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Taking payments in Europe with SEPA - an introduction for US businesses

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Last editedOct 20202 min read

For US companies, the prospect of getting set up to receive payments from clients across Europe may seem complex. For companies already doing so, chances are the method they’re using is not as cost-effective, convenient, or streamlined as it could be.

With so many different cultures, languages and regulations, expanding your business across Europe can feel daunting for US businesses.

Diverse payment preferences

When asking customers in Europe to pay you, there are a range of payment preferences you should keep in mind. For example, research has shown that credit cards are unpopular in some countries, such as France. Thirteen nine percent of French respondents to a recent survey said they were ‘very uncomfortable’ using credit cards for subscription payments. In Germany credit card use is also unpopular.

Sometimes there are cultural or historical reasons why certain payment methods are preferred, or not. Many payment methods come with high transaction fees, bank levies, and a poor user experience. In addition, customers in many European countries don’t consider credit cards to be a standard payment method, and companies should be aware of this when making European expansion plans.

Fortunately, there’s another way for US businesses to take payments from European customers. It's called SEPA, a bank debit scheme that covers many European countries. SEPA is very similar to the ACH payments scheme in the US.

SEPA makes sense in Europe

In recent research conducted in France, Germany and Spain, over one third of customers surveyed said they felt most comfortable paying for subscription services using a bank debit method, such as SEPA, (as opposed to cards or PayPal). With SEPA already well-established across Europe, it makes perfect sense to offer it as a payment option for your European customers.

SEPA, which stands for the Single European Payments Area, is a lot easier than you might expect. SEPA aims to harmonize and debit payments across Europe, making them simple and cheap by creating a single market for Euro-denominated payments.

Customer case study

One of our merchants, Sage, chose to use SEPA via GoCardless to help it consolidate payment collections in one place, while reducing operational overheads and administrative costs. Sage currently takes payments from customers in Spain, France, Germany, and Ireland. Using SEPA also allows Sage to offer a wide range of choices for its customers. A representative of Sage said:

“It’s always important that we give our customers as much payment choice for our products as possible; this will always mean that we look to take the regional debit payment choice.”

The rise of SEPA

While bank debit has been used in Europe for many years, each country had separate schemes. SEPA , which came fully into force in August 2014, changed this. With SEPA, businesses only need to use one scheme to take payments from customers across most of Europe. That significantly cuts down on administration, compliance, and so cost.

SEPA is particularly useful for regular invoicing and subscriptions. It’s a popular choice for recurring payments as it’s low-cost, safe, and convenient. And what’s more, customers in most European countries are already familiar with the SEPA name and how it works.

Learn more about international payments with GoCardless

Learn more about international payments with GoCardless


How do I get started with SEPA?

It’s really simple to start taking SEPA payments from your European customers with GoCardless. Our international payments platform means you no longer need a separate bank account in every country you want to take payments in. You can control everything from your domestic US account, and you don't even need to worry about FX as that's part of our service. Or if you prefer to keep payments in the currency you collect them in, we can quickly set-up a foreign bank account for you. GoCardless handles all banking relationships on your behalf as part of our service, for no extra charge. We’ll also handle all the complex legislation and compliance procedures for you, making the process of setting up European payments super-smooth and convenient. 

Once you get in touch with us, we’ll go through the whole setup process for you, and enable you to start using it straight away. With SEPA, funds will usually be received five working days from when the payment is created.

How much does it cost to take payments in Europe?

We offer three pricing plans: Standard, Plus, and Pro, with a range of features to suit your needs. For full details on pricing, please see our pricing page, or contact our sales team to discuss further.

Talk to our US payment consultants about how to expand your business abroad.

Talk to our US payment consultants about how to expand your business abroad.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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