STEP 4, Consider the Use of SEPA Payments

Some information regarding SEPA credit transfers

SEPA is an abbreviation of Single Euro Payment Area. In this chapter we will focus on the credit transfers with SEPA and why to use it.

Normally when you do international transfers (cross border transfers), you will be charged for an exchange fee, an exchange rate loss and a transfer fee. Of course, if you already have a EUR bank account, you will save the exchange fee and the exchange rate loss, but you will still pay the cross border fee. These fees are quite expensive as the normal charge (depending on your bank) is about EUR 5-30.

SEPA payment rules are only valid for Euro countries, not all EU countries are members of the eurozone. The rule for a SEPA payment is that the transfer cost may not be higher than a domestic payment. This means that if you have a EUR bank account and your bank supports the SEPA payment you actually do not pay more cost when transferring money to another Euro country than you would pay for a domestic payment. The transfer cost for a domestic payment is typically below EUR 1.

Many banks offer to do the transfer as a SEPA payment, if the transaction fulfils the SEPA rules. Be aware, because you will not know whether it has been transferred as a SEPA or not, before you get the transaction fee. Some international payments can be very expensive, it can be up to EUR 10-70 instead of the below EUR 1.

Some of the obvious rules are that the transfer needs to be done in the EUR currency, and the receiver bank account must be specified as an IBAN number and not BBAN. If you are using an ERP with some banking functionality maybe it supports the SEPA payments and does have the validation rules build in, so you will be noticed of the missing information before the transfer execution. Of course, if you are using AMC-Banking, the SEPA transfer will only be executed if all the SEPA rules have been met, and you will be noticed if any problem is detected.

Analyze your payment transaction, should you use SEPA?

First you need to know whether you do transfers to any Euro country. Secondly you need to know whether your bank supports SEPA payments. In our analysis we can see that we could save some transfer costs in Germany (SEPA country) and a little in Spain (also a SEPA country). Unfortunately all our transfers to US need to be international which are expensive. We could consider opening a bank account in the US and save transfer costs by doing the transfers as domestic instead. See about this in Cash Management Step 3.

Number of payments per month

If we focus on our international payments to Germany and Spain, our calculation for saving fees would be 20 transfers to Germany and 8 transfers to Spain. We assume we can save EUR 7 per transaction:

(20 × EUR 7 + 8 × EUR 7) × 12 = EUR 2352
EUR 2,352 – quite a lot for so few transactions.


  • Great cost savings.


  • Few or none, the saving works best if you have a Euro bank account. But even if you do not have one, it is definitely worth it.

The catch

  • No catch, just use the SEPA payment type for Euro payments. You can check whether your receiver resides in a SEPA country by consulting the European Central Bank website. Just be sure to use the IBAN bank account number, never BBAN in which case you will be charged by your bank.

And of course you should use the AMC-Banking where every aspect is build in.

You will find all the countries, which support SEPA at the European Central Bank:

Countries Supporting SEPA