What is SEPA?

SEPA is short for Single Euro Payments Area. It is an EU banking sector initiative that standardises euro payments. The aim of this system is to make payments simple, fast and cost-effective as much as domestic payments, making the landscape a borderless one. Companies and consumers can now make euro credit and debit transfers across Europe under the same terms and conditions.

SEPA is an EU integration initiative in the area of payments, and a step forward in the completion of the EU internal market and monetary union.

When did SEPA become mandatory?

On February 1, 2014, the Single Euro Payments Area migration process ended and became mandatory.

What countries does SEPA cover?

SEPA covers 34 countries in all - the 28 EU members states including the 18 states in the Eurozone (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain); the 10 states not in the Eurozone (Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Lithuania, Poland, Romania, Sweden and United Kingdom); the 4 European Free Trade Association (EFTA) member states (Iceland, Liechtenstein, Norway, Switzerland); Monaco and San Marino.  

BNF Bank is SEPA compliant meaning that transactions made via BNF Bank will be seamless and effortless. We can answer any questions you might still have about SEPA and help you make the best of the SEPA benefits.

What are the benefits to the consumer?

An integrated payments area will help reduce costs, minimise processing risks, standardise payment formats and bank interfaces, and make new markets more accessible. Customers will receive all payments including social security benefits, salaries and pensions directly to a bank account in a timely and secure way. From one account consumers can make payments within and across SEPA countries as easily as if they were within national borders. Automation and centralisation will make payments simpler, more transparent and less costly, with fewer differences in bank fees across Europe and reduced fees in higher-priced markets.

International Bank Account Number (IBAN)  

The IBAN is a standard bank account number unique to the customer's account held at a bank. The IBAN makes cross-border payments efficient, fast, simple and secure, avoiding additional charges. The IBAN is made up of alphanumeric characters. The number of characters that make up the IBAN may vary from one country to another. A Maltese IBAN consists of 31 characters. This replaces the 11-character account numbers we have used so far. As from February 1, 2014, the IBAN must be used to affect all euro payments within SEPA countries, including payments within Malta. Customers may find their IBAN and the BIC (Bank Identifier Code) in their account statements, ATMs, cheque books and BNF Internet Banking.

SEPA Credit Transfer (SCT)

As from February 1, 2014, all local euro payments must be SEPA compliant, including Direct Credits. The most important points to remember are:

  • There is no limit on payment amount (subject to online terms & conditions);
  • The BIC and IBAN for the beneficiary is required;
  • Payments are made in full, and no deductions from the original amount are allowed. Both remitter and beneficiary are respectively charged with any fees by the paying bank and receiving bank respectively, and;
  • Outward SCT can be submitted in bulk via file upload on BNF Internet Banking for Corporate & Business Banking clients. The file has to conform to the SEPA XML standard.

SEPA Debit Transfer (SDD)

SDDs are a way of paying your bills directly. Local euro Direct Debit schemes will be phased out on February 1, 2014. The most important points to remember are:

  • an SDD needs to work in XML format; and
  • the BIC and IBAN of the beneficiaries are required to affect the transfer.

 Other methods of payment outside SEPA

  • payments can be made or received in all operating currencies, including euro;
  • urgent payments can be made on the same day, with same day value* (*cut-off time applies), anywhere in the world including SEPA countries;
  • non-SEPA payments may still be made through BNF Internet Banking, 24/7; and
  • payments can be done through SWIFT.

What companies should do

As from February 1, 2014, local domestic file formats will phase out and all Credit Transfers and Direct Debits will need to migrate to the SEPA XML. Companies are required to change the file format they currently submit to XML. If you do not use XML yet your IT supplier is able to get you compliant. Euro payments and collections will no longer pass through the Legacy domestic system and will no longer be available. Speak with your IT supplier to make sure that your accounting, payments and payroll systems are SEPA compliant. You need to ensure your systems can store BIC/IBAN details and produce XML format.

Useful Links

More information about the background to SEPA, and the EU Directives that regulate it can be found on the sites below:

Central Bank of Malta

Malta Bankers Association

European Payments Council

European Central Bank 

Payment Services Directive

Link to introductory video



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