As a business owner, you have a fair amount of responsibilities on your plate. Finding ways to streamline processes and conduct business in a smooth and effective manner are usually top priorities. One area that can cause a business issues is when they try to make a payment to one of their European partners or associates. Because the rules and standards vary across the European Union when it comes to payment systems, to say the process was confusing was an understatement. The great news is that times have changed, and with that the payment process has evolved and become more effective and streamlined.
This brings us to SEPA, which stands for Single Euro Payments Area, and is a process that ensures you can make a credit transfer and even collect a direct debit on a Euro account that is based anywhere. Not only does SEPA make it possible, it makes it easier, faster, and much less confusing. Even though SEPA became mandatory in February 2014, there are still plenty of businesses who are still learning the ins and outs of SEPA payments and what it means to their business as a whole.
Here we’ll take a closer look at what the SEPA process is and how it can revolutionise not just the way your company makes payments, but also receives payments from other countries in the EU.
What is SEPA?
SEPA isn’t a new process. As stated it was brought into full effect in February 2014 but before that it had been phased in over a period of time. This was meant to allow businesses time to adjust and get used to the process. The whole purpose of SEPA is to make it easier for businesses to transfer electronic payments and money between any country in the European Union that falls within the SEPA area. The idea behind SEPA is that it should be just as easy to send and receive money to another country as it is within your own country.
SEPA ensures that there are no hidden charges where banks are concerned, and the pricing is transparent.
The process was taken one step further in November 2017 when instant SEPA payments could be made within 10 seconds. This was true for payments of up to €15,000. It made the process even more effective and helpful.
Do You Have to Use SEPA?
If you’re wondering if you have to use the SEPA process, the answer is yes. This is a mandatory process but it’s meant to make business more streamlined. Right now, businesses are able to easily and quickly make payments to 32 different countries. This improves trade and helps to boost the level of competitiveness that exists in the EU.
You’ve got the option to use one of three different “payment instruments”. Choose from debit card, direct debit, or credit transfers. Even accounting and payroll functions have now been rolled into SEPA. This is ideal for businesses who have offices and employees based throughout the EU.