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What are SEPA transfers and how do they work?

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedMar 20232 min read

SEPA stands for Single Euro Payments Area and represents a pan-European network of countries – including the UK – where two cross-border bank accounts can send and receive payments in euros. SEPA enables transfers from one account to another exclusively in euros between bank accounts in countries within the eurozone.

What are the different types of SEPA transfer?

There are three types of SEPA transfers, including credit transfer, instant credit transfer, and Direct Debit transfer.

A SEPA credit transfer is usually used for one-off transfers that take about a day to process, so long as the two bank accounts are within the SEPA network and the payment service provider is a formal participant in the SEPA scheme. Similarly, an instant credit transfer has the same requisites but can be processed in under ten seconds.

A SEPA Direct Debit bank transfer is a 'pull' payment which means that a customer only needs to set it up once. Once set up, a business can then take ongoing Direct Debit payments and manage the frequency of payments as well as the amount being paid.

One of the main business benefits of a SEPA Direct Debit bank transfer is that you can pull payments from your customer’s bank account on a recurring basis. It requires the customer’s permission of course, according to whatever subscription or recurring payments deal agreed with the business. Pulling recurring payments via SEPA can improve your cash flow as well as reduce failed and late payments.

Here we look closer at what a SEPA transfer is and how it works, especially from the perspective of your UK-based business.

How to collect SEPA Direct Debit payments with GoCardless

1.

Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).

2.

Easily set up & schedule SEPA Direct Debit payments via payment pages on your website checkout or secure payment links.

3.

From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.

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SEPA transfers for UK businesses

The UK is still a part of the SEPA group of countries despite Brexit. This means that you can still benefit from a SEPA credit transfer when conducting international business.

However, SEPA has been traditionally hard to access for UK merchants, though there are ways to make it work easily and cost-effectively.

For example, GoCardless provides a solution which enables you to leverage SEPA Direct Debit to collect payment in euros from a customer based in Europe. The payment is collected directly from the customer’s bank account, which puts you in greater control of the incoming payment as you control the payment amount and date.

With GoCardless, you do not need to set up a business account in each country you do business in, nor have a euro account in the UK. GoCardless also offers real-time currency conversion rates at better rates than you will find at banks, using the real exchange rate (via Wise).

Quick and easy SEPA transfers

The main issues that UK merchants have had using traditional SEPA Direct Debit solutions provided by banks and bureaus is how complex and time-consuming they are to set-up. GoCardless solves this problem by making SEPA credit transfers quick and easy to set up. The process is also cost-effective as there are no set-up costs or turnover requirements, making it ideal for you.

Using Direct Debit for a SEPA transfer also eliminates the possibility of late payments, which saves time and money. This aspect improves cash-flow while reducing the stress involved in chasing customers who are late with their payments.

Setting up SEPA transfers in the UK

GoCardless simplifies the process so you can start taking payments from SEPA countries easily, while the amount is settled in your home currency, all with no hidden fees.

GoCardless also integrates seamlessly with over 300 partners, including major invoicing software like Xero and QuickBooks, which puts payment visibility right into the workflow of the business.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.