What is SEPA?
SEPA (Single Euro Payments Area) is the European Union initiative that unifies euro payments across 36 countries, making a transfer or direct debit between Madrid and Berlin as simple, fast and cheap as one within a single country.
This guide explains what SEPA covers, which countries belong to it, the payment types it includes and how it impacts companies and individuals in 2026.
TL;DR
- SEPA standardises transfers, direct debits and card payments in euros.
- It covers 36 countries: the 27 EU member states plus the United Kingdom, Switzerland, Norway, Iceland, Liechtenstein, Monaco, San Marino, Andorra and Vatican City.
- It uses IBAN and BIC as standard identifiers.
- It has a standard variant (one business day) and an instant variant (seconds, 24/7).
- It is governed by the European Payments Council (EPC) and EU Regulation 260/2012.
SEPA payment types
| Type | Scheme | Typical use |
|---|---|---|
| Standard credit transfer | SCT (SEPA Credit Transfer) | Supplier payments, payroll, refunds |
| Instant credit transfer | SCT Inst | Urgent payments 24/7 between SEPA accounts |
| Direct debit (consumer) | SDD CORE | Recurring collections from individuals and companies |
| Direct debit (corporate) | SDD B2B | Inter-company collections with stronger protection |
| Card payments | SEPA Cards Framework | Cards issued within the SEPA zone |
SEPA files follow the ISO 20022 standard and are delivered to banks as XML in the pain.001 (credit transfer) and pain.008 (direct debit) schemas.
SEPA countries
The SEPA zone covers 36 countries in three groups:
- EU with euro (20): Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain.
- EU without euro (7): Bulgaria, Czechia, Denmark, Hungary, Poland, Romania, Sweden.
- Non-EU members: United Kingdom, Iceland, Liechtenstein, Norway, Switzerland, Monaco, San Marino, Andorra and Vatican City.
See the full list of SEPA countries with explanation for details.
How SEPA works under the hood
When you order a SEPA transfer, your bank generates an ISO 20022 message that travels through a Clearing and Settlement Mechanism (CSM, e.g. EBA Clearing’s STEP2) to the beneficiary’s bank. The identifiers that make it possible are:
- IBAN (ISO 13616): identifies the beneficiary account.
- BIC (ISO 9362): identifies the receiving bank (optional in most SEPA operations since 2016).
- Creditor identifier (in direct debits): identifies the entity collecting funds.
For a recurring collection to be valid, you also need a SEPA mandate signed by the debtor — learn more in our SEPA mandate article.
SEPA Instant (SCT Inst): the next generation
SCT Inst allows you to move up to €100,000 between SEPA accounts in under 10 seconds, 365 days a year. Since October 2025, EU Regulation 2024/886 requires every euro-area bank to offer it at no extra cost compared with a standard transfer.
How SEPA affects you
- As an individual: a single IBAN works for receiving payroll, paying rent abroad or setting up Netflix as a direct debit.
- As a business: you can issue payroll, collect from clients across Europe and pay suppliers with a single file format. To generate that file from an Excel or CSV, use GenerateSEPA.
FAQ
See the FAQ block at the end of this article for the quick answers.
Conclusion
SEPA is the backbone of euro payments. Understanding the identifiers it uses (IBAN, BIC, creditor identifier) and the schemes it defines (SCT, SCT Inst, SDD CORE, SDD B2B) lets you collect and pay across Europe with the same ease as within a single country.
