What is SEPA and Which Countries are SEPA Countries? Let's Get to Know SEPA, the Payment System that Removes Borders

There are many different payment systems in the financial world. These payment systems may differ according to the currencies used by regions or countries. SEPA is one of these payment systems and allows payments to be made in Euros. So, what is SEPA? Which countries does it cover? Let's find out!

Cross-Border payment system: What’s the meaning of SEPA?

SEPA (or Single Euro Payment Area) is a payment system initiative that allows money to be transferred within contracting countries without extra fees. By only allowing the transfer of the Euro currency, SEPA aims to create a single financial area by increasing the efficiency of transactions between national markets. 

There are 36 countries in the payment area. Not all these countries are necessarily part of the European Union or the Eurozone. Of the 36 SEPA member states, 27 are from the European Union, 4 are from the European Free Trade Association, and another 4 are contracted micro-countries. Also even the United Kingdom left the European Union, they are still a SEPA member and allows SEPA transfers via BIC number. 

What is the aim of the SEPA Initiative?

SEPA aims to ensure that transfer and payment fees between member countries are equivalent to those within national borders. In this way, money transfers within the member countries form a single financial area and Euro transfers within SEPA can be realized much more easily. Simply, SEPA payments aim to make easy and fast Euro transfers within member states. 

SEPA initiative achieved this goal with two milestones. In early 2008, credit transfers became available in the member states, and in 2009, payment services and debit cards were launched. SEPA's technical and commercial framework was regulated by the European Payments Council (EPC). As of 2014, more than 90% of transfers and payments within the euro area are made with SEPA.

SEPA regions: What are SEPA countries?

SEPA consists of 36 countries both in the European Union and pan-European countries with different agreements. So, which are the SEPA countries? 

European Union Members

The majority of SEPA is made up of European Union countries. EU member states are divided into two different groups in terms of currency use. These groups are:

• SEPA countries in the Eurozone: Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain.
• SEPA countries outside the Eurozone: Bulgaria, Czech Republic, Denmark, Hungary, Hungary, Poland, Romania, Romania, Sweden.

European Free Trade Association (EFTA) Members

Besides the European Union, some of the SEPA members are involved in this initiative with the European Free Trade Association. These are: 

- Iceland, Liechtenstein, Norway, which signed the European Economic Area (EEA) agreement. 

- Switzerland which is a member of the European Free Trade Association and not a member of the EEA but has many bilateral agreements with the European Union. 

SEPA Member Micro-Countries

Apart from the European Union and the European Free Trade Association, there are four micro-countries that are members of SEPA. These are Andorra, Monaco, San Marino and Vatican City. These countries are SEPA members because they are bound by financial agreements with the European Union. 

United Kingdom

The United Kingdom is a SEPA country despite leaving the European Union in 2016. Even after the referendum to leave the EU, the United Kingdom continues to use the SEPA system as it continues to partner with the European Union through financial agreements. SEPA transfer in The United Kingdom are made with the BIC number.

Frequently Asked Questions About SEPA System: Here are the Answers

We have given you the information you need to know about this system, which is used by millions of people every day to transfer money abroad. Now let's answer frequently asked questions about SEPA.

Which countries does SEPA cover?

SEPA covers 36 European countries. These include the member states of the European Union, the countries of the European Economic Area, micro-countries that have financial agreements with the European Union and the United Kingdom. 

In which currency are SEPA payments made?

SEPA stands for “Single Euro Payment Area” International Euro transfers between member countries of this area are processed under the SEPA system. 

What are the advantages of SEPA payments?

SEPA offers lower costs, faster processing times and greater efficiency in cross-border payments. It also makes it possible to make payments in euros with the same speed and cost as payments within the same country. The aim is to make the area covering the member states a single financial area.

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