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April 22, 2022

SWIFT and SEPA Credit Transfers: what are the differences?

Transfers promote the development of trade througout Europe and worldwide. They allow money transfers from one account to another, without the need for a bank card, check or cash.
When making a transfer, the issuer gives an order to his/her bank or payment institution to transfer money to the account of a beneficiary.
Transfers differ depending on the area where they are sent and received. The main distinction between SEPA and SWIFT transfers lies here.

I - Types of transfers

A - The SWIFT transfer

The SWIFT international payment system (Society for Worldwide Interbank Financial Telecommunication) is used in more than 200 countries and is one of the largest in the world.

The SWIFT network makes it possible to invoice and cash international transactions through transfers to and from many countries in various currencies. SWIFT transfers are also called “Outside SEPA” or “Outside SEPA Zone” transfers.

A SWIFT transfer can be one-off or permanent. It takes on average between 1 to 3 working days. If the payment process involves more than one currency, it can last up to 5 working days, depending on factors such as the time of the transfer, the time difference, the recipient establishment. As for costs, they depend on the structures involved (traditional banks/online banks for example) and the means of issue (at the counter or online) but generally include processing fees and the exchange commission. Other factors may influence as well, in particular the bulk amount, the volume of transfers made per month, etc.

What is a currency? How does it work?

According to the Journal du Net's definition, "the term currency is used to designate the currency of a country other than one's own". Each country therefore has its own currency, which is usually controlled by a central bank.

The currency rate is used to determine the exchange rate between two currencies. In other words, it converts the value of one currency into another. Each currency is therefore quoted on a currency market and can be freely exchanged for another. However, there are currencies that are not convertible.

By the way, Currency, Why Not Money ?

The term currency designates the money of a country other than yours. Each country can mint its own money generally under the control of a central bank. When a conversion takes place from one to another, then the term currency supercedes the term money.

The currency rate is used to fix the terms of exchange between two monies. In other words, it converts the value of one money into another. The currency market lists all these rates and adapts them permanently, depending on offers and demands. Most of them can be freely exchanged for another but some are non-convertible.


The SEPA network (Single Euro Payments Area) allows to make transfers in euros within the European Union in a safe and easy way. The SEPA network covers the 30 countries of the European Economic Area (the 27 member countries of the EU plus Norway, Iceland and Liechenstein) as well as Switzerland, Andorra, Monaco, San Marino and the Vatican.

So useful for consumers, businesses, merchants and administrations !

SEPA transfers can be occasional or regular. The Banque de France indicates that “the time for execution of a SEPA transfer is a maximum of one working day from the time of receipt of the transfer order by the issuer's bank". An additional working day is added for SEPA paper credit transfers.

Since November 2017, a new method of payment called « Instant Sepa Transfer » has been added to the classic Sepa Transfer. This new feature makes it possible to transfer in less than 10 seconds 24/24 and 7/7 a sum of money in euros from one account to another, between two establishments in the SEPA zone offering this method of payment. This optional service is not provided by all establishment but only by some payment institutions specialize in Sepa Direct Debit payment transactions such as Olkypay.

The law sets a maximum of €100,000 per Instant Transfer. While few banks or payment institutions process instant transfers, even fewer accept the maximum amount. It is often capped at €15,000. Bear in mind that Olkypay accepts the maximum limit of €100,000 per transfer.

II - What Are the Differences Between SWIFT and SEPA ?

A - Points of divergence between SWIFT and SEPA transfers

Each has its own characteristics.

The first differentiating element is linked to the geographical area.

The SWIFT transfer can be used anywhere in the world, beyond the borders of the SEPA zone

The second element deals with the currency.

With SWIFT, money can be sent in any currency as Euro is the standard for SEPA. Nevertheless it is possible to send the recipient of a SEPA transfer a currency other than the euro. Indeed, when the recipient country does not have the euro as its national currency, the bank is responsible for converting the euros into the currency of the country. In all cases, the transfer itself is made in euros.

The third differentiating criterion is the duration of treatment.

SWIFT requires a longer time than SEPA.

The last but one is price. SWIFT is more expensive because it involves several intermediaries for proper execution.

The last is simplicity. SEPA is easier to implement because the standardization of IBAN (International Bank Account Number) in the SEPA zone makes the BIC (Bank Identification Code) unnecessary. This standardization of coding means that it is embedded in and derived from the IBAN. On the other hand, both BIC (also called SWIFT Code) and IBAN are mandatory for SWIFT transfers.

B - Which Solution for Your Business ?

If your clientele is mainly located outside the euro zone and you need to make incoming and outgoing transactions in various currencies, you better choose an institution that offers SWIFT transfers.

If you intend to do business in the SEPA zone (whether in euros or in local currency) and want ease and speed in your transactions, go to an establishment that offers SEPA transfers.

In the end, the choice depends above all on your needs. To find the establishment that will suit you, we advise you to compare and study the options described above, basically traditional banks vs online banks or payment service providers crossed with SWIFT vs SEPA.

Remember that payment institutions such as Olkypay are 100% digital. To find out more, visit Olkypay.com.