SEPA 101

SEPA, its history, and its members

Victor Mithouard
September 2022
min read

Since 2008, the Single European Payments Area (SEPA) has made euro-denominated bank payments simpler and faster. In 2021, SEPA payments accounted for more than 95% of all bank-based payments in the European Union, with the SEPA zone now including 36 countries.

But what exactly is SEPA and what is its history? In this article, we will outline what SEPA is, how SEPA came into being, and explain how SEPA works.

Introduction to SEPA

SEPA is a single payment area that uses the euro as its single currency. Four SEPA payment schemes are used to send and receive different types of euro payments from one bank account to another.

SEPA was introduced for credit transfers in 2008, direct debits in 2009, and instant credit transfers in 2017. Credit transfers (regular and instant) are used to send a payment from account A to account B. Direct debit is used to debit money from a third-party account B and credit it to account A, based on the authorisation granted through a direct debit mandate signed between the debtor and the creditor.

The development of SEPA is part of the mandate of the Eurosystem, a group composed of the European Central Bank (ECB) and national central banks of other eurozone member states. National central banks make the necessary market infrastructure available to the banks in their respective countries. 

The European Payment Council (EPC) specifies the payment schemes used by payment service providers (PSPs) and operated by clearing and settlement mechanisms (CSMs). The EPC is not a regulator and does not have a mandate from the EU or any other political, legislative, or regulatory institution, but rather represents and defends PSPs in front of European institutions, such as the ECB.

SEPA member states

As of September 2022, the SEPA spans across 36 European countries, including:

  • The 27 countries members of the European Union (EU) are also SEPA countries

  • 4 members of the European Free Trade Association (EFTA) (Liechtenstein, Norway, Iceland, and Switzerland)

  • 4 microstates with special arrangements with the EU (Andorra, Monaco, Vatican City, and San Marino)

  • The United Kingdom after it left the EU in 2020

CountryIBAN/BIC codeCurrencyCategory
AustriaATEUREU member
BelgiumBEEUREU member
BulgariaBGBGNEU member
CroatiaHRHRKEU member
CyprusCYEUREU member
Czech RepublicCZCZKEU member
DenmarkDKDKKEU member
EstoniaEEEUREU member
FinlandFIEUREU member
FranceFREUREU member
GermanyDEEUREU member
GreeceGREUREU member
HungaryHUHUFEU member
IrelandIEEUREU member
ItalyITEUREU member
LatviaLVEUREU member
LithuaniaLTEUREU member
LuxembourgLUEUREU member
MaltaMTEUREU member
NorwayNONOKEU member
PolandPLPLNEU member
PortugalPTEUREU member
RomaniaRORONEU member
San MarinoSMEURMicrostate
SlovakiaSKEUREU member
SloveniaSIEUREU member
SpainESEUREU member
SwedenSESEKEU member
UKGBGBPRetained membership

Of the 36 countries in the SEPA zone, 14 do not use the euro as their official currency. Only the payments sent and received in euro in these countries can be made as SEPA payments. Payments sent and received in local currencies to and from these countries use other local or international payment schemes and are not SEPA payments.

How SEPA works

SEPA payments involve and require the active involvement of account holders, payment service providers (PSPs), clearing and settlement mechanisms (CSMs), and the European Central Bank (ECB).

A SEPA payment is a euro movement from one account held by a PSP in the SEPA zone to another PSP in the SEP. The payment can be initiated and pushed from the debtor account (credit) or pulled from another account (debit).

PSPs are responsible for sending and receiving payments as well as holding the debtor’s and the creditor’s accounts, that is to say, increasing and decreasing their respective balances. Historically, banks were the only PSPs participating in the SEPA. However, the evolution of European regulations through directives such as EMD2 (2009), PSD1 (2007), and PSD2 (2016) directives enabled a new generation of PSPs to emerge.

CSMs are responsible for clearing and settling the payments between PSPs, with settlement occurring through PSP accounts held by the ECB.

History of SEPA

The origins of SEPA are tightly linked to the formation and strengthening of the European Community and the European Union. SEPA aims at simplifying, harmonising, and accelerating payments across SEPA members, by using the euro as a single currency and by leveraging standardised payment schemes.

Here are the key dates of the eurozone and SEPA payments since their inception in 2008.

Learn more about SEPA

We’ve outlined some of the basic principles around SEPA. View the other articles in our SEPA blog series for more details on:

Ready to integrate SEPA into your payments operations? Get in touch with a Numeral Payments Advisor now to see how easy the Numeral API is to handle SEPA payments.

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