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What is SEPA?

SEPA, the Single Euro Payments Area was established in 2002 by the institutions of the European Union (European Payments Council, European Commission, European Parliament, Council of the European Union and European Central Bank). Their objective was to harmonize national and cross-border payment means in the SEPA area for all economic players such as consumers, companies, merchants and administrations.

The SEPA area includes the 28 member countries of the European Union as well as the United Kingdom, Iceland, Norway, Switzerland, Liechtenstein, the Vatican, Andorra, Monaco, San Marino, Jersey, Guernsey and the Isle of Man.
The implementation of SEPA has simplified the management of payments within this area for individuals and companies who now make and receive cross-border payments in euro as easily as domestic payments. In order to guarantee the same payment conditions, rights and obligations for all member countries, procedures have been simplified. Processing costs and bank charges have been reduced as well as processing times.

Today, all companies in the member countries, regardless of their size and business sector, are affected by these measures for all their national and cross-border transactions in the SEPA area, such as SEPA credit transfers and SEPA direct debits.

SEPA credit transfers and SEPA direct debits use the ISO 20022 message standard.

SEPA Credit Transfer (SCT)

SEPA Credit Transfer (SCT) is a payment transaction in euros between two bank accounts located in the SEPA area. It is characterized by the following features:

  • Account identification in IBAN format
  • 140-character label
  • One business day execution time

Iziago offers national and cross-border SEPA credit transfers for the payment of your suppliers and employees but also for treasury transfers (from account to account). It is possible to enter an order file in SEPA format or to import an Excel or text file with separators that will be converted to SEPA format by Iziago. Once the payment file is ready, the file can be deposited on your bank’s website.

Did you know?

In November 2017, SEPA Instant Payment was introduced to complement the existing range of payment methods. The SEPA Instant Transfer is a payment in euro available 24 hours a day and made in less than 10 seconds, with a maximum ceiling of €100,000 (previously €15,000). Since it is an optional service, banks are not yet obliged to offer this service to their customers, although most of them already do.

SEPA Direct Debit (SDD)

SEPA Direct Debit is a system that allows companies to collect payments in euros from the accounts of their customers (debtors) in member countries.

To make a SEPA Direct Debit, you need a SEPA Creditor Identifier (SCI) provided by the bank, a mandate (direct debit authorization) signed by the debtor, the debtor’s IBAN, a notification (direct debit advice note) sent by the creditor, and an SDD order sent to the bank.

A SEPA Direct Debit includes the information below :

  • The Unique Mandate Reference (UMR) provided by the creditor to identify the mandate that authorizes the direct debit
  • The date of signature of the mandate

Did you know?

The SEPA Direct Debit B2B transaction has its own specificities. A debtor has no right to reimbursement for authorized transactions, unlike SDD CORE for which the debtor has a rejection period of 8 weeks after the due date.
In addition, banks reject all SDD B2B transactions that do not have a signed direct debit mandate. The debtor must therefore send a copy of the signed direct debit mandate to the bank so that the latter records the characteristics of the mandate (ICS, RUM, direct debit account, date of signature) and agrees to present the direct debit.

With the Iziago software, you can collect from your customers throughout Europe via SEPA Direct Debit.

You can enter a direct debit remittance in SEPA format or import an Excel or text file with separators and Iziago will convert it into a SEPA Direct Debit file.

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