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

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.

To help you get started, here’s our guide to how you can get set-up to offer SEPA payments to your European customers.

How do I get started with SEPA?

It’s really simple to start taking SEPA payments from your customers. Here are the steps to follow:

  • Contact our support team

  • Make sure you have a bank account that accepts payments in Euros and also accepts SEPA Direct Credit payments (so we can pay out funds to you).

  • Add your Euro bank account on your GoCardless dashboard

  • Make a verification payment of 1 Euro cent.

  • Select Euros as the currency you want to use. Your payment pages will then offer customers the option to input an IBAN number to send a payment.

  • Start receiving payments from your customers in Euros.

How long does it take to get setup to use SEPA?

Once you get in touch with us, we’ll go through the whole SEPA setup process for you, and enable you to start using it straight away.

You’ll need to make a 1 cent verification payment as proof that you have a bank account that can accept Euros. When that’s all done, everything is essentially the same as setting up ACH payments with GoCardless - quick and easy!

How long will it take for me to get paid?

With SEPA, funds will usually be received five working days from when the payment is created.

Do I need an agreement with a European bank to get paid?

No, all you need is a bank account that can accept Euros. GoCardless handles all banking relationships on your behalf as part of our service, for no extra charge. We’ll also handle all the potentially complicated legislation and compliance procedures for you, making the process of setting up European payments super-smooth and convenient. 

There’s no need to hesitate any longer about taking payments from European customers. GoCardless handles all the complexities for you, making your experience smooth, quick and convenient using the simple GoCardless dashboard or API setup that you’re already familiar with.

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.

GoCardless is used by over 55,000 businesses around the world. Learn more about how you can improve payment processing at your business today.

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GoCardless Ltd., Sutton Yard, 65 Goswell Road, London, EC1V 7EN, United Kingdom

GoCardless (company registration number 07495895) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, registration number 597190, for the provision of payment services. GoCardless SAS (23-25 Avenue Mac-Mahon, Paris, 75017, France), an affiliate of GoCardless Ltd (company registration number 834 422 180, R.C.S. PARIS), is authorised by the ACPR (French Prudential Supervision and Resolution Authority), Bank Code (CIB) 17118, for the provision of payment services.