SEPA 101

The different SEPA payment schemes

Victor Mithouard
September 2022
min read

The first SEPA payment scheme was introduced in 2008, called SEPA Credit Transfer. Since then, SEPA’s functionality has since expanded significantly.

Today, SEPA also offers instant transfers, direct debits for consumers and businesses, and the ability to request a transfer. In this article we’ll take a look at the SEPA payment schemes as they stand today, and how the SEPA payment schemes differ.

SEPA Credit Transfer

The first SEPA payment scheme, SEPA Credit Transfer (commonly shortened to SCT) simply enables a payment sent by the debtor (or payer) to the creditor (or payee).

It has a maximum execution time of one business day and a maximum credit time of two business days, from the moment it has been instructed by the debtor to its PSP. SEPA credit transfers are only processed during business days and business hours.

There is no minimum or maximum amount. No fees can be deducted from the payment, which means that the full amount is always credited on the creditor’s account.

A SEPA credit transfer can be recalled by the originator PSP within 10 business days for technical reasons, such as duplicate sending or technical problems, and within 13 months in case of fraud.

SEPA credit transfers are used for a variety of everyday use cases, including consumer-to-consumer bank transfers, regular salary payments, and insurance disbursement payouts.

SEPA Instant Credit Transfer

SEPA Instant Credit Transfer (shortened to SCT Inst) is the most recent SEPA payment scheme. It is a much faster version of a SEPA credit transfer, with a maximum time to credit of 10 seconds. SEPA instant credit transfers are processed entirely automatically, and around the clock.

The debtor’s bank is notified by the creditor’s bank that the payment has been credited on the creditor’s account, which enables the bank to notify its customer in return. 

Unlike a SEPA credit transfer, a SEPA instant credit transfer cannot be repudiated. It cannot be cancelled and cannot be returned. It thus offers a much higher level of guarantee to the creditor.

SEPA instant credit transfers enable new use cases such as on-demand salary advances, real-time health insurance repayments, emergency payments, and secure online purchases. SCT Inst also enables companies to reduce working capital requirements and improve cash flow by collecting payments faster.

SEPA Direct Debit Core and Direct Debit B2B

SEPA direct debit payments are offered in two versions: direct debit aimed at consumers and direct debit aimed at businesses, called SEPA Direct Debit Core and SEPA Direct Debit B2B respectively

For both schemes, a SEPA direct debit is a payment pulled and debited from the debtor’s account and credited to the creditor’s account. A SEPA direct debit requires a mandate from the debtor to the creditor, which authorises the creditor to debit the debtor’s account under certain pre-agreed conditions.

SEPA Direct Debit Core is commonly used for recurring payments such as rent, utilities, software subscriptions, loan repayments, etc. The B2B scheme is commonly used for transactions between companies and with tax authorities to repay loans, pay taxes, or pay for large purchases.

SEPA Request-to-Pay

Introduced in 2020, SEPA Request-to-Pay (SRTP) is a messaging functionality that aims at facilitating account-to-account payments. It is not a payment in itself, but a way to request the initiation of a payment.

The payment initiation request is conducted over a secure digital channel and offers several payment options to payers, with the payee deciding the options for acceptance and initiation timelines.

Payment acceptance options are:

  • Accept now: the request-to-pay must be accepted immediately

  • Accept later: the request-to-pay can be accepted at a later time

Payment initiation options are:

  • Pay now: the request-to-pay must be paid by the payer immediately, at the acceptance time

  • Pay later: the payment is initiated at a later term than the acceptance time

Once received by the payer in a secure channel, the payment initiation can be rejected or accepted. If accepted, the payment will then be initiated at the agreed date. 

The aim of SEPA Request-to-Pay is to provide beneficiaries with greater control over payment collections and to facilitate accounting reconciliations. Payment initiation requests can be linked to an invoice or any other document with exact references, such as invoice numbers, payment amounts, and customer identification.

How do the SEPA payment schemes compare?

There are multiple factors to consider when choosing a SEPA scheme for a specific use case. In the table below, we summarise the key characteristics of the SEPA payment schemes:

  • Mode: Describes whether it is the sender (e.g. the customer) that initiates the payment, i.e. a payment is pushed from the debtor’s account to the creditor’s account (Push); or whether the recipient (e.g. a business) initiates the payment, pulling the payment amount from the debtor’s account to the creditor’s account (Pull).

  • Type: does the scheme initiate only a one-off payment, or does the scheme allow for automatic, recurring payments.

  • Maximum Amount: the maximum amount that can be sent using the payment scheme.

  • Maximum Credit Time: the maximum duration of time that can lapse before the payment is credited to the recipient’s account.

  • Days & Time of Operations: hours during which a payment can be initiated using this payment scheme, with business day and hours varying depending on institution and country.

  • Repudiable: can the payer request that the payment be reversed once initiated.

A single API covering all SEPA schemes

SEPA payment schemes provide flexible, cost-effective ways for companies to run their payment workflows. And with new schemes introduced by the EPC every 2-3 years, European companies have more flexibility to manage their payment workflows than ever before.

However, until recently, companies that wanted to realise the full potential of SEPA’s payment schemes needed to work closely with banking partners to implement a lengthy, custom technical integration. 

Numeral enables companies to use a single API to connect to all the SEPA payment schemes offered by their banking partners, without the need to build custom integrations. Adding a new payment scheme used to be months of difficult technical work. With Numeral, it is as easy as changing a few lines of code.

Get in contact with one of our Payments Advisors to get personalised advice on how Numeral can support your business. Or if you are interested to learn more about SEPA, you might want to download our guide to SEPA payments.

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