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Sometimes, the world of finance and money circulation is difficult to understand just because banks decided to use complicated terms like SEPA and SWIFT, which don’t mean anything for us regular people.

But if you are someone who likes to initiate a cross-border transaction or someone who has a company that has many foreign transactions, you might want to learn a thing or two about SEPA and SWIFT.

Why? Well, the type of transfer and network you use can directly affect your transaction processing time, costs, and documents you might need. These networks are set up by banks, so we have to follow their rules.

If you’ve ever sent money to a different country, then you are already familiar with SEPA and SWIFT. But we are interested in what makes these two money transfer networks so different?

Let’s analyze them side-by-side, find out which is better to use for a specific scenario, and where it is most efficient to send money.

Location of the Transfer

You have to look at SWIFT and SEPA as two different roadmaps for your money. Yes, their goal is the same, but they have different principles.

SWIFT (Society for Worldwide Interbank Financial Telecommunications), is a global giant that is responsible for connecting 11,000 banks across 200+ countries. This is a network used for international money transfers anywhere in the world.

On the other hand, SEPA (Single Euro Payments Area) is more focused on the European region, and it covers only 39 countries. In other words, you cannot use the SEPA network if you are sending money from Switzerland to Brazil.

The goal here is to find the network that will get your money from point A to point B in the most efficient way and with the lowest cost possible. Therefore, if you are sending money from Berlin to Dublin, it is best to use SEPA streamlined route since the transfer will be cheaper and faster. However, if you are sending dollars to Shanghai from Italy, then you have to rely on the SWIFT network since the SEPA is only limited to European countries.

Currency Flexibility

Your business deals in dollars, pounds, or euros—SWIFT doesn’t care. It handles any currency, converting funds before or after transfer, making it ideal for a U.S. firm paying an Australian supplier in AUD.

SEPA, though, is a euro purist. It only processes euro-denominated payments, so if your UK-based business needs to pay a Swedish client in SEK, you’re out of luck with SEPA. This makes SEPA perfect for eurozone businesses keeping things simple, like a Paris retailer settling with a Milan wholesaler.

For multi-currency deals, SWIFT transfers are the way to go. Pick your currency, confirm your bank’s conversion rates, and you’re dodging surprises like a pro.

Speed of Transactions

Time is money, and SEPA’s got the edge here. Standard SEPA Credit Transfers (SCT) land in one business day, while SEPA Instant Credit Transfers (SCT Inst), mandatory for eurozone banks by January 2025, hit accounts in under 10 seconds.

SWIFT, however, can feel like a slow boat. Transfers take 1-5 days, depending on intermediary banks—sometimes three or more—each adding a processing step.

A payment from New York to Mumbai might crawl through multiple banks, while a SEPA transfer from Amsterdam to Lisbon zips through overnight. For urgent payments, check if your bank supports SCT Inst, or brace for SWIFT’s longer haul. Plan your transfer timing, and you’re keeping your suppliers happy like a well-timed delivery.

Cost Comparison

Every penny counts in business, and SEPA’s a budget superhero. EU rules ensure SEPA transfers cost the same as domestic ones—often free or under €1—thanks to regulations like EC No 924/2009.

SWIFT, on the other hand, can hit your wallet hard. Fees range from €10-€50 per transfer, with intermediary banks tacking on charges as high as €70.

A 2024 report noted SWIFT’s average cost at €20-€30, while SEPA’s low fees make it a no-brainer for eurozone payments. If you’re sending euros within Europe, SEPA’s your money-saver; for global transfers, budget extra for SWIFT’s fees. Compare your bank’s pricing, opt for SEPA when possible, and you’re stretching your cash like a savvy CFO.