In summary, SEPA (Single Euro Payments Area) is a transfer method for making payments across Europe in euros. Payments sent using SEPA are usually free, and will be received within 0-2 days.
For UK customers needing to send payments outside of Europe or in other currencies, the most common alternative is SWIFT. While SWIFT supports global transfers, it can be slower and usually involves higher fees than SEPA.
Six facts about SEPA
SEPA stands for Single Euro Payments Area
SEPA is a payments initiative created by the EU, designed to simplify bank transfers in euros
SEPA transfers are only available when converting money to euro
SEPA includes all 27 EU countries, plus a handful of non-EU countries too
SEPA payments usually take 0-2 business days to process
SEPA payments are generally free
SEPA transfer costs
While SEPA transfers usually incur zero transaction fees, it's important to remember the role of exchange rates in the cost of an international transfer.
It's not that interesting saving £20 on transaction fees if your exchange rate ends up costing you thousands.
If you make a £10,000 to EUR international transfer with Co-operative Bank, you won't be charged a SEPA transaction fee.
Great news, thanks SEPA!
However, the issue was never the transacton fee.
Co-operative Bank will charge 4% to convert the funds, which works out at a £400 exchange rate fee.
So before you think any SEPA transfer is guaranteed to be a good deal, remember that transaction fees can be a tiny part of the overall cost.
SEPA Instant Credit Transfer
SEPA also offers an instant transfer method called, creatively, Instant Credit Transfer.
These transfers have an initial maxiumum duration of 10 seconds, and a maxiumum amount of 100,000 euros. The system runs 24/7 - all night long, on weekends and bank holidays.
As described by Quanloop, there have been challenges with adoption, with the regular SEPA protocol remaining the dominant version in the UK.
