How Do SEPA Payments Differ from Regular Bank Transfers?12 min read

How Do SEPA Payments Differ from Regular Bank Transfers?12 min read

First of all, it is necessary to answer the question of what SEPA payments are. The meaning of SEPA payments is a European Union project designed to facilitate payments between countries, aiming to standardize economic transactions made in euros in the European region. 

It is a system created to make payments among European Union countries cheaper, more effective, and faster. It is a project covering 36 countries in the European region. The Kingdom Bank is the best bank among the banks where you can make SEPA payments in the European region.

Apart from the European Union countries, it also includes countries such as Iceland, Norway, and Switzerland. It enables international payments. It keeps account transmission time at certain standards and allows payments to generally reach the recipient on the same day. 

These standards also apply to international transactions. Compared to traditional bank transactions, costs and processing times in accounts are lower. One of the aims of SEPA is that costs and processing times are lower when making international payments.

What are SEPA Payments?

Single Euro Payments Area (SEPA) is a financial project created to facilitate payments in euros between the European region and the countries trading with the countries in this region. 

IBAN is generally used for SEPA payments, so account information and payment instructions can be easily maintained and processed. SWIFT is used to enable fast and accurate payments. 

Creditor individuals or businesses can withdraw their payments from the other party’s account on their own, provided that they obtain the other party’s approval. 

Money transfer from one bank to another in euros takes place in one go, the costs are low and the money is transferred on the same day. As the bank with the lowest costs in SEPA payments, The Kingdom Bank will assist you in these transactions.

Where to Use SEPA Payments?

SEPA payments have a wide range of uses. It was created to facilitate international payments made in the Euro, so many transactions in European countries and countries included in SEPA can be carried out by SEPA. All your SEPA transactions with European countries and countries included in the payment system can be carried out through The Kingdom Bank.  

SEPA can be used for international trade payments. It allows payments to individuals and companies using SEPA credit transfer and direct debit payment methods. It enables faster and lower-cost transactions by automating the payments of company or personal bills. 

SEPA direct debit cards can be used frequently in online shopping platforms, as well as in corporate and individual payments, and their costs are quite low. It is possible to make payments that need to be made periodically every month, such as personnel salaries, rent, invoices, and subscription transactions, quickly and securely with SEPA debit.

Who Can Make SEPA Payments

SEPA payments in Europe can be made by individuals, companies, banks, online shopping sites, government and government-affiliated institutions and businesses. Individual users can make SEPA payments for their daily shopping or when they want to transfer money to a family member. 

The Kingdom Bank enables money transfers between family members and companies to carry out trade payments at low costs. 

Businesses can pay the fee they need to pay for the materials they purchase as SEPA payment. Companies can make these payments in transactions such as investment funds and asset transfers. 

The government considers tax payments, social support, or payments for any public services as SEPA payments. Banks carry out asset transfers according to customer requests as SEPA. 

SEPA payment, which is available as a payment option on online shopping sites, increases the speed of transactions and provides convenience to customers.

What are the Differences Between SEPA Payments and Regular Bank Transfers?

SEPA payments handle payments made in Euro currency and can be processed within a specific geography, whereas traditional bank payments enable international payments across larger regions. 

While SEPA payments have a certain structure and format, traditional bank transactions have a more diverse and dynamic structure. It has become a preferred transfer method for businesses and commercial accounts because it generally has lower costs and faster results than traditional banking transactions.

How Can SEPA Payments Be Used in Businesses?

You can use SEPA (Single Euro Payments Area) payments, which will be very functional and facilitative in business life, for your money transfers in your business life. Businesses, both national and international, can make money transfers via SEPA. To use SEPA payments as a facilitator in your business life, you must first have a SEPA-compliant bank account for your business. 

Many banks operate by providing a SEPA-compliant infrastructure. You can find out whether your bank offers a SEPA-compliant account by having an interview or start working with a new bank. 

The identifiers used by SEPA payments are generally IBAN or BIC identifiers, and using these identifiers correctly in your transfer transactions allows you to standardize your transactions.

Businesses can send SEPA-compliant invoices to their customers via SEPA, but the invoices must include the recipient’s IBAN or BIC information. At the same time, businesses can manage their receivables or payments by the SEPA standards method. 

Another way that will make your business life easier is SEPA Credit Transfer (SCT). SCT also enables cross-border money transfers from one bank to another at much lower costs than regular bank transfers. 

If you own a business working in Europe, you can easily make payments to your business partners or suppliers there at low costs with this transaction. You can use internet banking to manage your SEPA payments, so you can report or edit your payments. 

A very simplified process you can use to manage your SEPA payments is to use process automation. Process automation, which you can use to make transactions faster and more error-free in your cross-border payments, can include automating if you have recurring payments and using reporting and analysis tools to monitor your processes and compare the success rates of payments. 

It is very important to train your staff on the use of SEPA payment because determining a team to manage process automation can increase and accelerate the success rate of transactions. It may be beneficial for your business to make sure that your team consists of people who you are confident can use the system effectively and who can solve possible problems quickly. 

How Does SEPA Payments Benefit Business Accounts?

Using SEPA payments for your business account can be easier to manage. Low costs are very beneficial for your cross-border transfers. The fact that SEPA payments are made very quickly will also speed up the processes for you. SEPA payments can also simplify your accounting processes. 

Since it greatly facilitates cross-border trade, SEPA may be a suitable payment tool for you, especially if you have a business working with Europe. 

It may be advantageous for you to use SEPA payments in your commercial account to provide better service to your customers and offer unique benefits to your business. 

The Kingdom Bank always takes businesses one step forward with its SEPA payment service, as well as traditional banking, cryptocurrencies, and digital wallet services.