What is the Single Euro Payments Area (SEPA)

Developing measures to stimulate the European economy is part of the daily work of the Union leaders and bodies. One of the most important ones is the implementation of SEPA. What is it and how does it affect our daily lives?

The arrival of the Euro broke down one of the main barriers to fostering economic activity between EU countries, as well as the clear benefits for people travelling within the EU without the need to exchange currency.

This was undoubtedly a huge step forward in terms of achieving EU economic unification, but there is more. A few years later, the Single Euro Payments Area (SEPA) started to develop, and we are going to discuss its most important aspects.

What is SEPA?

SEPA is the Single Euro Payments Area, which implies another step forwards in the effort to achieve the European Digital Single Market.

This will allow citizens and institutions of the member countries to make both retail payments and collections under a homogeneous regulation, increasing both security and confidence when dealing with economic transactions.

SEPA was an initiative of the European Payments Council (EPC) and covers the 27 member countries of the Union plus the United Kingdom, Iceland, Liechtenstein, Norway, Switzerland, Monaco, Andorra and San Marino.

Why was SEPA founded?

SEPA aims to facilitate retail payments, so that maximum benefit can be derived from a single European currency, as well as to foster innovation and entrepreneurship.

SEPA made retail payments within the European Union easier, as TARGET and TARGET2 did in the past, and it’s intended for large payments by the central banks of each country.

In addition, SEPA prevents EU companies from opening bank accounts in each of the countries of the Union, and removes the barriers posed by domestic laws.

To know its origins, we must go back to 2004, when its early stages began; from 2006 to 2007, the required instruments, standards and infrastructures were implemented and tested; and the last stage, the SEPA Migration, started in 2008 and ended in 2016, and has been compulsory ever since.

What are the benefits of SEPA

SEPA has provided a lot of benefits for citizens, companies, banks and public institutions when completing transactions:

  • Makes payments to other countries in the SEPA zone easier
  • Avoids the need to open a bank account in another country
  • Companies make their payment systems simpler
  • It will boost e-invoicing and fintech services
  • Greater competition within the companies of the sector

We can start by focusing on the positive impact it has on ordinary citizens. When it comes to paying other countries within the SEPA zone, things will be as if we were paying within our own borders.

Those who live in another country will not need to open a bank account or use a different credit card to pay there (e.g: rent or electricity, water or telephone bills, etc.)

Centralization of bank accounts also bring benefits to companies, simplifying payment management with consequent savings in time and resources.

SEPA will also boost the development of services like e-invoicing, mobile and internet payments.

Finally, it is to be noted that infrastructure providers and payment card processors (either credit or debit cards) will be able to work freely and homogeneously in all European countries, as well as to interact with each other thanks to interoperability regulations.

How does SEPA work?

SEPA acts mainly on retail payment areas, such as:

  1. Transfers
  2. Direct debits
  3. Payment by card
  4. Payment in cash
Persona realizando un pago online


With SEPA infrastructures for credit transfers a shared space is created for the flow of money between banking institutions of the countries adhered to the system.

For completing transfers, SEPA stipulates that the money will be deposited directly into the collector’s account, without intermediaries and with no limits on the amount. The time needed for the transfer to materialise must be 3 working days.

In the event of a refusal or return, everything is duly regulated.

Direct Debit

To understand the concept of direct debit, perhaps the easiest thing to do is to put the case of direct debit receipts to be paid regularly, although they can also be used for payments made occasionally.

SEPA direct debits share the above-mentioned features of credit transfers, except for time limits set, which are 5 working days for both one-off and occasional payments, and 2 for the rest.

It should be noted that there are specific conditions for direct debits between companies.

Payments by card

SEPA allows you to pay with the same card regardless of the country in which you are in the Union. However, retailers still have the right to allow certain brands.

The standards defined for credit and debit cards encourages competition between card payment processors, thus benefiting users.


When we talk about retail payments, we must not forget about the flow of cash, which is undoubtedly one of the most used means of payment.

To unify the work of cash handling professionals, the SECA (Single Euro Cash Area) was created. The SECA is intended to harmonize the basic functions of the central banks of each country, which are responsible for the management of cash in each nation.

Streamlining payments is key to make both economy and the overall business more competitive. For this reason, we can look at some statistics from the European Central Bank on payments in the Union, which tell us that around 44 billion transactions were made by the retail payment system in the euro area, amounting to EUR 34 trillion.

The digital signature is a tool that helps streamline payment processes, as well as to overcome geographical, time and bureaucratic obstacles due to complex organizational charts and workflows of some companies.

That is why in Viafirma we are proud to contribute with our signature and authentication solutions to the European business growth and, consequently, to the economic and social improvement of all citizens involved.