.

If you want to sell to European consumers, accepting SEPA payments is imperative. Choosing a SEPA payment gateway that automates cross-border transactions can improve your bottom line, enhance compliance, and simplify your ability to get funds easily and promptly. PayCEC’s SEPA gateway is one of the quickest, cheapest, and safest ways to get your money across from one eurozone country to another. Besides, PayCEC’s SEPA payment gateway is compliant with International Bank Account Number (IBAN) requirements. IBANs are needed to make a cross-border payment using the SEPA payment system.

PayCEC launched its ready-made SEPA online payment method in October 2021 that enables merchants to access SEPA without any intermediary bank. Besides, PayCEC’s SEPA payment gateway fee is considered cost efficient as it is lower than international bank transfers.

SEPA gateway helps entrepreneurs do business with confidence.

You can do business with confidence because PayCEC’s SEPA online payment method offers SCA (Strong Customer Authentication) for extra fraud protection, ensuring the safety and security of payments. Furthermore, PayCEC’s SEPA payment gateway also transfers customers' data to SSL-encrypted, which means the address starts with https:// rather than http:// to guarantees a secure connection.

With PayCEC’s SEPA payment gateway, start collecting payments within the eurozone is so easy. Learn more

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About PayCEC SEPA payment gateway

PayCEC’s SEPA payment gateway was established in response to the growing need of businesses to accept SEPA payments more quickly and easily. In the digital era, our payment flow has evolved to work seamlessly and effectively across all platforms and devices. We pride ourselves on combining superior technology with first-class customer service.

PayCEC’s payment gateway is a truly global payments platform that not only allows customers to get paid instantly and securely, but also withdraws funds to their business accounts in various currencies.

We have created an open and secure payments ecosystem that entrepreneurs and businesses choose to securely transact with each other online and on any device. We proudly maintain the highest level of client advocacy in the industry.

PayCEC Team

• [email protected]
• +44 2032 864370
• www.paycec.com