SEPA

SEPA ( Single Euro Payments Area) is an area in which payers can effect and receive payments in EUR, under the same basic conditions, rights and obligations, regardless of where they are located.

The SEPA includes: all EU member states (including Monaco and San Marino), EEA member countries (Iceland, Liechtenstein, Norway), Switzerland and United Kingdom.

In the whole SEPA area payment transactions are executed in accordance with the SEPA standards, rules and practices. SEPA standards pertain, among others, to formats of financial messaging for electronic payments (payment order data files and statement data files) and the financial messaging format applied is ISO 20022 XML (SEPA format).

SEPA payment instruments

1. SEPA credit transfer (payment order)

Credit transfer means a national or cross-border payment* service for crediting a payee’s payment account with a payment transaction or a series of payment transactions from a payer’s payment account by the payment service provider which holds the payer’s payment account, based on an instruction given by the payer.
*a cross-border payment transaction is a payment transaction executed by two payment service providers, one located in the Republic of Croatia and the other located in some other EU member state, an EEA member country or other country subject to European legislation (payment transactions made to non-EU or non-EEA countries are not considered cross-border payment transactions)

2. SEPA direct debit

Direct debit means a national payment service for debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis of the payer’s consent.

The basic standard of the SEPA credit transfer and SEPA direct debit:

• the payee's and payer's account are defined by IBAN,
• the payee's and payer's payment service providers (banks) are defined by BIC,
• payment transactions are executed in accordance with the ISO 20022 XML format of payment messages.