# SCT

> SEPA Credit Transfer

The classic SEPA credit transfer. Max one business day, free or near-free between EUR accounts; it is the instrument used for salaries, invoices and supplier payments.

_Category: technique_

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## Definition

The **SCT** (_SEPA Credit Transfer_) is the classic SEPA credit transfer: an account-to-account transfer in euros, across the ~40 SEPA countries, executed within a maximum of one business day.

Free or near-free, with no regulatory ceiling, it is the default mode for salaries, invoices and supplier payments — all the flows where instant speed is not critical.

## SCT vs SCT Inst: which to use

- **SCT** — up to one business day, generally free, no regulatory ceiling, available everywhere in the SEPA zone.
- **SCT Inst** — under 10 seconds, 24/7, ceiling of €100k, free for individuals in the eurozone since the IPR.

Simple rule: if speed is not critical, SCT; if you need to confirm the arrival of funds immediately, SCT Inst.

## How an SCT works

1. The payer (PAO) initiates the order with their bank (via app, web, or a PISP).
2. The bank checks the funds, authenticates (SCA if a new payee), then forwards it to a clearing system: CORE(FR) domestically, STEP2 cross-border.
3. The clearing system forwards it to the payee's (PR) bank, which credits the account.
4. Standard timing: D+1 business day at most, often a few hours in practice.

## What an SCT allows

- Transferring any amount in EUR (banks set their own anti-fraud limits).
- Including a reference (`Remittance Information`) of up to 140 characters.
- Being initiated by a PISP within the PSD2 framework.
- Being recurring via a standing order.

## What an SCT does not allow

- **Instant speed**: that is the role of SCT Inst.
- **Debiting the payee's account**: an SCT is always initiated by the payer; for a payee-side debit, you need an SDD.
- **A currency other than EUR**.
- **An automatic return**: once executed, it is irrevocable (recovery is possible but cumbersome).

## In the PSD2 ecosystem

The SCT is the foundational payment instrument in Europe: most of a lifetime's transfers are SCTs, even without knowing it — the "SEPA" label in the banking interface is the giveaway.

```mermaid
sequenceDiagram
    participant PAO as PAO (payer)
    participant ASPSP_P as Payer's ASPSP
    participant CLEAR as Clearing system<br/>(CORE / STEP2)
    participant ASPSP_R as PR's ASPSP
    participant PR as PR (payee)

    PAO->>ASPSP_P: 1. Initiates SCT<br/>(IBAN + amount + reference)
    ASPSP_P->>ASPSP_P: 2. SCA if needed<br/>+ funds check
    ASPSP_P->>CLEAR: 3. Submission to clearing
    CLEAR->>ASPSP_R: 4. Transmission
    ASPSP_R->>PR: 5. Credits the account<br/>(D or D+1 business day)
```

## Concrete examples

- **Salary**: the employer launches a transfer file on the 28th of the month; employees are credited on the last business day, no urgency.
- **Supplier payment**: a €12,000 invoice settled from a Qonto or Shine business account, credited the next business day, free of charge.
- **Rent**: an SCT standing order pays the rent each month — the one-business-day timing is fine.
- **B2B**: most payments, especially on large amounts where instant speed adds nothing and an anti-fraud control window is useful.
- **Implementation**: exposing an SCT goes through the PSD2 APIs (`POST /payment-requests` in STET); a stable spec, supported by 100% of banks.
- **UX limit**: the one-business-day timing slows e-commerce and P2P — exactly the reason SCT Inst exists, made mandatory in 2025.

## Sources

- [EPC List of SEPA Scheme Countries](https://www.europeanpaymentscouncil.eu/document-library/other/epc-list-sepa-scheme-countries) — European Payments Council
- [SEPA Credit Transfer Scheme — EPC](https://www.europeanpaymentscouncil.eu/what-we-do/sepa-credit-transfer) — European Payments Council

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Source: https://openfinanceguide.com/en/glossary/sct