If you have ever been an expat in Europe, or doing freelancing for a European client, or tried to send money to family across the border, then you've probably made international bank transfers.

One term you'll see everywhere is "SEPA." But what is it, really? Is it a type of bank? A special code? Why do some transfers cost a fortune while others are free?

Don't worry, we’ve got you covered. This guide will demystify what SEPA transfers are in plain English. We'll explain how they work and how you can use them to manage your money simply and affordably.

Let's start with the basics. SEPA stands for the Single Euro Payments Area, a unified payments system that was officially introduced in 2008.

It’s essentially a club of countries that have agreed to make sending and receiving payments in euros as easy as making a domestic transfer. SEPA’s main goal is to create a single, borderless market for euro payments. So, sending euros from your account in Portugal to a friend's in Germany is just as simple, fast, and cheap as sending it to your neighbour next door.

Basically, a SEPA transfer is a euro payment sent between IBAN accounts.

The list of SEPA countries is quite extensive and includes all members of the European Union (EU), as well as countries in the European Economic Area (EEA) such as Norway, Iceland, and Liechtenstein. Additionally, several non-EEA countries like Switzerland, Monaco, San Marino, and the Vatican are part of the SEPA zone.

Note that the United Kingdom is no longer a full SEPA member following Brexit, although some banks in the UK continue to support SEPA payments through specific arrangements.

If we look back before SEPA, every cross-border euro transfer was a complex international transaction. Now, if your financial institution in a SEPA country is connected to the SEPA network, having an IBAN account means sending euros is fast and straightforward.

When you make a SEPA transfer, you are using one of four main payment schemes governed by the European Payments Council (EPC): SEPA Credit Transfer (SCT), SEPA Instant Credit Transfer (SCT Inst), SEPA Direct Debit Core (SDD Core), and SEPA Direct Debit B2B (SDD B2B). Each scheme follows different processes but all facilitate euro payments across SEPA countries. The most commonly discussed are SCT and SCT Inst: SCT typically settles by the next business day, while SCT Inst allows instant payments within seconds, 24/7. Generally, you will need the recipient’s name and IBAN (International Bank Account Number), and the banks on both ends use the standardized framework to process payments securely and efficiently.

Essentially, it removes the need for multiple intermediary banks, which is why the fees are so low (or often, free) and the process is much faster than old-school international wire transfers.

This is a very common point of confusion. Well, to simplify we created this comparative table:

SEPA’s biggest benefit is its cost. Under SEPA regulations, the fee for a cross-border SEPA transfer cannot be higher than the fee for an equivalent domestic transfer. For many modern digital banks and fintech services, this means SEPA transfers are often free. At Blackcat, we offer free incoming transfers and your first five outgoing transfers each month at no cost.

The timing of SEPA payments depends on the payment scheme used. With SEPA Credit Transfer (SCT), funds typically arrive by the next business day after the payment is sent. However, SEPA Instant Credit Transfer (SCT Inst) allows payments to be processed and credited within seconds, 24/7, as long as both the sending and receiving banks support this instant scheme. Other SEPA protocols like SEPA Direct Debit have different timelines depending on the type and process, but SCT and SCT Inst are the most commonly used for fast euro transfers.

Sending a SEPA transfer is a straightforward process. While the exact interface varies by bank, the required steps are standard:

1. Log in to your bank account.
2. Navigate to the section for sending money. Choose the option for a standard or international transfer.
3. You will need two key pieces of information: The recipient's full name, and their IBAN.
4. Enter the amount you wish to send in euros (EUR).
5. Double-check all the details for accuracy and confirm the payment. In most cases, funds should arrive on the same or next business day.

Understanding SEPA is one thing, but using it easily is another. This is where we saw an opportunity to make things better. For expats, freelancers, digital nomads, and crypto users, having a simple, reliable way to manage EUR payments is essential.

At Blackcat, we provide you a free of charge European IBAN account, which means you're fully equipped to send and receive SEPA payments. Here's how we make it even better for you:

• We offer 5 free SEPA transfers per month with no limits on the amount. This covers the needs of most individuals for sending money, paying bills, or receiving payments.
• Your EUR IBAN account is linked to your crypto wallet (provided by Manerio UAB) within the Blackcat app. This provides a simple and secure way to convert crypto to fiat and back. It’s perfect for when you need to cash out earnings or investments.
• You can easily receive your salary or client payments directly into your Blackcat account via SEPA, just like with any traditional bank.
• We believe your money should work for you. That's why we offer up to a 4% per annum reward on the EUR balance you hold in your account, providing a source of passive income without needing to lock up your funds.

SEPA transfers have truly made it simpler, faster, and cheaper to move money across Europe. By dissolving financial borders, it empowers people to live, work, and connect more freely. And with a service like Blackcat, you not only get easy access to all the benefits of SEPA but also added perks that help you get more out of your money.