SEPA, the Single Euro Payments Area, is the reason most Europeans use their IBAN every month. Inside SEPA a euro transfer to another country works like a domestic one, and the IBAN is the only account number you need.
What SEPA is
SEPA is a set of common rules and payment schemes for euro credit transfers and direct debits. According to the list of SEPA countries published by the European Payments Council in December 2025, it covers 41 countries:
- the 27 member states of the European Union
- Iceland, Liechtenstein and Norway, from the European Economic Area
- Albania, Andorra, Moldova, Monaco, Montenegro, North Macedonia, San Marino, Serbia, Switzerland, the United Kingdom and Vatican City
Some territories take part too, such as Jersey, Guernsey, the Isle of Man and Saint-Pierre-et-Miquelon. The United Kingdom stayed in SEPA after leaving the EU, by a decision of the European Payments Council in 2019.
SEPA covers payments in euro. A transfer in pounds, Swiss francs or another currency follows different rules, even between SEPA countries.
How the IBAN became mandatory
The decisive step was Regulation (EU) No 260/2012, the SEPA Regulation. It required banks to use the IBAN to identify accounts and the ISO 20022 XML format for payment messages, with these deadlines:
| Date | What happened |
|---|---|
| 1 February 2014 | Euro transfers and direct debits in the euro area must follow the SEPA rules |
| 1 August 2014 | End of the transition period for old national formats in the euro area |
| 1 February 2016 | Banks can no longer ask for the BIC on cross-border payments |
| 31 October 2016 | Deadline for EU countries outside the euro area |
For domestic payments, the ban on asking for the BIC applied from 1 February 2014, although countries could postpone it to 2016. Since then, an IBAN is all a customer has to give.
Any SEPA IBAN must be accepted
Article 9 of the SEPA Regulation is often called the ban on IBAN discrimination, although the regulation does not use that phrase. A company that pays you, or collects a direct debit from you, may not demand that your account is in a particular EU country, as long as the account can be reached through SEPA. An employer in France has to accept a salary account in Germany, and a gym in Italy has to accept a direct debit from a Spanish account.
The rule binds countries that apply EU law. Non-EEA countries that joined SEPA, such as Switzerland and the United Kingdom, take part in the payment schemes without being bound by the regulation.
Verification of Payee
Since 9 October 2025, under Regulation (EU) 2024/886, banks in the euro area must check that the IBAN you enter matches the name of the person or company you are paying, before you confirm a transfer, at no charge. If the name and the IBAN do not match, the bank warns you. Banks in EU countries outside the euro area have until 9 July 2027.
This check makes test IBANs even less likely to cause harm by accident: a generated IBAN has no name attached, so a real transfer to it would be flagged.
What SEPA did not change
SEPA did not create a single IBAN format. A German IBAN still has 22 characters and an Italian one 27, because each country keeps its own BBAN; see IBAN formats by country. When Croatia and Bulgaria adopted the euro, in 2023 and 2026, their IBAN formats stayed the same.
Sources
- Regulation (EU) No 260/2012: the SEPA Regulation, with the IBAN rules and deadlines (Articles 5, 6 and 16) and the ban on refusing accounts from other EU countries (Article 9).
- Regulation (EU) 2024/886: instant credit transfers in euro and Verification of Payee.
- European Payments Council: EPC409-09, EPC List of SEPA Scheme Countries, version 8.0 (December 2025).
- European Central Bank, SEPA: an overview of SEPA and its 41 countries.