Introduction
For fintech companies in Europe, accessing the Single Euro Payments Area (SEPA) is essential. Whether you're building a lending platform, a neobank, or an investment app, SEPA connectivity ensures your product can send and receive euro payments securely and efficiently. This guide explains the steps, benefits, and technical setup to become a SEPA participant.
What is SEPA?
SEPA, or Single Euro Payments Area, enables streamlined euro payments across 36 European countries. It standardizes credit transfers, direct debits, and instant payments, making cross-border transactions within Europe as easy as domestic ones. It is backed by the European Central Bank (ECB) and national banks.
SEPA Member Countries
- 27 EU countries
- 4 EFTA members: Liechtenstein, Norway, Iceland, Switzerland
- 4 microstates: Monaco, Andorra, San Marino, Vatican City
- United Kingdom (post-Brexit)
Benefits of Becoming a SEPA Participant
1. Your Own BIC and IBANs
Fintechs can issue IBANs in their own name and country, improving trust and local customer experience. No more relying on BaaS providers or foreign IBANs.
2. Speed and Control
Gain full visibility into SEPA payment flows and enjoy faster processing through closer integration with Clearing and Settlement Mechanisms (CSMs).
3. Cost Efficiency
Indirect participants often enjoy lower fees (2x–10x less) for SEPA transfers than corporate banking clients. You can also issue your own virtual IBANs at no cost.
Who Can Apply?
Both payment institutions (PIs) and electronic money institutions (EMIs) can apply for indirect participation. Most direct participants, however, are credit institutions.
Steps to Become a SEPA Participant
- Obtain a BIC from SWIFT
- Declare your intent to local regulators and the EPC
- Select a sponsor bank that supports your required SEPA schemes
- Open settlement and safeguarding accounts
- Integrate technically with the sponsor bank (often via an API-first platform like Numeral)
Operating as a SEPA Participant
Once onboarded, you must manage the following:
- Processing SCT and SCT Inst payments
- Handling R-transactions (refunds, rejections, recalls)
- Payment status reporting
- Settlement and safeguarding flows
Related Searches
- How to get a BIC code as a fintech
- SEPA direct vs indirect participant
- IBAN issuing as an EMI
- Numeral API SEPA integration
FAQ
- Do I need a banking license to become a SEPA participant?
- You need to be regulated as a PI, EMI, or CI. Only credit institutions can be direct participants.
- What’s the difference between direct and indirect participation?
- Direct participants connect directly to CSMs. Indirect participants connect via a sponsor bank.
- Can I issue IBANs in different countries?
- Yes, if you have a local presence and a registered BIC in that country.
