The international payment ecosystem comprises a complex set of components that you must get to grips with to make cost-effective and efficient transfer.

Cross-border fees, foreign exchange rates, currency conversions, local regulations and selecting the right international payment gateway.

There is another – less documented – variable that can impact the cost of your international payments within Europe: whether to make a transfer via an international wire or SEPA. 

Having successfully navigated the unpredictable exchange rate landscape, transfer fees can be an unwelcome addition to the cost of your international payments if you don’t know your options – bringing international wire versus SEPA transfers into sharp focus. 

International wire transfers

You have probably heard of the term “wire transfer” – and you would be forgiven for erroneously assuming that it’s the only means of making an international payment. Put simply, a wire transfer refers to an electronic transfer of funds from one person or institution to another via a network that is administered by banks and transfer service agencies globally. 

Introduced in the early 1970s, SWIFT (Society for Worldwide Interbank Financial Telecommunications) has become a ubiquitous facilitator of inter-currency wire transfers. Almost every country in the world is connected to the SWIFT network, enabling local banks and institutions to process SWIFT transfers. Other secure systems that are used to send wire payment instructions include Fedwire and CHAPS.

SWIFT is considered one of the most convenient and secure ways to send money internationally – but not the cheapest because it often carries high fees. The fee you will be charged to wire money will vary based on where you’re sending it to, and what bank you use to send the money.

Typically, it’s considerably cheaper to send money domestically because fewer financial systems are required to facilitate the payment. Whereas the international payment process involves banks and wire processing services for each country – and with more financial services come more fees. Up to £40 can be charged for wiring money to an overseas bank account and up to £7.50 for receiving money from an overseas bank account. 

If that sounds like a hefty sum to pay for making a payment, wait until you hear how Britain’s departure from the European Union (EU) has shifted the landscape in Europe. Since Brexit, some European banks have begun charging a receival fee on wire transfers they deem to have originated from outside of the EU. So, with Britain well and truly outside the provisions of the bloc, fees of between 0.5% to 1% of the receiving amount are sometimes being levied on payments – which can add up to an eye-watering amount. 

An example of this, if you made a payment of €200,000 to a European bank via a wire transfer which applied a 0.5% receival charge, the fee paid would equate to €1,000. Therefore, sending European payments via international wire can, in certain scenarios, expose both the payee and the beneficiary to a level of uncertainty, with the latter not guaranteed to receive the full amount.

Unfortunately, there is not a definitive list of European banks that currently levy this charge, with more banks expected to follow suit. Thankfully, there is a cost-effective alternative: SEPA.













Single Euro Payments Area (SEPA)

Following a titanic political struggle, both domestically and with the European Union (EU), Brexit has seen the UK lose many privileges that came with being a member of the bloc. Thankfully, it remains a member of the Single Euro Payments Area (SEPA) – created by the EU to harmonise the way cashless payments are transacted across Europe, SEPA ensures cheaper, safer, and faster cross-border payments and transparent pricing via centralised payment schemes and standards.

SEPA comprises 36 members, including the 27 member states of the EU, the four-member states of the European Free Trade Association – Iceland, Liechtenstein, Norway, and Switzerland – and the UK. The European Payments Council (EPC) approved the continued participation of the UK in SEPA post-Brexit.

Under SEPA, banks are not permitted to charge more for cross-border payments than domestic ones, whether they are made in euros or not; therefore, they must be processed under the same terms, meaning receival fees should not be applicable.

When it comes to international wire versus SEPA transfers, the best choice is largely dictated by where you will be sending the money from, and where you’ll be sending it to. If you need to send euros from Britain to a bank account in the EU, a SEPA transfer is the savvy choice, as the provisions under the payment-integration initiative make it far cheaper – and you can rest assured that the beneficiary will receive the full amount.













Typically, SEPA transfers – which can only be made on bank working days – take just one business day to be processed and settled. However, the cut-off time to make a payment to a beneficiary on the same day is usually set for late morning and the cut-off time for a payment to be made on the next working day for late afternoon/early evening. In 2017, the EPC launched the SEPA Instant Credit Transfer scheme, which processes and settles payments in a maximum of 10 seconds – similar to domestic payments – and is unaffected by national holidays and weekends. 

So, while SWIFT payments can be quicker, the certainty that the full amount will be received via a SEPA payment often outweighs the potential one-day difference in receiving times.


Central FX

Frictionless international payments are a fulcrum of SEPA – and at Central FX we are determined to help you circumvent unnecessary transfer fees. As a currency specialist with a wealth of market knowledge and experience, Central FX can make international payments feel like local payments thanks to our transparent pricing. Our determination to remove any barriers that prevent you from making seamless cross-border transfers paves the way for a frictionless, cost-effective payments landscape.

To speak to us about how we can help protect your business from unnecessary transfer fees, any significant currency moves, provide a bespoke risk hedging strategy or assist with any other FX requirement you have, get in touch.