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What are SEPA transfers and how do they work?

30 January 2025

A SEPA transfer is a secure electronic payment made through the Single Euro Payments Area (SEPA). SEPA transfers are a cheaper and safer way of making euro payments to any of the 38 countries within the network.

Whether you’re sending money to family in Europe, paying for a destination wedding or purchasing property overseas – SEPA provides a seamless payment infrastructure, making international transactions as simple as domestic ones. That’s why Lumon uses the SEPA network to streamline our clients’ payments to popular destinations like Spain, France and Portugal. 

In this guide, we’ll help you get to grips with how SEPA transfers work and how they make euro transactions easier and more convenient.

Which countries are in the Single Euro Payments Area (SEPA)?

The SEPA region consists of 38 member countries:2

  • The 27 EU member states
  • The four-member states of the European Free Trade Association (EFTA): Iceland, Liechtenstein, Norway, and Switzerland
  • Four microstates: Andorra, Monaco, San Marino, Vatican City
  • Albania and Montenegro, admitted to SEPA in 2024
  • The United Kingdom (UK) – the European Payments Council (EPC) approved the UK’s ongoing participation in SEPA post-Brexit.

Types of SEPA transfer

There are three types of SEPA transfer. Each works differently and is best suited to specific payment types:

1. SEPA Credit Transfer

Typically used for one-off transfers, SEPA Credit Transfers use the IBAN (International Bank Account Number) and sometimes the BIC (Bank Identifier Code) to send funds to the correct accounts, usually within one business day.3

2. SEPA Instant Credit Transfer

The SEPA Instant Credit Transfer scheme processes and settles payments in real-time – like domestic payments – seven days a week (24 hours a day, 365 days a year).4

3. SEPA Direct Debit Transfer

SEPA Direct Debit Transfers are typically used for recurring payments like rent and utility bills. The recipient requests the SEPA money transfer from the sender, which can take up to three business days to process and settle.5

What are the differences between SEPA and SWIFT?

Like SEPA, SWIFT (Society for Worldwide Interbank Financial Telecommunications) allows you to transfer money across international borders, but there are fundamental differences:

  • Currency: The global reach of SWIFT payments means they can be made in any currency, whereas SEPA transactions are limited to euro payments.
  • Reach: While SEPA covers the EU and other SEPA countries within Europe, SWIFT allows financial institutions to send and receive money globally.
  • Cost: SWIFT payments typically incur a transaction fee of around £20, though the exact amount can vary depending on the bank, whereas SEPA payments are usually fee-free.

Benefits of SEPA transfers

To achieve its core objective of making cross-border euro payments as simple and inexpensive as domestic payments, SEPA offers three key benefits:

1. Simple

SEPA standardises euro payments across its network, allowing cross-border transactions to be processed with the same ease as domestic payments. This has resulted in seamless direct debit and credit transfers between countries that are SEPA members.

2. Cost-effective

Before SEPA was introduced, cross-border transactions could incur substantial fees. By eliminating the distinction between domestic and cross-border euro transfers, SEPA ensures the cost of sending funds between member countries is the same as a domestic transfer.

3. Security and speed

The standardised procedures under SEPA ensure your money is kept safe in line with anti-fraud measures. What’s more, funds are typically credited to the recipient’s account within one business day. This speed is crucial in overseas property transactions, where the timing of payments can make or break a deal.

How long does a SEPA transfer take with Lumon?

At Lumon, we endeavour to make your transfers as cost-effective and secure as possible. That’s why we typically execute euro payments via a SEPA Credit Transfer. Here’s how it works:

Cut-off times

SEPA transfers to the following countries should arrive the same-day if sent before 12:15 (BST):

  • Austria
  • Belgium
  • Czech Republic
  • Germany
  • Denmark
  • Spain
  • Finland
  • France
  • Italy
  • Norway
  • Portugal

To ensure they are received the next day, SEPA transfers to all other member countries must be sent by 13:40 (BST). Always consider that SEPA transfers can take up to five days to fully process, depending on the beneficiary bank. 

If you need to make a same-day euro payment, we can facilitate this via SWIFT. However, some beneficiary banks charge additional fees for receiving this transfer, which are outside our control. The cut-off time for SWIFT transfers varies between banks from 15.00 (BST) to 15.25 (BST).

Payment confirmation

Once your payment is made, you will receive a payment confirmation showing the amount sent, the recipient’s bank details and the estimated delivery date (the date the money should clear in their account).

What you’ll need to provide for a SEPA payment

  • Beneficiary’s name
  • Beneficiary’s SWIFT BIC (Bank Identifier Code)
  • Beneficiary’s International Bank Account Number (IBAN)
  • Beneficiary’s address
  • Reason for transfer

These documents will also be required with any payment or transfer made through Lumon.

We’re here to help

At Lumon, we’re here to help streamline your cross-border transfers. Our dedicated currency specialist can show you our range of products, which are made to help you secure a bank beating exchange rate.  

Sources used:

1European Central Bank – Single Euro Payments Area (SEPA)

2European Payments Council – EPC list of Countries in the SEPA Schemes’ Geographical Scope

3European Payments Council – SEPA Credit Transfer (SCT)

4European Central Bank – SEPA Instant Credit Transfer

5SEPA Direct Debit – What we do SEPA Direct Debit

Sources last checked on date: 30/01/2024

The information provided in this material is accurate to the best of our knowledge at the time of writing 30/01/2024, but it is subject to change. The content is for informational purposes only and does not constitute tax advice. It is essential that individuals seek advice from professional services regarding tax matters. We do not accept liability for any errors or outdated information, and individuals should not rely on the information presented without consulting an expert.

Competitive exchange rates

We pride ourselves on being able to offer exchange rates that can save you money compared to the banks, helping your international payments go further.

We keep your funds safe

Protecting your money is our highest priority. When working with Lumon you can rest assured that our customer-centric service is reinforced by robust security measures.