To common users of banking services, money transfers are money transfers. As in, you don’t consider them complex: just a tool to send and receive funds. But then, you face a plethora of terms like bank transfers, wire transfers, electronic payments, online transfers, and so on. And you start to wonder – “is there a difference between all of these?” and “what should I use?”. Well, let’s figure it out together! In this article, Genome will primarily focus on bank transfers and wire transfers and how they differ and compare wire payments to other transfer options as well. Wire transfer:
If you live in Europe, the chances of you making SEPA transfers are pretty high. But did you know there are different types of SEPA payments? No worries, Genome’s team is here to clarify the difference between them. Join us today and learn which kind of transfers will suit your needs best.
But before getting to the main topic of the article, here’s a quick reminder. SEPA transfers are a type of transaction made in euros, which occur within the SEPA zone on a bank-to-bank basis. Right now, 36 countries are a part of the Single Euro Payments Area. These are all the EU members and 9 other countries. For the full list, check out our recent article on the SEPA zone.
To transfer funds, you’ll require the receiver’s full name, their IBAN, and a BIC number (not always). Now that we’ve explained the main things to know about the topic discussed, let’s find out what is a SEPA Credit Transfer.
SEPA Credit Transfer
It is where it all started. The SEPA Credit Transfers (SCT) was established in 2008. It was the first kind of scheme aimed at substituting and perfecting domestic transfers within the eurozone.
The European Union aimed to make the SEPA Credit Transfers faster and cheaper (or at least the same price) than the domestic ones. And, as we know now, the initiative was a success.
As you might have guessed, the SCTs are just a money transfer between the two bank accounts. Just go on and use your bank’s mobile app or a web browser version, or go to the branch directly and order an SCT. Don’t forget to find out the beneficiary’s IBAN and SWIFT code.
The transfers are carried out in euros and usually take one working day to arrive in the receiver’s bank account. Please note that the payment completion times can be longer due to the time of day you made them and if any celebrations/bank holidays take place.
SEPA Direct Debit Transfer
A year after the SCT scheme establishment passed, another payments scheme came to be. We are talking of course about SEPA Direct Debit or SDD for short.
So, what’s the difference between SCT and SDD? Generally, the direct debit is a type of payment that is pre-authorized: rather than initiating it yourself, you allow a third party to withdraw funds from your account. Before any transactions can occur, you and the debtor (the third party) need to sign the direct debit mandate, which contains the terms of such payments. SEPA DD works the same way, but the payments are in euro and occur within the SEPA zone.
Where SCTs are used for singular payments, SDDs are more common when it comes to recurring transfers. With it, you can pay your monthly electric bills, or buy a subscription for your favorite streaming service, etc!
Core Direct Debit (SDD Core) and B2B Direct Debit (SDD B2B) are the two types of SEPA Direct Debit payments. Here’s how they differ:
- Both personal users and companies can take part in the SDD Core, while the SDD B2B only occurs between the enterprises;
- In the case of SDD Core, the bank’s/PSP’s involvement is mandatory. With the SDD B2B – it’s optional;
- The payer can request a refund 8 weeks after the due date of the SDD Core. There are no refunds when it comes to SDD B2B;
By the way, Genome has a separate article on what is a SEPA Direct Debit, its benefits, and how to make direct debit payments.
SEPA Instant Credit Transfer
Last but not least, let’s uncover what is a SEPA Instant Credit Transfer (SCT Inst). This scheme is relatively new, started working in 2017, but became a welcoming addition to the SEPA scheme family nonetheless.
The main advantage of the SEPA Instant Credit Transfers is that they are carried out instantly – just within 10 seconds or even less on any day of the week! Remember that basic SCTs take at least one business day to complete and can take longer due to weekends/holidays, so SCT Inst is a huge improvement.
Unfortunately, there are a couple of limitations. Not all countries and banks within the SEPA zone have implemented the SCT Inst scheme. As of September 2021, 24 out of 36 countries participate in the SEPA Instant Credit Transfer scheme: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Portugal, Slovenia, Spain, Bulgaria, Denmark, Poland, Sweden, the UK.
Overall, there are 2304 SCT Inst scheme participants, compared to 3901 SCT scheme participants.
Another crucial factor to consider is that the SEPA Instant Credit Transfer limit is 100,000 EUR.
How can Genome help?
Do you need an easy way to send SEPA transfers? Then Genome is right up your alley!
You can go to my.genome.eu right now and get yourself an IBAN after a quick and simple onboarding. Provide some information about you and pass the identity verification.
Need to make SEPA payments as a business owner? No worries, the application process for Genome’s business account is easy and online as well.
You can send funds instantly to other Genome users with our internal transfers!
What is the SEPA payment method?
This kind of payment is performed in euro and between the SEPA countries. SEPA Credit Transfers, SEPA Instant Credit Transfers, Sepa Direct Debit are the types of payments we described in this article.
What is the difference between SEPA and non-SEPA payments?
The main difference compared to other transfers is that all the payments are carried out in euro and made within the SEPA zone.
Is SEPA a payment system?
The Single Euro Payments Area is first and foremost an initiative of the European Union for harmonizing the payments across Europe.
Where is SEPA used?
SEPA transfers are mainly used in Europe, as they were established as a substitute for domestic transfers within the eurozone.