How Does SEPA Affect Currency Transfer?
At CurrencyFair we’ve been getting a few questions about the SEPA changes that will be coming through soon so we thought we’d give you a quick outline of the changes and what they mean for people sending money to and from the Euro zone.
We’re going to explain SEPA, tell you about a handy SEPA calculator, and show you a quick video if you need more information.
Let’s start with the obvious question . . .
What Is SEPA?
- SEPA stands for Single Euro Payments Area and, whilst it has been phasing in over time, the deadline was 1 February 2014.
- The idea of SEPA is to make it easier to transfer money and electronic payments between the countries within the SEPA area.
- This means a smoother, borderless payments zone.
- In other words, it should be just as easy to send money from London to Rotterdam as it is to send money from London to Birmingham.
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Slovakia, Spain, Sweden, Switzerland and the United Kingdom.
What Does SEPA Mean For Individuals?
The European Commission
says that SEPA will bring consumers a number of benefits:
Use a debit card anywhere in the euro area – No need for credit cards lots of cash when on holidays.
Better cross-border bank transfers: you can already transfer money within the euro area, but often this takes a long time and costs more. SEPA will guarantee that your euro payments are made promptly and in full. Your payment should be received within a guaranteed time, and banks will not be allowed to make any deductions of the amount transferred. You will also receive simple and clear information on any charges or fees applicable.
Direct debits from anywhere in the euro area – Very handy for paying a regular bill (such as the electricity bill) when you’re away working in another SEPA country.
Only one bank account needed for the whole euro area: SEPA will make things much easier if you are working or studying abroad in another euro area country, especially on a temporary basis. In some euro area countries, the annual cost of running a bank account can be as much as EUR 250, compared to only EUR 30 in others. More competition between banks will help to drive down these inflated costs.
Transparent pricing and no hidden charges: banks will have to tell you exactly what they are charging you for, and hidden charges should disappear, such as hanging on to your money before adding it to your account, or crediting money to your account but allowing you to use it only after a certain date, which can mean inconvenience and loss of account interest for you.
UPDATED November 2017: Starting 21 November 2017, instant SEPA payments of up to 15,000 euros within 10 seconds. (optional participation for PSPs). Read more about this update here
What Do I Need To Know About SEPA Bank Transfers?
First thing you need to know is this: CurrencyFair has been handling SEPA transfers since we began so there is nothing for you to worry about if you are a CurrencyFair customer – you won’t need to change a thing.
If you’re not with CurrencyFair (hey, why aren’t you?), the following information will help you:
- SEPA will mean the introduction of Bank Identifier Codes (BIC) and International Bank Account Numbers (IBAN) across the SEPA zone.
- When SEPA takes effect, you will need your International Bank Account Number (IBAN) and the Business Identifier Code (BIC) whenever you want to send or receive money in the SEPA zone.
- The only exception is the UK where you may be given the option to use Sort Code and bank account number.
- To find your IBAN and BIC, just contact your bank or look at your bank statement.
Even better, click here to check out this handy website which will help work out your IBAN number.
For further information, take a look at this official EU video: