International payments: SWIFT, SEPA, and local payments explained

Local payments - within the same country

Local payments are payments within the same country, typically in the country's own currency. In Denmark, this takes place via the Danish payment system and includes standard transfers between Danish bank accounts.

Used for:

• Payments to Danish suppliers, customers, and employees
• Tax, VAT, and other public payments
• Rent, subscriptions, and similar operating expenses

Characteristics:

• Fast - typically same or next business day
• Low cost
• Conducted in DKK

At kompasbank, a local DKK payment costs DKK 1 per transaction.

SEPA - euro payments within Europe

SEPA stands for Single Euro Payments Area and is a pan-European payment network for payments in euro. It covers 36 countries - all of the EU plus a number of other European countries such as Norway, Switzerland, and the United Kingdom.

SEPA comes in two variants:

• SEPA Credit Transfer - standard SEPA payment, typically arriving within one business day
• SEPA Instant - the payment arrives in the recipient's account within seconds, around the clock, year-round

Used for:

• Payments to suppliers and partners in the EU and the rest of the SEPA area
• Salary payments to employees in other EU countries
• Receiving payments from European customers

Characteristics:

• Must be in euro
• Fixed, low costs regardless of the amount
• Fast - seconds for SEPA Instant, up to one business day for standard SEPA
• Standardised format across countries

At kompasbank, a SEPA payment - including SEPA Instant - costs EUR 0.20 per transaction.

SWIFT - international payments outside SEPA

SWIFT is the global payment network used for international payments outside the SEPA area or in currencies other than euro. SWIFT is not in itself a payment system but a messaging network that connects banks around the world.

SWIFT is used when:

• The recipient is outside the SEPA area (e.g., USA, China, India, the UK, Australia)
• The payment is to be sent in a currency other than euro (e.g., USD, GBP, CHF, JPY)
• A SEPA payment is not technically possible

Characteristics:

• Covers most of the world
• Supports many currencies
• Typically takes 1-3 business days depending on currency and country
• Higher costs than SEPA and local payments
• May involve intermediary banks that can charge fees

At kompasbank, an international payment costs EUR 8-15 per transaction depending on your package.

Which payment type should I use?

In practice, the system often automatically selects the right payment type based on the recipient's country and currency. But it helps to understand the logic so you can optimise your payments:

Note: Even though Sweden and the UK are part of the SEPA area, SEPA requires the payment to be in euro. If you need to send Swedish kronor or British pounds, the payment goes via SWIFT.

Currency exchange on top of the payment

Many international payments involve a currency exchange. If you need to pay a German supplier in euro but have the money in Danish kroner, the kroner must first be exchanged to euro. The exchange rate is a separate cost on top of the payment fee itself.

At kompasbank, the currency margin depends on which package you have chosen. You can read more about the packages in the article "Starter, Growth, or Scale - how to choose the right one".

What does kompasbank support?

With a business account at kompasbank, you can send:

• Local payments in DKK in Denmark
• SEPA payments in EUR to the SEPA area, including SEPA Instant
• International payments via SWIFT to 24 currencies worldwide - see the full list in the article "Which currencies does kompasbank cover?"

You create all three types of payments from the same netbank, and the system selects the right route based on the recipient's country and currency.