SEPA

SEPA gives participating providers common euro payment scheme rules and message formats across a geographical area broader than the EU. The European Payments Council lists 41 countries and territories in the scope; availability and processing still depend on the provider and scheme.

SEPA Credit Transfer (SCT)

SCT is a push payment: the sending bank initiates the transfer. Standard SCT settles in one business day (T+1) during banking hours. Key characteristics:

• No card-style chargeback: SCT has no card-network dispute process, but banks can handle rejects, returns, recalls and requests for recall under the EPC's R-transaction rules. A recall request does not guarantee recovery.
• High transaction limits: SCT supports transactions up to €999,999,999.99 — effectively unlimited for commercial use.
• Use cases: B2B invoice payments, payroll, large consumer purchases, marketplace disbursements.
• Bank account required: Both payer and payee need SEPA-participating bank accounts. Not available for unbanked consumers.

SEPA Instant Credit Transfer (SCT Inst)

SEPA Instant is the real-time variant of SCT, settling within 10 seconds, 24/7/365. It is built on the same framework as SCT but with near-instant finality. Key points:

• Maximum transaction limit: Historically capped at €100,000 per transaction at the scheme level; the EU Instant Payments Regulation removed that scheme-level cap, and PSPs now set their own per-transaction limits.
• Bank participation: Under the EU Instant Payments Regulation, euro-area banks have had to be able to receive SEPA Instant payments since January 2025 and to send them — with Verification of Payee — since October 2025; non-euro-area PSPs follow in 2027.
• Pricing: The sender's and recipient's provider terms determine fees; merchants should compare the full provider quote with card acceptance costs.
• No card-style chargeback: Exception and recall processes still exist; instant execution makes prevention and rapid reporting important.
• Open banking layer: SEPA Instant is the settlement rail underneath many open banking (PSD2/PSD3) payment initiations in the EU.

SEPA Direct Debit (SDD)

SDD is a pull payment — the merchant initiates the debit from the customer's account. There are two SDD schemes:

SDD Core: Consumer-facing. Used for utilities, subscriptions, insurance premiums. The customer signs a mandate authorising the merchant to debit their account. Settlement is T+1 to T+3. Consumers have an 8-week no-questions-asked refund right (13 months for unauthorised transactions).

SDD Business-to-Business (B2B): For eligible business payers. It does not provide the Core scheme's unconditional refund right for authorised collections. The payer's payment provider must check that a valid mandate is in place before executing the collection and compare subsequent collections against stored mandate data, as the EPC explains. It is suitable for recurring business payments when both providers support the scheme.

Key operational requirement: merchants must hold a signed mandate (physical or electronic) before initiating any SDD debit, and must provide the customer with pre-notification (typically 14 days, though this can be reduced by agreement).

SEPA vs Card Payments

For euro-denominated transactions:

SEPA pricing and post-payment recourse depend on the scheme and provider. A merchant comparing rails should model provider fees, refund rights and exception handling separately rather than treating every SEPA payment as final or free.