If you have found yourself asking this question – “Can I use SEPA to send or accept payments between the UK and the EU?” – then the short answer is, yes, you can. Since Brexit, you might expect new rules since the UK is no longer a part of the EU. If you are a business that wants to make SEPA payments from the EU to the UK and vice versa, read on to know more.
Is the UK still a member of SEPA after Brexit?
Yes, the UK is still a part of SEPA. This means businesses will continue to be able to make SEPA transfers between the UK and EU. But while not much has changed in theory, in practice, some extra details are required when making these payments. Banks in some countries may levy additional charges on SEPA payments coming from the UK. But thankfully, this is not widespread, and most payments between the UK and Eurozone do not incur extra charges.
What are SEPA payments?
SEPA or Single Euro Payments Area is a payment scheme for the EU, Iceland, Norway, and Liechtenstein from the European Economic Area, and Switzerland. Businesses can use it to make fast and secure payments in euros. There are three types – SEPA Credit Transfer (SCT), SEPA Instant Credit Transfer (SCT Inst), and SEPA Direct Debit Transfer (SDD). You can send money from a single bank account to other banks in participating countries. It provides a standardized way to send money quickly anywhere within the region.
SEPA is an easy and cost-effective way to speed up your cross-border payments. And with the same convenience as domestic payments. A SEPA payment is made directly between the sender and recipient’s bank accounts and does not involve cards or card schemes. It only requires the IBAN (International Bank Account Number) and the BIC (Business Identifier Code) of the sender and recipient. Currently, you can make SEPA payments in 36 countries that are a part of the SEPA scheme (see list of countries here).
How can you make SEPA payments between the UK and EU?
SEPA still enables businesses in the EU and UK to make euro transfers using direct debits or direct credits. However, Brexit changes mean that a SEPA payment instruction from the merchant’s bank (in this case, your bank) must include the debtor bank’s postal address. Payments made using SEPA Credit and SEPA Instant Credit Transfers must include the full address of the originator and the BIC code of the beneficiary bank.
For Direct Debit (SDD Core and B2B) collections from the creditor, it must include the full address details of the debtor and the BIC code of the Debtor Bank. According to the European Payments Council (EPC), the lack of these additional transaction details may lead to transactions getting declined. Hence, it is best to ensure you have these details available if you are sending or receiving payments between the UK and EU.
How can Novalnet Help?
We can help you set up SEPA payments, whether you are based in the EU or the UK. Our technology helps businesses like yours to accept payments globally in 125+ currencies in 150+ automated country-specific payment methods. Many of Europe’s leading brands trust us to handle their payments. Set up your payments within minutes with minimal coding using our instant payment plug-ins. Or use our AI-based risk management solutions and advanced analytics to design the best payment experiences for your customers, all in a fully secure environment.
Reach out to us to know more about how we can help you up your payments game and grow your business.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.