The Single Euro Payment Area (SEPA) was the final, and arguably most crucial, component of the European single market. The goal of it was to make Euro transfer a simpler and more affordable process throughout the Eurozone and beyond. Whether payments are made by card or by electronic methods, if they are being made within SEPA, they would need to use one of the four payment processing systems that were introduced under the scheme.
These systems are SEPA Credit Transfer System (SCT), SEPA Direct Debit (SDD), SEPA Business-to-business, and SEPA Instant Credit Transfer (SICT). For individuals transferring money within the Eurozone, it is the SDD and the SCT which are the most significant systems, as these are the ones used to process all transfers of funds virtually between individuals. Businesses may use any of the four systems, depending on the exact nature of the business in question.
The harmonisation of the multitude of disparate payment systems which were previously being used throughout Europe has provided wide-ranging benefits to both individuals and businesses. Many analysts believe that the introduction of SEPA is highly beneficial to both the EU and the economy of the entire bloc as a single entity, and also to individual member states. It is not only covers the entire Eurozone but also includes the following countries: Norway, Liechtenstein, Monaco, Iceland, Switzerland, and San Marino. It is therefore essential that any business operating within the Eurozone understands exactly what SEPA is and what advantages it brings for your business.
Advantages of Single Euro Payment Area(SEPA) for Businesses
- Send Money Cheaply
Prior to the advent of SEPA payments, individuals and businesses were at the mercy of whatever systems were available in their country for transferring funds. Often, this meant that one type of transfer would be used for transfers within the country’s borders and a completely different system used to send funds internationally.
SEPA, on the other hand, has allowed the EU to treat the European continent as a single domestic market and this is reflected in the very low transfer costs within SEPA. While the majority of financial institutions will charge a fee to make SEPA credit transfers, this fee is very low compared to the costs of making international transfers under the old systems.
You can get a quote online regarding cost to set-up its system up in your business. Once you’ve obtained your quote, you can get more insights regarding the transfer fees. Once you’re a SEPA payments provider, you can look for this is AccessPay.
To request a quote, simply visit https://www.accesspay.com/payments-technology/sepa/
- Streamline Payments
Under it, there are only four payment systems that one needs to familiarize oneself with in order to fully understand how to transfer money to and from anywhere within it. This is in contrast to the situation prior to SEPA, wherein one would have to understand the local regulations and available services for any and all countries that one planned to transfer money into or out of.
- Easy to Understand
Part of the elegance of SEPA as a solution to the previously fragmented and fractured European market is its simplicity. Not only it is incredibly straightforward to use, it is, in most cases, something that happens automatically. Virtually all payments made electronically, whether online or by using a mobile app, are now sent through SEPA without any intervention from the user.
- A Truly Border-less Market
One of the main goals of the EU since its inception has been to remove the borders between European nations and bring them closer together economically. To this end, it has played a vital role in helping to break down the barriers between economies which prevented the EU from becoming a truly integrated block until recently. This is a great boon for businesses operating within it, especially when compared with the previous chaos that resulted from using a number of disparate systems.
- Cost Effective
It is very cheap to use for sending money from the UK to the Eurozone. While most business transactions will incur a small fee, this is tiny in comparison to the fees that were previously being paid on cross-border transactions. This makes it cheaper than ever to conduct business throughout Europe.
- Future Proofing
EU regulators are currently looking for ways of expanding SEPA so that it can be used for mobile payments and other technologies, which are beginning to emerge. It will, therefore, save many businesses the cost and trouble of investing in the necessary payment infrastructure themselves.
It has revolutionized the way that businesses across Europe conduct their day to day operations. It has bought a cost-effective and standardized payment system to the continent and is the cornerstone of the European single market.