Payments within the Euro zone and SEPA zone from one bank account to another are generally speaking free or at nominal charges below €1. .
BUT often bank customers end up paying €30 for a SEPA transfer by making an expensive SWIFT wire transfers by mistake. As there are over 1000 banks in Europe each with their own online banking system, it is nearly impossible to create a guide that will work for all users,
Here are three reason why this happens
- A) User mistake: users stil dont understand SEPA and hence chose the wrong option while making their payments.
- B) Some Banks are tricking customers to use SWIFT instead of SEPA as they earn €30 on SWIFT transfers as compared to making SEPA. We know of a cusotmer who was mistakenly using SWIFT when they could have used SEPA which cost them an extra €2500 a month!
- C) Bad online banking systems: this is a major reason. Lot of the banks have very complex online banking systems which confuse users. Due to old technology they are not as user friendly leading to customers making mistakes.
The result of sending a SWIFT payment to a SEPA account is:
- 1) Additional cost of €30
- 2) SWIFT is slow leading to 1-2 days delays
- 3) Lot of SEPA accounts dont accept SWIFT transfers which means that the payment will be rejected.
- 4) Rejected payments take upto a month to be returned back to the sender!
Here are some red flags you should watch out for which will probably indicate that you are making a SWIFT or an international wire transfer instead of SWIFT:
- 1) They ask for the receivers address.
- 2) They ask for the receivers bank or branch address.
- 3) They ask for a SWIFT code
- 4) A large fee is being charged (€10 to €150)
- 5) Words like SHA or OWN are mentioned
- 6) Complex accounts information
- 7) Branch or account number
Comparing difference in sending payments between SEPA vs SWIFT or International wire.
| Detail requirement | SEPA | SWIFT or Wire Transfers |
|---|---|---|
| Name of Beneficiary or receiver | Yes (can be optional) | YES |
| IBAN | Yes | YES |
| BIC | Optional | YES |
| Payment reference | Optional | YES |
| SWIFT | NO | YES |
| Beneficiary address | NO | YES |
| Beneficiary Bank details | NO | YES |
| Account number / branch code | NO | YES |
| Specific Currency | NO (always EURO) | YES |
Additional resouces
- SEPA vs SWIFT what is the difference?
- What is the difference between SEPA and SWIFT
- About SWIFT transfer and its history
- Are you being overcharged for SEPA payments?
*Beneficiary means the person/company you are sending the money to