What’s the difference between SWIFT and SEPA payments?

SWIFT and SEPA are two common acronyms you might have heard of. Both are ways to help you transfer money from one country to another, but they work in different ways, cover different parts of the world, operate at different speeds, and come with different costs. Understanding these differences can help you save money and avoid delays when you’re sending currencies abroad.

In this article, we’ll explain how each system works and the main differences between them.

What’s a SEPA payment?

SEPA stands for the Single Euro Payments Area. It’s a system designed to make sending euros across borders as easy, fast and secure as a bank transfer within the UK. Currently, the SEPA network includes 41 countries, covering the UK, countries in the European Union, and a few others with close economic ties to Europe.

When you make SEPA payments, you can expect:

• Euro transfers only: the system only processes payments in euros. Even if your account is in pounds, the money will be converted to euros when it travels through the SEPA network.

• Fast processing: payments usually arrive by the next working day. And if your bank supports SEPA Instant, the money can arrive in seconds, any time of day or night.

• Low-cost: SEPA transfers are often low cost because they use a standardised system for euro payments across participating countries. In the EU/EEA, banks generally charge the same for a SEPA transfer as they do for a local transfer. But SEPA payments aren’t always free – your bank or payment provider may charge a transfer fee, and if your money needs converting into euros, foreign exchange costs can apply too.

• Minimal details: to send someone money, you just need their name and International Bank Account Number (IBAN).

What’s a SWIFT payment?

If you’re sending money outside of Europe or in a currency other than euros, you might use the SWIFT payment system. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. (It has nothing to do with Taylor Swift.)

Rather than actually moving the money, SWIFT is a highly secure global messaging network that banks use to send payment instructions to each other.

Here’s what you need to know about the SWIFT international payment system:

• Global reach: it connects thousands of financial institutions around the world, allowing you to send money to almost any country.

• Multiple currencies: you can send and receive money in dozens of currencies, so it’s incredibly versatile.

• Go-between banks: because banks don’t always have direct relationships with each other, a SWIFT payment might pass through one or more connecting banks before reaching its destination.

• More details required: to send money, you’ll need the recipient’s account details and their bank’s SWIFT code (also known as a BIC, which stands for Bank Identifier Code).

SWIFT payments generally take a bit longer than local or SEPA transfers – usually arriving within one to four working days.

Key differences between SWIFT and SEPA payments

When you're setting up international transfers and payments, it helps to understand how the two systems compare across a few important categories:

SWIFT and SEPA for international payments

Whether a payment uses SWIFT or SEPA depends on where you’re sending money and the currency you’re using.

If you’re sending euros to a bank account in the SEPA area, your payment will usually use SEPA. SEPA is designed for euro payments between participating countries, so they’re often quicker and cost less than SWIFT payments.

If you’re sending money outside the SEPA area, or in a currency other than euros, your payment will usually use SWIFT. SWIFT connects banks around the world, making it possible to send money to more countries and in more currencies.

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Explore international transfers with Monzo.

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Questions? Answers.

What’s the difference between SWIFT and SEPA payments?

SEPA is a European network for sending euros quickly and cheaply. SWIFT is a global messaging network banks use to help you send money worldwide in multiple currencies.

What’s a SEPA payment and how does it work?

It’s a bank transfer that lets you send euros to 41 countries in the SEPA zone. It works just like a local transfer, usually arriving by the next working day.

What’s a SWIFT payment system?

It’s a secure messaging network that banks use to send payment instructions to each other across the globe, rather than moving the money directly.

How long do international SWIFT payments take?

They typically take between one and four working days, depending on where the money is going and how many go-between banks are involved in the process.

Are SEPA payments free?

They usually cost the same as a local bank transfer, which means they are often free or very cheap, depending on your bank’s specific pricing.