If you have a bank account in a SEPA country, you can freely and easily transfer money to other SEPA bankaccounts. SEPA stands for the Single Euro Payments Area and there are 36 SEPA countries. As of 2019 the banks are implementing instant banktransfers ("Instant SEPA"), which enables money transfers within 10 seconds.
As of 2019 sepa country list 2019 countries include all 28 member states of the European Union, plus Switzerland, Iceland, Norway, Liechtenstein, Andorra, Monaco, San Marino and Vatican City. Over 500 million people can send and receive payments under the same rights and conditions irrespective of their location. To transfer funds to or from a SEPA country, all you need is an IBAN (International Bank Account Number) and the amount that you want to transfer.
- 1 What are SEPA payments?
- 2 When did SEPA start?
- 3 SEPA countries list
- 4 SEPA credit transfer versus SEPA debit transfer
- 5 European Payment Council
- 6 Opening a non-resident bank account in Europe
- 7 Opening a non-resident bank account in Europe for non-Europeans
- 8 What is a virtual bank account?
- 9 References
What are SEPA payments?
SEPA is a payment system that makes it easy for banks to transfer money in EUR denomination. The payment system is free and has boosted business within Europe. If you or your business are not inside the SEPA zone you can still benefit from the possibilities of SEPA by opening a virtual bank account with for example Transferwise, Payoneer or other providers. With such an account, it is possible for a person in Europe to receive and send money in Euros with very low fees.
When did SEPA start?
Credit transfers in Europe were introduced in January 2008 while direct debits were introduced in 2010. This made inter-border transfers easy and efficient thus making it a competition. In 2014 SEPA handled 99.9 percent direct debits, 99.4 percent credit transfers and 79.2 percent card payments within Europe.
SEPA countries list
Here's a list of SEPA zone countries, including codes used for BIC, IBAN and the country's currency.
|Isle of Man||IM||GB||GBP|
|Saint Martin (French part)||MF||FR||EUR|
|Saint Pierre and Miquelon||PM||FR||EUR|
SEPA credit transfer versus SEPA debit transfer
Despite having the same name, direct debit and SEPA credit transfer are very different. SEPA is a European scheme that aims to standardize payments in the markets of the European Union.
SEPA credit transfer
In SEPA credit transfer, money is transferred in the form of Euros. It transfers cash from one bank to another by the use of IBAN codes. It is used as a onetime payment method by customers for payment of goods and services.
SEPA debit transfer
SEPA debit also uses Euros but it is not a onetime payment method. It is a recurring payment method. The one paying has to authorize payment by providing information about the bank account name and number, IBAN and BIC. The payee has to retain the authorization of the recurring payment. The authorization can either be in electronic or in paper.
The debit transfer can be set to make recurring payment for a specific number of times or indefinite payment until the authorization is canceled. The set up is done between the customer and the business or between two businesses. For instance, it can be set to pay monthly rent, electricity bill or other recurring payments.
European Payment Council
SEPA credit and debit transfers are controlled by the European Payment Council. It is a way of improving international payment processing within SEPA countries. To be authorized to use SEPA debit and credit, participants for the SEPA scheme are required to present themselves.
Opening a non-resident bank account in Europe
Even without a registered business in Europe, you can still create a non-resident bank account. Non-resident bank accounts are better than normal accounts. One gets a free IBAN which makes it easy for one to receive payment from SEPA countries.
With a non-resident bank account, you can get the services you need without any hassles of dealing with a normal bank account. If you want a bank account in Europe as a non-resident, you will need to use internet banking.
Opening a non-resident bank account in Europe for non-Europeans
If you are not a resident in Europe and you want to open a bank account, you can open one remotely without being physically there. The process requires a lot of documentation. However, not all member states allow for remote bank account opening.
Among the countries that allow for remote bank opening are Latvia, Cyprus, Bulgaria, Luxemburg and Malta. The process might force you to be there physically to make the process easier.
Other good options are Payoneer and Transferwise Borderless.
A Payoneer account is relatively easy to open, including for residents of countries such as Pakistan. With it you can get a EUR virtual account in the SEPA zone, but also a USD account in the US Fees can be high though and the interface is not the most modern anymore.
Transferwise Borderless feels much more lean, but is not as widely available yet. Costs are very low and it's great for transferring and converting freely convertible currencies, even to some countries in Africa, for example with Transferwise it can take less than 30 minutes to transfer money to Kenya. Transferwise Borderless is available to both individuals as well as corporations and comes with a free credit card.
What is a virtual bank account?
A virtual bank is a bank account that one gets without physically visiting the bank premises. You do not need a lot of paperwork. However, the virtual bank account is regulated by the European Union and the national authorities making your funds secure. A virtual account is networked with many banks making it seem like having many banks in one.