The Startup's Guide to SEPA Transfers in 2025

Managing international payments in Europe has long been a headache for startups. Different countries, varying bank requirements, unpredictable processing times, and inconsistent fees create cash flow uncertainty when you can least afford it.

The Single Euro Payments Area (SEPA) creates a standardized framework for euro transactions across 36 European countries. For startups, SEPA means predictable, efficient payments with consistent rules regardless of whether you're sending money to Germany, Spain, or Finland.

While SEPA has already simplified cross-border transactions, a major shift is coming in 2025:

• SEPA Instant Payments will soon become mandatory for all European banks
• Real-time, 24/7 transactions will become the standard rather than the exception
• Payments will process in just 10 seconds instead of the current 1-day timeframe

This guide explains everything startup founders need to know about SEPA, the upcoming 2025 changes, and practical steps to prepare their businesses for the instant payments revolution.

Let's start by understanding a SEPA transfer and how it works for your business operations.

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What is a SEPA Transfer?

A SEPA transfer is a standardized electronic payment system that enables quick, secure, and cost-effective euro transactions between accounts in any of the 36 participating European countries, regardless of national borders. 

This unified payment framework allows businesses and individuals to send and receive euro payments as easily as they would domestically.

SEPA was introduced by the European Union to improve cross-border payments by:

• Eliminating the distinction between domestic and cross-border euro payments
• Creating a single set of standards for credit transfers and direct debits
• Reducing the complexity and costs associated with international transactions
• Fostering greater financial integration across the European market
• Promoting increased competition in the payments sector

Here's how SEPA concretely benefits your startup operations:

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What are SEPA Types?

SEPA offers three main transfer mechanisms, each designed for specific payment scenarios that your startup might encounter. Understanding these options helps you choose the right payment method for your business needs.

1. SEPA Credit Transfer (SCT)

Standard SEPA Credit Transfers are the backbone of euro payments across the SEPA zone. These transfers work similarly to domestic bank transfers but extend across national borders.

• Typically settles within one business day (T+1)
• The maximum amount per transaction is €100,000
• Requires only the recipient's IBAN (International Bank Account Number)
• Used primarily for supplier payments, salary disbursements, and one-time transactions

2. SEPA Instant Credit Transfer (SCT Inst)

SEPA Instant represents the future of European payments, delivering real-time transaction capabilities that dramatically improve cash flow management for startups.

The 2025 regulatory update makes these instant transfers mandatory for all banks across the SEPA zone. The most significant aspect is that banks cannot charge more for instant payments than they do for standard transfers, democratizing access to real-time payments.

• Completes within 10 seconds regardless of time or day
• Available 24/7/365 including weekends and holidays
• The current maximum amount is €100,000 per transaction
• Provides immediate confirmation of successful payment

3. SEPA Direct Debit (SDD)

SEPA Direct Debit enables businesses to collect funds directly from customer accounts, streamlining recurring payment collection and reducing administrative overhead.

SDD comes in two variants: Core Direct Debit for consumer payments and B2B Direct Debit for business transactions. 

The key difference is that B2B requires formal authorization from the paying business and offers no refund rights.

• Requires a signed mandate from the payer authorizing the collection
• Predictable settlement dates improve cash flow forecasting
• Reduces late payments and administrative costs of invoicing
• Core SDD offers consumers an 8-week refund period for unauthorized debits

Now that you understand the different SEPA transfer options, let's examine the step-by-step process of sending a SEPA transfer and what information you'll need to prepare.

Step-By-Step Process of Sending a SEPA Transfer

To send a SEPA transfer, you'll need:

• The recipient's IBAN (International Bank Account Number)
• The recipient's name as it appears on their bank account
• BIC/SWIFT code (though increasingly optional within SEPA)
• Transfer the amount in euros
• Payment reference information for reconciliation purposes

The authorization and processing flow typically involves logging into your online banking portal, selecting SEPA transfer, entering the required details, confirming the transaction, and receiving a confirmation reference. Most banks offer file upload options for bulk transfers compatible with various formats.

How long does a SEPA transfer take?

Transfer times vary significantly between standard and instant SEPA transfers. Here's how they compare:

For standard transfers, be aware of your bank's cutoff times—transactions initiated after the cutoff (typically early afternoon) will be processed the following business day. Instant transfers have no such restrictions and processes regardless of banking hours.

SEPA Transfer Costs & Fees

SEPA transfers are typically lower cost than traditional international payments. With the 2025 regulatory update, important consumer protection has been introduced. Now, banks cannot charge higher fees for instant SEPA transfers than they do for standard SEPA transfers. This prevents banks from treating faster payments as a premium service and ensures all businesses can benefit from improved cash flow without additional costs.

• Domestic SEPA transfers are often free within many EU countries
• Cross-border SEPA transfers generally cost the same as domestic transfers
• Maximum fee caps are regulated at the EU level
• The 2025 regulation mandates price parity between standard and instant transfers
• Additional services like priority processing cannot be used to circumvent the fee restrictions

SEPA Coverage & Participating Countries

SEPA currently includes all 27 EU member states plus Iceland, Liechtenstein, Norway, Switzerland, Monaco, San Marino, Vatican City, Andorra, and the United Kingdom. The network continues to expand, with:

• Albania joining in 2024, enabling zero-cost transfers from 2025
• Ukraine making significant progress toward integration, with membership expected soon
• North Macedonia formally applying for membership in 2024

This expansion benefits startups by creating a larger unified market with standardized payment processes, reducing the complexity of entering new European markets, and expanding your customer base without additional payment infrastructure.

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Difference between SEPA and Traditional Bank Transfers

The following table highlights the key differences between these two payment methods:

SEPA transfers offer significant advantages through standardized formats that eliminate the complex routing systems of traditional transfers, where payments pass through multiple correspondent banks. For startups managing euro payments, SEPA provides predictability with consistent settlement schedules and substantially lower costs, especially for small to medium transactions.

Traditional transfers remain necessary for non-Euro transactions or payments to countries outside the SEPA zone, leading many businesses to maintain both payment capabilities to optimize their international payment strategy.

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SEPA Instant Payments Regulation (IPR) Updates in 2025

The European payments landscape is about to change with the implementation of the SEPA Instant Payments Regulation (IPR). This will change how money moves across Europe, offering new opportunities and challenges for businesses and consumers.

• The European Union has mandated that all banks within the region must support SEPA Instant Payments (SCT Inst) by January 9, 2025.
• This regulation applies to all payment service providers operating in the EU, regardless of size.
• The requirements will be implemented in phases to ensure smooth adoption across the banking sector.
• The regulation aims to modernize Europe's payment infrastructure to match global advancements in real-time payments.

Key Rules Under IPR (Instant Payments Regulation)

The new regulation introduces several requirements that will fundamentally change payment processing across Europe. These rules will ensure consistency, speed, and reliability for all euro-denominated transfers within the SEPA region:

Several non-euro SEPA countries, including Poland, Sweden, and other EU members outside the eurozone, will have an extended timeline till 2027 for full compliance. This phased implementation recognizes the technical challenges involved while still maintaining pressure for timely modernization.

Why This Matters

The shift to instant payments will have far-reaching implications across the European economy:

• Businesses and individuals will benefit from dramatically improved cash flow, with funds becoming available immediately rather than after several business days.
• The standardization of instant payments across Europe will increase trust and security in the payment ecosystem, reducing fraud through real-time verification.
• Banks face competitive pressure to modernize their payment infrastructure, potentially spurring innovation in related financial services.

"2025 will be a historic year for payments in Europe. The new instant payments mandate will transform the European payments landscape with faster, frictionless, and more secure payments for consumers and businesses." – Richard Albery, ACI Worldwide

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How Startups Should Prepare for SEPA Instant Payments

Startups operating in Europe need to proactively prepare their payment infrastructures to comply with the new regulation and capitalize on its benefits. Taking early steps will not only ensure compliance but also create competitive advantages in customer experience and operational efficiency.

Before diving into specific actions, let's examine the key preparation areas that will require attention in the coming months:

Here's what startups need to do to prepare effectively:

The SEPA Instant Payments mandate will fundamentally change payment operations for every European business. Here's what your startup needs to do now:

Step 1. Verify Bank Readiness

Contact your banking partners to confirm their implementation timeline for SEPA Instant Payments. Some banks are already offering these services, while others are still developing their capabilities. If your current bank is lagging, consider establishing relationships with more progressive financial institutions.

Step 2. Upgrade Payment Systems

Most existing treasury management and payment processing systems were designed for batch processing with end-of-day settlements. These systems will need significant upgrades to handle 24/7 real-time transactions. Start identifying potential system limitations now to avoid last-minute compliance issues.

Step 3. Adopt Open Banking Solutions

The combination of Open Banking APIs with instant payments creates powerful new payment options. Implementing "Pay by Bank" solutions that leverage instant payments can reduce transaction costs and improve conversion rates compared to traditional card payments.

Step 4. Enhance Security Measures

Real-time payments require real-time security. Review and strengthen your anti-money laundering (AML) and fraud detection systems to operate within the 10-second processing window without compromising security or compliance requirements. Properly preparing your systems now will help your business eliminate cash flow gaps and simplify payment reconciliation when instant payments become mandatory. 

Need help understanding SEPA Instant Payments? Inkle's payment experts can guide you through the technical, operational, and regulatory aspects of implementation. Contact our team today to ensure your business thrives in Europe's new payment landscape. 

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Frequently Asked Questions

1. Are SEPA Instant Payments mandatory for all banks in 2025?

Yes, from January 9, 2025, all European banks must receive instant SEPA payments, and by October 2025, must also support sending them. This phased implementation gives banks time to upgrade their systems while ensuring market-wide adoption. The mandate applies to all payment service providers in EU states with only limited exceptions for certain smaller institutions

2. What happens if a SEPA Instant Payment fails or is delayed?

If a SEPA Instant Payment fails or exceeds the 10-second processing window, banks must immediately notify the sender with specific reasons for the failure. The regulation requires transparent error reporting, prompt resolution of issues, and banks with persistent failures may face regulatory scrutiny.

3. How can businesses check if their bank supports SEPA Instant Payments?

Banks should be contacted directly to verify their SEPA Instant Payments compliance status and implementation timeline. Check for both receiving (January 2025 deadline) and sending (October 2025 deadline) capabilities, and confirm any transaction limits that may apply. Many banks have published roadmaps and offer early adoption options to help businesses prepare their payment systems.

4. Do non-EU businesses or individuals have access to SEPA Instant Payments?

SEPA covers euro transactions across all EU countries plus several non-EU members like Norway, Switzerland, and the UK. Non-EU businesses can access instant payments if they have accounts with SEPA-participating banks, though additional requirements may apply depending on their jurisdiction's relationship with the EU payment system.