SWIFT and SEPA are two common cross border transfers. Both payment services make it possible for people to transfer funds between countries. However, while the two are almost similar, there is a difference between SWIFT and SEPA.
SWIFT stands for Society for Worldwide Interbank Financial Telecommunications, while SEPA stands for Single Euro Payments Area.
Difference Between SEPA and SWIFT Transfers
| SEPA | SWIFT |
|---|---|
| Supports money transfers in euro currency only | Supports money transfers in different currencies |
| Does not require Bank Identifier Codes (BIC) or SWIFT codes | Requires Bank Identifier Codes (BIC) or SWIFT codes |
| Transfers are limited to 36 countries within the SEPA region | Supports global transfers across over 200 countries |
| Requires euro account and the IBAN of the recipient | Requires BIC or SWIFT codes or IBAN for European accounts |
| SEPA transfers are processed within 1-2 business days | SWIFT transfers can take anywhere from 2 to 5 business days |
What is SEPA?
Single Euro Payments Area (SEPA) is a payment system within Europe that is used to send and receive money quickly. SEPA transfer system supports euro currency only and accepts payments within the SEPA countries only. To make a money transfer, you require the euro account and the IBAN of the recipient.
There are 36 SEPA-supported countries, and they include Austria, Belgium, Britain, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Poland, Portugal, Republic of Ireland, Italy, Latvia, Lithuania, Romania, Estonia, Finland, France, Germany, Greece, Hungary, Luxembourg, Malta, Netherlands, Slovenia, Slovakia, Spain and Sweden, Norway, Liechtenstein, Iceland, Switzerland and Monaco.
What is SWIFT?
The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is a money transfer system that powers international payments between financial institutions.
The sender must enter the SWIFT or Bank Identifier Code (BIC) or IBAN for European accounts and other details of the bank and the recipient to initiate a transfer. SWIFT supports transfers to over 200 countries across the globe and across different financial institutions.
SEPA vs SWIFT
The main difference between SEPA and SWIFT is the geographical scope. SEPA supports money transfers within the SEPA region, while SWIFT supports international money transfers across the world.
The other SEPA and SWIFT difference is the currency supported. SEPA supports the Euro currency only, while SWIFT supports multiple currencies used in different countries.
The other difference is that SEPA payments are pan-European transfers and are usually between the 36 countries that are members of the SEPA region, whereas SWIFT supports global transfers across over 200 countries and different financial institutions.
The other difference between SEPA and SWIFT is, to make a SEPA transfer, you need a euro account and the IBAN of the recipient. You don’t need Bank Identifier Codes (BIC). However, for SWIFT transfers, you need to enter BIC or SWIFT codes or IBAN for European accounts.
How are SWIFT and SEPA Transfers Similar?
While there are differences between SWIFT and SEPA, there are some similarities between the two. They include:
- Both of them support cross border transfers, with SEPA serving the Eurozone while SWIFT operates worldwide.
- Both SEPA and SWIFT provide a secure way through which banks communicate financial information with each other. Both SEPA and SWIFT provide the needed security.
- Both SEPA and SWIFT transfers involve bank-to-bank transfers, meaning that money is sent from one bank account to another.
- Both SEPA and SWIFT utilize electronic transfers from one bank to the other.
Difference Between SWIFT and SEPA
SEPA and SWIFT are common terms when it comes to cross border money transfers. The main difference between the two is geographical scope. SEPA supports money transfers with the 36 SEPA member states, most of which are within the European Economic Area (EEA) while SWIFT supports international money transfers across over 200 countries.