About SEPA

What is SEPA

SEPA (Single Euro Payments Area) is a major step towards a single integrated Euro payments market. Its aim is to allow companies, public authorities and individuals to issue and receive payments within countries of the SEPA zone, as swiftly as local payments can be processed today. SEPA covers the new electronic payment methods: SEPA Credit Transfers (SCT) and SEPA Direct Debit (SDD).

Since the 1st of August 2014, the local country credit transfer and direct debit schemes in Euro countries have been totally phased out. The only exceptions are niche products and specific waivers declared by some countries giving them time until the 1st of February 2016 to be compliant.

For Non-Euro countries, the deadline to use SCT/SDD – ISO 20022 XML for all Euro-payments has been scheduled for the 31th of October 2016.

Implementation of SEPA is transforming the European payments environment and impacting corporate activities and organisations. In order to comply with the new European regulation, corporates’ IT systems and internal procedures have to be aligned with the SEPA standards.

SEPA Geographical Scope

As Europe is evolving, the SEPA will continu to expand. Currently its scope comprises the following countries:

Austria Liechtenstein 
Belgium Lithuania 
Bulgaria Luxembourg 
Croatia Malta 
Cyprus Monaco 
Czech Republic Netherlands 
Denmark Norway 
Estonia Poland 
Finland (including Åland Islands)Portugal (including Azores, Madeira)
France (French Guiana, Guadeloupe, Martinique, Mayotte, Réunion, Saint Barthélemy, Saint Martin -French part-, Saint Pierre and Miquelon)Romania 
Germany San Marino 
Greece Slovakia 
Hungary Slovenia 
Iceland Spain (including Canary Islands)
Ireland Sweden 
Italy Switzerland 
Latvia United Kingdom (including Gibraltar, Guernsey, Jersey and Isle of Man)

Looking for more information about the specific case of the French communities? Consult our FAQ!

SEPA Migration in non-Euro countries

The SEPA migration involves payments in Euro, which must be transmitted in XML format if they are to be treated as SEPA transactions. The SEPA rules do not concern  credit transfers processed via high-value clearing systems, the result of which is that current international schemes will coexist alongside SEPA.

However, this does not mean that no action need be taken. Outside the Euro zone, several countries are also planning to move domestic transactions to XML, adapting the SEPA schemes to their own instruments. For instance, Switzerland will move towards full XML for payment initiation and processing by the end of 2018. Another example is Romania, which has developed a domestic direct debit scheme, RON, fully aligned with the SDD scheme.

In addition, most communities are using the SEPA migration as an opportunity to integrate local credit transfers within the ISO20022 standards.

What's next?


Future evolutions of the SEPA Schemes

While SEPA is based upon established law, the EPC Rulebook, which define the rules to be applied for all SEPA schemes are in constant evolution. Each year, the EPC publishes a new rulebook, which can have a minor or a significant impact on banks and corporates.

Consult the FAQs if you have any questions on the November 2016 rulebook.


Towards a full XML landscape

ISO20022 XML adoption is an international topic. SEPA migration has brought a global format to Euro payments, but the goal in Europe is clearly to go further than that. The European RTGS, Target2, will also migrate to the XML format in the future, allowing end-to-end payment processing in XML. 

XML initiation and reporting allows corporates to support a single format for all their entities. In addition, the flexibility of the format permits banks such as BNP Paribas to offer wider choice in product selection at the initiation stage, and provides greater functionality on the reporting side.

Using SEPA: towards a more powerful treasury centralisation

Some multinationals go beyond the standardisation afforded by SCT and SDD. They centralise their accounts payable operations in shared service centres, sometimes outsourced to third parties. In certain cases, they also centralise all the collection accounts within a particular SEPA country. these types of account structures offer unparalleled harmonisation of both collection processes and cycles, and are sometimes referred to as collection factories.

By providing customised packages and advisory, banks are now increasingly better-placed to help corporates optimise their cash management structures.


To be able to use the SDD scheme, creditors have to collect a mandate duly completed and signed by the debtor. Avoiding the need for a physical signature by the debtor and the archiving of paper mandates, e-mandates can be completed and signed electronically by the debtor.

The objective of e-mandates is to replace the paper in the Mandate flow, allowing a debtor to issue, amend and cancel a Direct Debit Mandate electronically, while the collection process stays the same as in the existing SDD scheme.

The e-mandate brings many advantages to creditors and debtors:

  • fully automated end-to-end processing of mandates, including issuing, amendment and cancellation, to the benefit of both debtors and creditors;
  • reduction in paper files and archiving;
  • improvement of the current manual process of mandate registration, which has previously slowed the activation of SDD B2B mandates;
  • the possibility to perform a complete check on the debtor’s account and on the debtor’s powers.

MyBank, a pan-European initiative run by EBA Clearing, is an e-authorisation solution which enables safe digital payments and identity authentication, and is currently at pilot stage.

Interested in the possibility of implementing e-mandate across Europe today? Please consult our FAQ.

Our expert answer to your questions

What is the difference between SEPA direct debit core and SEPA direct debit B2B schemes?

  • The SEPA direct debit Core scheme is used for all types of debtors whereas the B2B scheme is designed for businesses only; the payer must not be a private individual (consumer).
  • The Core scheme grants the payer an unconditional refund right for 8 weeks after the due date; however, such rights are not granted by the B2B scheme.
  • The SDD B2B scheme requires the payer's bank to ensure that the collection is authorised by checking the collection against mandate information. If a payer does not confirm to his bank the first transaction of a B2B mandate, his bank is entitled to reject the transaction.
  • The reachability of banks is lower for B2B than for Core. This difference may vary from country to country, and could lead creditors to propose both schemes in order to ensure a sufficient coverage.
  • Finally, timeline for presenting collections to a creditor’s bank vary. The SDD Core scheme allows for at least 5 days before the due date for a first/one-off collection and at least 2 days for a recurrent/last type, whereas the SDD B2B requires all collections to be sent at least 1 day before the due date.

What is mandate management?

Mandate management is the processing and administration of mandates, i.e. authorisations for collection instructions. The old legacy mandates (which have migrated to SEPA mandates) are stored by the creditor. SEPA (paper-based) mandates are signed by the payer/debtor. Following this, the SEPA mandates can be dematerialised by the creditor and sent as an electronic debit instruction to the bank of the debtor, which will include mandate-related information.

For the processing of SEPA direct debit B2B mandates, SDD mandate authorisation (provided by the debtor) must be registered by the debtor bank in time for the first direct debit.

Is it possible to use SEPA services in non-Euro countries?

Yes. Although SEPA will only support transactions denominated in euro, between two accounts hold in two SEPA countries, most banks in the 34 SEPA countries can offer the service to their clients. The non-Euro countries are SEPA countries.