How To Reduce SEPA Payment Errors And Rejection Costs


What does SEPA stand for?

The Single Euro Payments Area allows people and businesses throughout Europe to process and receive credit transfers, Direct Debits, and card payments just as easily as they would domestically.

Before SEPA, transferring money between European countries could take significantly longer than a domestic transaction, and the recipient would usually have fees deducted from the overall amount. Since 2009, SEPA payments carry no charges, regardless of currency or location.

 europe financial


How businesses can benefit

Businesses can process payments throughout Europe with no extra charges or delays, making it easier for them to do business with international customers.

Previously, UK businesses trading internationally would have needed bank accounts with different area codes, requiring a lot more admin and management. Online payments can now be processed through an account regardless of its European country code, meaning cross-Europe transactions are significantly more reliable for businesses and their customers, both individually and in bulk.


Understanding SEPA errors

The most common errors are caused by customers. When banking information is typed incorrectly, the whole transaction will fail. This is usually an accident termed ‘fat-finger error’, which can prove to be very costly for businesses to fix.

There are numerous types of SEPA return codes, including insufficient funds, duplicate collection, and regulatory reasons. The most easily preventable from a business perspective are AC01 (invalid IBAN) and RC01 (invalid BIC).


International Bank Account Number (IBAN)

A code generated when sending/receiving international payments, in addition to your usual account numbers. It’s part of an ‘internationally agreed’ system that translates across all borders, preventing miscommunication.


Bank/Business Identifier Code (BIC)

A code generated to identify a bank and specific branch, or a specific business. BIC used to be specific to just banks, but some businesses use them to identify their transactions.

 reduce sepa payment errors

How to prevent and reduce SEPA payment errors:

Despite SEPA, payment errors are still commonplace. Each failed payment processed through a business could cost £50 in charges, time spent fixing the error, resending costs, and exchange rate fluctuations.

Validate API enables businesses and financial institutions to verify and cleanse bank payment details, removing processing errors as part of the user journey:

  • Automatically check and generate IBANs and BICs from domestic account details.
  • Enrich payment instructions with all bank details and standard settlement instructions.
  • Check global holiday data to avoid delays.
  • Process single and bulk payments.
  • Provide up to date global payment rules for compliance.
  • Provide Purpose of Payment codes.

Validate API by Apply Financial has saved over £125 million in operational costs for our clients and they’ve never lost a payment.

The  API validates international IBAN and BIC codes, and the 24/7 dashboard shows real-time volumes by user, currency and country, showing meaningful stats and figures. Validate is a tool trusted by major international brands and financial institutions, such as HSBC, Barclays, Axa and Easyjet.

Try our Failed Bank Payment Cost Calculator to find out how much your business could be saving in payment errors.

Try Our Free Failed Payment Costs Calculator

Topics: Payment Processing




We can validate BIC’s for over 220 countries In addition in over 170 countries we can validate domestic and International payment details and suggest changes to help you and your customers stay up to date and compliant with the evolving world of payment legislation and rules. Most of all we continue to add more countries to our Validate solution to present you with the de-facto standard in payment validation.

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