Are you receiving or making payments in euros? The single euro payment area (SEPA) can help you save some money. Here is all you need to know about SEPA and how it can be beneficial to you and corporates.
What is SEPA payment?
SEPA or the Single Euro Payment Area was created by the European Union to enable businesses and individuals to make euro transfers using International Bank Account Number (IBAN) and set rules and conditions. It gives people and corporates a fast, secure, and standardized way to receive and make euro payments.
All SEPA payments within the euro and SEPA zones are 100% free. You can make payments to your vendor’s bank account without spending a dime.
56 countries across the globe are or are in the process of participating in SEPA. You can transfer money from one country to another faster and at a minimum transfer rate provided you and the receiver are both in SEPA zones.
Benefits of SEPA payments
SEPA payments are beneficial to both individuals and corporates. The most notable benefit is the ability to make cross-border payments faster and without a high transaction fee that is associated with an international wire transfer. SEPA payments also eliminate the need for paper checks.
How SEPA bank transfer can help you save money when buying Bitcoin
Using SEPA to buy Bitcoins is highly recommended, as most exchanges will charge you little to no fee. Some exchanges will also give you a higher buying limit since they are not concerned with chargebacks. Many exchanges charge high fees on both debit and credit card purchases because they want to cover the risk of not getting paid after selling Bitcoins. Some exchanges will not charge you any deposit fee at all.
If you buy Bitcoins worth € 10,000 from CEX.io using your credit card, about 8% of your purchase is charged a fee to cover the risks. That means you will not get € 800 worth Bitcoin. The more Bitcoins you want, the more money you are losing, plus the exchange may also limit your purchase to below € 10,000.
The only problem with SEPA transfer when buying Bitcoin is that all transfers must be cleared by more than one bank on its way to the bank.
Using SEPA does not mean you will not be charged any fee. Exchange charges three different types of fees: deposit, trading, and withdrawal fees. Using SEPA payments will help you save money on deposit and withdrawal fees only. You also need to note that even if the exchange fee is 0%, you will still have to pay for the transaction itself (converting fiat to Bitcoins). Make sure to read about how to buy bitcoin with SEPA bank transfer to get more insights about the different ways you can use to buy Bitcoins with SEPA and which one is the most convenient for you.
Mistakes to avoid when using SEPA payment
All SEPA payments within the euro and SEPA zone from one bank to another should be free or charge a minimum of € 1. Unfortunately, some people are making simple mistakes and ending up paying € 30 for one bank transfer. They mistakenly make an expensive SWIFT transfer. There are more than 1000 banks in the eurozone, and it is difficult to make one guide that will work for all users. To help you avoid this common mistake, here are the reasons why you might be using SWIFT transfer unknowingly instead of SEPA:
Bad online banking systems
Many banks in Europe have complex online banking systems that may confuse you. These banks are still using old technologies. To avoid confusion, you should be careful and make sure to click the right button. Some users don’t understand SEPA well, and they end up choosing the wrong options when making payments. Be careful when making SEPA payments, all transactions are irreversible, and that’s why many merchants prefer it. Once the transaction is complete, there is nothing that you can do.
Your bank may be tricking you
Banks are in the business of making profits. They will do almost everything to increase their profits. One of the many things they do is tricking their customers. When you make a SEPA transfer, the bank does not earn anything. They are tricking customers to use SWIFT instead of SEPA. When you use SWIFT, your bank makes a profit. You should be careful when making online payments and transfers. Make sure you understand every option you are selecting.
Remember, SWIFT will charge you € 30 for every transaction. If you are making 30 transactions in a month, you will be losing € 900 every month.