If you’re a regulated financial institution looking to process euro payments, you already know that you need to connect to SEPA. And with the Instant Payment Regulation’s (IPR) mandate for SEPA Instant, you need to deliver the robust, reliable real-time payment experiences customers expect.

However, the real challenge lies in how. A direct connection to SEPA payment rails can take over a year, often requiring high collateral and significant internal resources for ongoing compliance. This can create bottlenecks when you launch and scale across Europe.

That’s why many fintechs prefer to connect to SEPA indirectly, via a sponsor bank. An indirect connection enables you to launch offerings in months, with less upfront capital and less time required from your team.

But indirect SEPA access can be complex in other ways. For one, there are different models available. And two, not every sponsor bank can deliver the straight-through processing capabilities of a real-time SEPA API (Application Programming Interface) that connects directly into your systems.  

This article explains the different ways to access the SEPA payment scheme and the considerations to keep in mind when selecting the right SEPA API provider.

We’ll cover:

• SEPA payment schemes: An overview of SEPA Credit, SEPA Instant, and SEPA Direct Debit 
• How to access SEPA: Direct participation, indirect access, and SaaS solutions  
• SEPA API: How to choose the right connectivity partner   
• Why partner with ClearBank for SEPA API connectivity 

ClearBank is an API-first bank that enables regulated financial institutions to indirectly access the SEPA payment scheme, as well as T2 and the main payment rails in the UK. To learn more about how we can help you send transfers in the eurozone, reach out to us. 

You can connect to multiple SEPA schemes to cover different use cases, from standard transfers to real-time payments and recurring collections. The table below highlights the main differences.

The Instant Payments Regulation (IPR) mandates the broad availability of euro-denominated instant credit transfers and requires that funds be made available to the beneficiary within 10 seconds, 24/7/365. For payment service providers (PSPs) in euro area Member States, the obligation to receive instant payments applied from 9 January 2025, while the obligation to send instant payments applies from 9 October 2025. For PSPs in non-euro area Member States (such as Poland) the corresponding deadlines are 9 January 2027 for receiving instant payments and 9 July 2027 for sending instant payments.

In doing so, it removes two of the most significant historical barriers to adoption: friction and cost. And, as a result, SEPA Instant is expected to become Europe’s second most used non-cash payment method, only behind cards, according to a 2026 study commissioned by ClearBank and produced by Celent.

Therefore, meeting the various SEPA Instant deadlines is no longer just a competitive advantage but a regulatory requirement. Regulated financial institutions must upgrade their infrastructure to handle real-time settlements before the relevant compliance windows close. 

Read more: What is SEPA? Everything your business should know 

Accessing SEPA comes down to your goals for cost, control, complexity, and speed to market:

To connect to SEPA directly, you would need to become a SEPA scheme member. This means you’d have full control over your payment infrastructure, including payment processing, exception handling, settlement, and liquidity management. 

While direct participation was historically limited to banks, recent changes to the Settlement Finality Directive have enabled EMIs and payment institutions to access SEPA clearing systems. 

However, direct participants also must: 

• Undergo a stringent certification process that may take 12-18 months and includes technical testing, message format validation (ISO 20022), connectivity testing with clearing systems, and scheme compliance 
• Meet high collateral and liquidity requirements (collateral deposits for direct payment scheme participation often exceed €1 million, which ties up money that could otherwise be spent on growth) 
• Hold and manage central bank settlement accounts 
• Manage ongoing scheme compliance and operational responsibilities, such as attending committee meetings and managing annual regulatory attestations (which take months of employee time) 
• Maintain connectivity to payment messaging networks such as SWIFT  

This is why institutions that choose direct participation typically are: 

• Large commercial banks operating across multiple European markets 
• Tier-1 banks processing high daily SEPA payment volumes  
• Financial institutions with large, well-resourced, and extremely experienced in-house payments infrastructure teams 

Due to stringent requirements and lengthy timelines, many fintech platforms and smaller financial institutions seek alternative SEPA connectivity options. 

Indirect participation enables financial institutions to access SEPA through a sponsor bank that’s already a scheme participant. Instead of building your own infrastructure, you connect to your sponsor bank’s payment systems and leverage its scheme membership.  

As a result, you get to benefit from:   

• Faster onboarding: You can start sending SEPA payments within 1-6 months with most sponsor banks. 
• Lower operational costs: Collateral requirements sit with direct participants, freeing more capital for the development of other key aspects of your business. 
• Focusing on your value proposition: Your sponsor bank handles scheme connectivity and regulatory requirements, so your team can focus on product development and customer experience. 
• Simpler SEPA payment infrastructure: The sponsor bank is responsible for upgrades and maintenance, reducing your engineering effort. 

Indirect SEPA access via sponsor banks is widely used by: 

• Electronic Money Institutions (EMIs)  
• Payment Institutions (PIs)  
• Challenger banks 
• Fintech platforms 

Indirect access is most commonly provided by agency banks with direct scheme participation, such as ClearBank. Some firms also connect through EMIs or payment institutions, which themselves have traditionally relied on sponsor banks for settlement and scheme access. 

Read more:  Understanding agency banking: what it is and how it works 

When you connect to SEPA via a sponsor bank like ClearBank, you can usually do so through different models:  

1. Use the sponsor bank’s BIC and infrastructure. In this model, your institution routes SEPA transactions through the sponsor bank’s Bank Identifier Code (BIC). Use of the sponsor bank’s BIC results in faster onboarding and simpler implementation.  

Early-stage fintech platforms or payment providers often choose this option. For example, a new EMI launching a payment app can use its sponsor’s BIC while building its initial payment infrastructure. 

2. Use your own BIC while leveraging the sponsor bank’s infrastructure. If you go down this route, your institution will obtain its own BIC but will still rely on the sponsor bank’s infrastructure for scheme connectivity and settlement. However, you’ll have greater control within the payment ecosystem and direct reachability by other financial institutions.  

For example, a growing digital bank could adopt its own BIC, while continuing to rely on a sponsor bank to handle scheme connectivity and correspondent regulatory requirements. 

A third, less common model involves accessing SEPA through payment infrastructure providers or SaaS (Software-as-a-Service) platforms. These providers offer connectivity layers or payment engines that handle payment messaging, routing, and interactions with payment schemes. 

SaaS platforms still require sponsor banks to provide settlement access to the SEPA scheme. That’s why these platforms often complement (rather than replace) agency banking providers.  

SaaS platform models are used by institutions that: 

• Want to avoid operating their own payment engine 
• Need connectivity to multiple payment rails 
• Prefer a software-driven infrastructure layer

SEPA itself does not provide a “SEPA API.” Instead, SEPA operates through bank-to-bank payment infrastructure and standardised financial messaging standards such as ISO 20022, used to transmit payment instructions between institutions. 

A SEPA API refers to the integration provided by a SEPA connectivity provider that allows you to initiate, track, and reconcile SEPA payments directly from your own systems. In the background, the provider handles payment messaging, routing, and scheme interactions as a direct SEPA participant. 

But not all SEPA connectivity providers are API-based. Some rely on legacy banking infrastructure, which results in slower onboarding and transaction speeds due to batch-based processing cycles and manual processes.  

And providers that do offer a SEPA API differ in terms of capabilities, resilience, and long-term scalability. This can impact how quickly you launch and how your payments perform at scale. 

To choose the right SEPA API partner, it’s therefore important to keep some considerations in mind: 

• Speed to market and onboarding: Legacy providers often require longer to complete onboarding and integration. API-first providers can reduce that timeframe by replacing complex, file-based integrations with standardised API connectivity. 
• Infrastructure resilience and scalability: Look for active-active architecture and dynamic failover, where multiple live systems automatically reroute payments if one component fails. This ensures payments continue to process during system failures, without performance degradation, even as transaction volumes increase.  
• Scheme and geographic coverage: Providers connected to multiple payment rails across regions (e.g., SEPA in the EU, Faster Payments in the UK) enable you to expand without adding new partners. 
• Regulatory resilience: Partnering with a fully licensed bank reduces dependency on additional intermediaries. In contrast, EMIs often rely on sponsor banks for settlement, which can introduce additional layers of dependency in your payment infrastructure.

ClearBank is an EU and UK-authorised B2B bank built specifically to support financial institutions. We provide real-time payments, account infrastructure, and scheme connectivity through our agency banking proposition. 

As a cloud-native, API-first bank with over £17.5 billion in client deposits, we’ve helped 250+ clients deliver near-instant payment experiences across the UK and the eurozone. 

All euro client funds are held with the DNB and the ECB, providing a highly secure holding arrangement and supporting continuous access to payment services 24x7. 

Here are a few reasons why businesses choose ClearBank for scheme connectivity:

ClearBank provides indirect access to SEPA payment schemes, so you can launch euro payment capabilities without the complexities of becoming a direct participant.  

A connection to our SEPA API enables you to: 

• Launch faster: Go live with SEPA connectivity in 1-3 months, compared to 12-18 months for direct participation in the SEPA scheme. 
• Reduce operational overhead: ClearBank manages scheme connectivity, compliance, and ongoing participation requirements. 
• Expand with a single provider: Connect to multiple payment schemes across the UK and Europe, enabling you to scale into new markets and use cases without bolting on additional providers. 
• Offer flexible account infrastructure: Issue IBANs and create high-volume virtual accounts in real time, so you can support customer segregation, reconciliation, and scalable account structures. 

Infrastructure reliability directly impacts your customer experience: delayed or failed payments can disrupt payouts and account funding, for instance. 

That’s why our active-active infrastructure uses multiple live systems that automatically reroute requests in real time. This means payments continue processing even if part of the infrastructure experiences an outage, reducing the risk of transactions being delayed or blocked. 

Through our API, payments can be initiated directly from your own systems, enabling near-instant payment flows and automated processing. 

As a bank built to be real-time by default, we offer: 

• SEPA Instant settlement in 2-3 seconds: Enabling end-to-end payment processing in under 10 seconds. 
• 99.9% uptime: Our high-quality API delivers reliable uptime. 
• Real-time notifications: Instead of waiting for batch updates, your end-customers receive real-time payment notifications thanks to the scheme-level data we send you through webhooks directly from SEPA.  
• Developer-friendly documentation: Our integration guides are designed to speed up implementation for your developers. 
• Simulation environment: Test API integrations, payment flows, and new features in our sandbox before going live, reducing risk and speeding up product launches. 

ClearBank is purpose-built for financial institutions: we don’t offer consumer banking products.  

For you, this means: 

• No competition for your end customers 
• Infrastructure designed specifically for fintech and platform use cases 
• A partner with strategically aligned goals for the long term 

You retain full control over the customer experience, including onboarding, user journeys, branding, and communication. Meanwhile, ClearBank provides the underlying infrastructure. 

For many financial institutions, the biggest challenge with SEPA connectivity is the time required to implement it.  

Traditional banks often rely on legacy infrastructure and processes that can slow onboarding and integration timelines. API-first banking reduces that timeline through standardised integration and real-time connectivity. Indirect participation also offers a faster path compared to direct scheme participation, which involves lengthy certification, higher capital requirements, and ongoing operational complexity. 

As a bank built to be real-time by default, ClearBank provides cloud-native infrastructure designed for real-time payments and quick onboarding via API. With support for indirect participation and systems built for scale, we help you launch and grow across the eurozone and the UK.

Want to learn more about how we can help you connect to SEPA via API? Get in touch.