You may have often encountered the terms SEPA or SWIFT when making bank transfers, but you never knew exactly what these terms meant? Both are ways of making intentional payment, banks needing a safe way to communicate financial information internationally.
SEPA (Single Euro Payments Area) is a euro payment system included in the countries of the European Union and in the other European countries. SEPA was created to facilitate intra-community payments in Europe through the standardisation and simplification of euro transactions.
SEPA is regulated by the European Central Bank and the European Government, and its use is mandatory for all financial institutions in the countries included in the area. SEPA allows euro transactions to be made quickly and cheaply, similar to the way dollar transactions are made in the United States.
To use SEPA, a financial institution must register as a member of the SEPA system and receive a unique identifier code known as "IBAN" (International Bank Account Number). This IBAN code is used to identify the financial institution's bank account within the SEPA system and to allow intracommunity fund transfer.
SEPA is an important step in the integration of Europe's financial markets and facilitates intra-community trade through the simplification and standardisation of euro transactions.
In addition, through this article we would like to inform you that TOKERO exclusively uses SEPA transfers.
Currently, SEPA is implemented in the following countries:
In total, SEPA includes approximately 38 countries and over 500 million consumers and businesses.
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is an international banking transfer system that allows financial institutions worldwide to exchange information about banking transactions. SWIFT was created in 1973 to facilitate the transfer of financial information between financial institutions in different countries and quickly became one of the most important international financial institutions.
SWIFT operates through a network of message centres, known as the "SWIFT network", which connects financial institutions worldwide. The use of SWIFT is voluntary and is not limited to euro transactions, but can be used for transactions in any currency.
To use SWIFT, a financial institution must register as a member of the SWIFT network and receive a unique identifier code known as the "BIC code" (Bank Identifier Code). This BIC code is used to identify the financial institution within the SWIFT network and to allow the transfer of information about banking transactions.
SWIFT provides an efficient and secure banking transfer mechanism that is used by financial institutions worldwide to conduct international transactions.
The main differences between SEPA and SWIFT are:
Despite the differences, both share the same goal – to provide fast, safe and trustworthy money transfers to people and businesses.