7th Apr 2022

What is SEPA and is the UK still part of it after Brexit?

It’s 2024, and the UK has been independent from the EU for 4 years. But are we still part of SEPA?

The short answer is yes, but there’s a longer answer too.

So, we consulted with UK Finance and our internal experts, to pull together everything you need to know about SEPA in a post-EU world.


What is SEPA and what are SEPA payments?

SEPA stands for the Single Euro Payments Area. It’s a mechanism that allows for participating countries to easily make cross-border euro transactions. That means if you’re in one of the 36 countries in SEPA, you can send and receive euro payments simply and cost-effectively.

Since the launch of SEPA in 2008, every member state of the EU has been part of the initiative. More recently, in 2014, all members of the EEA were added too. But, technically, any country in Europe can be part of SEPA is approved – hence the inclusion of countries like the United Kingdom and Switzerland (neither of which are in the EU or EEA.)

There are also notable exceptions. Greenland and the Faroe Islands are not part of SEPA, despite Denmark being so, and countries like Montenegro and Kosovo, despite using Euros as national currency, are also not in SEPA.

People and businesses in countries which are part of SEPA can make euro transfers, via direct debits and direct credits, to entities in other SEPA countries, using a single bank account and a standardised set of rules. It’s an easy, fast, and secure way of making cross-border Euro payments.


Is the UK still in SEPA?

Yes, the UK is still a member of SEPA. UK people and businesses are able to make SEPA payments, in the same way they have been doing since 2008.

That’s because being part of SEPA is not contingent on being part of the EU, EEA, or any other group or initiative. It does require approval and acceptance by SEPA, however. Which is why, two years after the UK public voted to leave the EU, UK Finance filed an application to remain in SEPA on behalf of UK payment service providers.

The European Payments Council approved this application, providing the UK continued to comply with relevant SEPA criteria. This has been upheld, through an annual equivalence self-assessment, conducted by UK finance.


How has Brexit affected the UK’s membership of SEPA?

According to UK Finance: “Broadly speaking, nothing has changed for UK businesses who use SEPA for SEPA payments. As the UK is still a member, SEPA payments made between the UK and EU should be treated the same and UK businesses will continue to be able to make SEPA credit transfers and direct debits in euros.”

However, there are a few extra details which are now necessary to make SEPA payments.


Do UK banks and PSPs charge for SEPA payments?

There are no basic fees for SEPA payments, though some banks may charge a nominal fee to cover operational costs. This fee is unlikely to be more expensive than other payment types, like domestic transactions. The most likely fee that you may encounter is a conversion fee. If you need to convert to Euros before sending via SEPA, you’ll probably pay around 1% of the total payment – although this varies by service.

How do PSD and PSR fit into SEPA?

PSD, or the Payments Services Directive, paved the way for SEPA. It laid the legal and regulatory framework, enshrining them into law of participating countries, in order to enable all the shortcuts and benefits of SEPA.

In 2023, the European Commission drafted PSR (Payment Services Regulation) which brings new rules and an update to the PSD. This seeks to achieve four things:

  1. Stronger enforcement and implementation of rules in member states, to prevent fragmentation of the market and forum shopping.
  2. Protect PSUs (Payment Service Users) from fraud.
  3. Improve payment competitiveness by removing obstacles for Open Banking Service Providers.
  4. Combat the economic inefficiencies/discriminations suffered by non-bank PSPs (Payment Service Providers) by boosting access to systems and accounts.

For more information on PSR and PSD, visit the European Commission website.


What extra information is needed for UK SEPA payments?

Whilst membership hasn’t changed and most of the payments process remains the same, there are a few additional fields to complete:

  1. SEPA payment instructions from the bank must include the debtor’s postal address.
  2. For credit (SCT and SEPA Instant Credit Transfer) payments, the full address of the originator and the BIC code of the beneficiary bank must be included.
  3. For direct debit (SDD Core and B2B) collections from the creditor, the full address of the debtor and the BIC code of the debtor bank must be included.

It’s important that you include these each and every time because, according to the European Payments Council, “the lack of these additional transaction details may lead to rejected transactions or potential other issues from the scheme participant receiving the payment message.”


How Can These Changes Be Made Easily?

In our view, it would make sense for the corporate’s bank to include the postal address in the payment instruction.

What some of our customers are seeing is that some of the UK banks are automatically enriching the payment instruction with the debtor account address.

Tom Livock, Head of Enterprise Sales, AccessPay explains: “It seems like a reasonable and pragmatic approach that the corporate’s bank deals with this issue, rather than the corporate itself. However, this is not mandatory and a European bank with UK domiciled euro bank accounts may not take the same view as a UK bank. Instead, they may suggest that the corporate opens up a new account in mainland Europe.”

Tom has advised AccessPay’s largest clients for over seven years. If SEPA payments become problematic for a corporate because of Brexit his advice is:

 Speak to your banks and ask them to enrich data (so you don’t have to)


Open up an account in mainland Europe so this requirement for address information doesn’t apply


If you are already an AccessPay customer, and not able to move on the first two points, please contact us to see if we are able to enrich your data for you


The good news, too, is that IBAN remains internationally recognised and can still be used to make payments to the UK.


How Can AccessPay Help?

Group Chief Financial Officer at AccessPay Sean Moriarty said: “It is understandable for businesses to have legitimate concerns around financial transactions post-Brexit. This has been compounded by the lack of detail in the final Brexit deal around implications for the Financial Services Industry.

“Although there seems to be no drastic changes to processing payments, including SEPA, it will require additional information after the end of the transition period, such as payers’ addresses”

SEPA transactions are easier with AccessPay’s corporate-to-bank integration. Our platform allows you to process payments, direct debits and automate your statement retrieval process.

Sean added: “AccessPay uses powerful data-mapping technology to enrich the ‘outdated’ payment file formats based on validation rules, so our files are always compliant with the new rules.”


Want to learn more about AccessPay’s Embedded Corporate Banking Offering and SEPA?

Find out more ➜