SEPA in Andorra: what it is, why it exists and how it works within the Andorran financial system

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🏁 A decisive step for Andorra’s banking system

Andorra’s integration into SEPA reshaped the way euro payments work in the country. Before 2019, sending money to Europe meant higher fees, slower processes and limited compatibility.

Since joining SEPA, transfers between Andorra and Europe function like domestic payments.

This article explains clearly what SEPA is, why it exists and what it means for individuals and companies operating from Andorra.

💶 What is SEPA and what is it for?

SEPA (Single Euro Payments Area) is the European single area for euro-denominated payments.

Its purpose is straightforward: payments in euros between member countries should work exactly like domestic payments.

SEPA ensures:

• a harmonised payment environment across Europe;
• faster and safer transfers;
• common technical standards;
• fewer costs and fewer operational barriers.

Main SEPA instruments:

• credit transfers (SCT),
• direct debits (SDD Core and SDD B2B),
• electronic payments based on IBAN and ISO 20022.

🧭 Why does SEPA exist? Key objectives

SEPA was created to solve the fragmentation that existed between European payment systems.
Its objectives include:

• Unifying the euro payment infrastructure,
• Simplifying cross-border processes,
• Reducing costs,
• Boosting business competitiveness.

🌍 Which countries belong to SEPA?

More than 40 countries:

• all EU member states,
• Iceland, Liechtenstein and Norway,
• the United Kingdom, Switzerland, Monaco, San Marino and the Vatican,
• Andorra.

Together, these form a market of over 450 million consumers.

🏦 Why does SEPA apply to Andorra?

Because Andorra is linked to the European Union through the Monetary Agreement between Andorra and the EU.
Under this agreement, Andorra must:

• adopt EU legislation on payment services;
• ensure full technical compatibility with European systems;
• use the IBAN standard;
• implement SEPA requirements.

This required significant legal and technological adjustments.

⚖️ Legal framework applicable in Andorra

The Andorran SEPA framework consists of:

1) European legislation incorporated into Andorran law

• Directive 2007/64/EC – payment services (PSD1).
• Regulation (EC) 924/2009 – cross-border payments.
• Regulation (EU) 260/2012 – SEPA technical requirements.

2) Andorran legislation implementing SEPA

• Law 8/2018 of 17 May, on payment services and electronic money.
• Law 27/2018, which adds SEPA provisions to Law 8/2018.
• SEPA Implementation Regulation (20/06/2018).
• Decree and Edict of 24/04/2019, formalising Andorra’s inclusion.

📌 Andorra has been a SEPA country since 1 March 2019.
📌 Banks have operated under SEPA since 5 March 2019.

🗓️ When did SEPA enter into force in Andorra?

• 1 March 2019 – official inclusion.
• 5 March 2019 – operational authorisation for banks.

Adaptation deadlines:

• SCT transfers: until March 2020.
• SDD direct debits: until March 2021.

🔧 How does SEPA work in practice?

Three essential components:

1) IBAN as the universal account identifier

Andorran IBANs begin with AD.

2) A single technical format (ISO 20022)

The shared standard that enables automation and faster processing.

3) Two main SEPA instruments

• SCT (SEPA Credit Transfer)
• SDD (SEPA Direct Debit)

Thanks to SEPA, Andorran IBANs can be used today for subscriptions, SaaS platforms, European suppliers and digital services that previously rejected them.

🏢 What has SEPA meant for Andorra’s financial sector?

• Full integration with the European financial infrastructure.
• Significant technological upgrades across the banking sector.
• Increased competitiveness for digital and international businesses.
• Faster, more reliable and often cheaper payments.
• Greater appeal for companies operating cross-border.

➤ If you want more information about the Andorran banking sector, we recommend reading the article Andorra’s banking system: local banks, financial regulation and international presence.

🧾 What can Andorran residents and businesses do today thanks to SEPA?

• Send money within Europe as if it were a domestic transfer.
• Receive European payments without barriers.
• Set up international direct debits.
• Pay European suppliers and digital services.
• Use European B2B direct debit systems.
• Operate within a unified and stable legal environment.

⚡ What about SEPA Instant? Is Andorra part of it?

Not yet.
SEPA Instant enables payments in under 10 seconds, 24/7.
Andorra is not currently connected, though the existing infrastructure makes future integration feasible.

🧩 Why is SEPA important for the country?

• It connects Andorra with the European market.
• Strengthens financial credibility and transparency.
• Supports digital and international business activity.
• Reduces operational friction and costs.
• Modernises the banking infrastructure.

Conclusion: an integration that modernises Andorra’s financial landscape

SEPA is one of the most transformative reforms since the end of banking secrecy.
It simplifies payments, reduces friction and enhances international operability.
If you would like personalised guidance on how SEPA may affect your situation or business, you can request a tailored meeting below or contact us through the form.

Last updated: November 2025.