SEPA Payment: What It Is and How It Works

A SEPA payment lets a UK business pay a euro invoice across much of Europe using a shared payment scheme, rather than through an alternative such as SWIFT. But how exactly does it work and how does it compare to alternative methods of payment to Europe?

Read on to learn the answers to these questions and more in this essential guide to SEPA payments.

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SEPA payments at a glance

What is a SEPA payment?

SEPA stands for Single Euro Payments Area. According to the European Payments Council's explanation of SEPA, the schemes cover 41 countries and territories and were created to make electronic euro payments across Europe as easy and convenient as domestic payments.¹

The main business route is a SEPA Credit Transfer, or SCT. A credit transfer moves money from one payment account to another. The European Payments Council's SEPA Credit Transfer information explains that SCT payments are made in euros and can be one-off, recurring, single or bulk payments.²

That makes SEPA useful for:

• Supplier invoices
• Contractor and freelancer payments
• Rent and retainers
• Software subscriptions
• Customer refunds
• Regular euro payment runs
• Bulk payments to multiple beneficiaries

SEPA is a payment scheme rather than a bank account or card. Both the sending and receiving payment service providers need to support the relevant scheme for the payment to use that route.²

What information do you need to make a SEPA payment?

Before opening your bank or business-account payment screen, collect:

• The recipient's legal name
• The recipient's IBAN
• The payment amount in euros
• The invoice number or payment reference
• The recipient's address if your provider requests it
• The BIC or SWIFT code if your provider asks for it
• Your internal approval or purchase-order reference

The IBAN is the main account identifier for the payment. According to the European Payments Council's information on payment standards, IBAN and BIC are based on international standards and help payment providers identify accounts and exchange payment data.³

Check the recipient details against the original invoice or supplier portal. Avoid retyping an IBAN from a screenshot, and verify any changed bank details through a trusted contact route.

The payment reference matters too. It helps the recipient match the funds to the right invoice and gives your finance team a cleaner reconciliation trail. If your provider supports extended remittance information, use the available space sensibly rather than leaving the reference as “payment”.⁴

How to make a SEPA payment

The menu names vary between banks and payment providers, but the workflow is usually similar:

1. Log in to your bank, payment provider or business account
2. Choose the euro, international or SEPA transfer option
3. Enter the recipient's legal name and IBAN
4. Add the BIC or SWIFT code if your provider requests it
5. Enter the amount in euros
6. Add the invoice number or agreed payment reference
7. Check the exchange rate, fee and estimated delivery date
8. Confirm the payment using your provider's security step
9. Save the confirmation and payment reference
10. Reconcile the payment against the invoice once it has been sent

If you are paying from a GBP balance, check how your provider converts GBP to EUR before you confirm. If you already hold euros and the provider allows you to pay from that balance, using the existing EUR balance may avoid an additional conversion at the point of payment.

For a new supplier or a high-value invoice, separate payment preparation from approval where possible. The payment route can be simple while the underlying payee controls still need to be thorough.

How long does a SEPA payment take?

There isn't one universal delivery time for every SEPA payment. Timing can depend on:

• Whether you use standard SEPA Credit Transfer or SEPA Instant
• Your provider's cut-off time
• Weekends and public holidays
• The sending and receiving providers
• Whether the payment is rejected, returned or held for a review

For an ordinary supplier invoice, send the payment before the due date and use the provider's displayed delivery estimate. A standard SEPA payment may be suitable when the recipient doesn't need the money immediately.

SEPA Instant Credit Transfer is a separate scheme. The European Payments Council's SEPA Instant Credit Transfer information describes SCT Inst as a pan-European euro credit-transfer scheme that can make funds available in less than ten seconds, including outside traditional banking hours, where the route is supported.⁵

Don't assume that every account, provider or payment corridor supports SEPA Instant. Check availability for the specific beneficiary before promising an immediate payment.

SEPA Credit Transfer vs SEPA Instant vs SWIFT

SEPA and SWIFT are not equivalent routes. SEPA is a harmonised payment scheme for euro transfers in its participating area. SWIFT is a messaging network used by financial institutions to communicate payment instructions across international corridors. A payment may use a different settlement or clearing route after the instructions are sent.

If a French, German, Spanish or other SEPA-area supplier has provided an IBAN for a euro invoice, check whether SEPA is available before selecting an international wire. If the currency is not EUR, the recipient is outside the relevant SEPA route or the provider doesn't support the account, another local route or SWIFT may be necessary.

Do UK businesses use SEPA payments?

Yes. The UK is part of the geographical area covered by the SEPA schemes, although it isn't in the eurozone. A UK business may need SEPA to pay:

• A eurozone supplier
• A European software provider
• A contractor or freelancer in a SEPA country
• A European landlord or service provider
• A customer who requests a euro refund

The key checks are the currency, destination, recipient IBAN and the route supported by your bank or payment provider. A UK business can send a SEPA payment from a GBP account if its provider supports the conversion and euro transfer, or from an existing EUR balance where available.

If your business receives euros as well as paying them out, consider whether holding an operational EUR balance could make the workflow easier. You may be able to use incoming euros for eligible outgoing euro payments instead of converting every receipt into GBP and later converting GBP back into EUR.

What does a SEPA payment cost?

The total cost depends on your bank or payment provider, the currency conversion, the account you pay from and the specific route. Check:

• The provider's visible transfer fee
• The GBP-to-EUR exchange rate if conversion is required
• Any account or plan fee
• Whether the recipient's provider can apply a charge
• The fee and delivery terms for SEPA Instant
• Any charge for a returned, recalled or amended payment

The 2025 SEPA Credit Transfer rulebook describes charging principles for the scheme, but your commercial price still comes from the bank or payment provider you use.⁴ Don't compare only the headline transfer fee when you are converting GBP to EUR. Check the full amount that leaves your account and the amount the recipient is expected to receive.

Common SEPA payment mistakes

Sending the wrong currency

SEPA Credit Transfer is a euro route. If the invoice is in GBP, USD or another currency, check whether SEPA is appropriate before sending.

Using SWIFT when SEPA is available

An international invoice doesn't automatically need an international wire. If the payment is in euros and the recipient's account is reachable through SEPA, that route may be simpler to reconcile.

Omitting the invoice reference

A missing or vague reference can create avoidable supplier emails and manual matching. Put the invoice number first, followed by your internal reference if space allows.

Reusing unverified beneficiary details

Save time with approved beneficiary records, but verify changes to an IBAN or account name through a trusted route. Don't treat an email requesting new bank details as sufficient confirmation.

Assuming every payment is instant

Standard SEPA Credit Transfer and SEPA Instant are different schemes. Check which route your provider is offering and when the recipient should expect the funds.

Converting without checking the rate

If you pay from GBP, review the exchange rate and fee before confirming. If you regularly receive and pay euros, consider whether holding EUR could reduce repeated conversions.

SEPA payment checklist

Before sending a SEPA payment, check:

• The invoice is payable in euros
• The recipient's country and account are reachable through the route
• The legal name and IBAN match the supplier record
• Any BIC requirement has been met
• The invoice number is in the payment reference
• The exchange rate and fee are clear
• The delivery estimate fits the due date
• Any new beneficiary or changed IBAN has been verified
• The payment has the required approval
• The confirmation is saved for reconciliation

Example SEPA payment scenarios

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FAQs

Can I make a SEPA payment from a UK business account?

Yes, provided your bank or payment provider supports euro SEPA transfers and the recipient's account is reachable through the relevant scheme. The UK business doesn't need to be located in the eurozone to make a supported SEPA payment.

Is SEPA the same as an international bank transfer?

No. SEPA is a euro payment scheme for participating accounts. An international bank transfer is a broader description that may involve other currencies, payment routes, messaging networks and intermediary institutions.

Can a SEPA payment be cancelled?

Contact your bank or payment provider immediately if you sent a payment in error. A cancellation or recall may be possible in some circumstances, but recovery isn't guaranteed once the payment has been processed.

Do I always need a BIC for a SEPA payment?

Not always. Some providers can route a SEPA payment using the IBAN, while others may request a BIC in specific situations. Follow the fields and instructions shown by the provider handling the payment.

Can I receive SEPA payments as well as send them?

That depends on the account and provider. Check whether the account gives you EUR receiving details and whether incoming SEPA Credit Transfers are supported before using it on customer invoices.

Sources:

1. The Single Euro Payments Area explained
2. SEPA Credit Transfer
3. The EPC SEPA schemes use global open standards that are the languages of payments processing
4. SEPA Credit Transfer Scheme Rulebook
5. SEPA Instant Credit Transfer

Sources last checked on 6th August 2026