Thewesternbalkans
According to some publications, including at the European Western Balkans, on 21 of November last year, it has been announced that Montenegro and Albania became the first-ever enlargement countries to join the geographical scope of the Single Euro Payments Area (SEPA) following the green light by the European Payments Council (EPC).
According to the statement of the EPC, adherence of Montenegrin and Albanian financial institutions to the SEPA payment schemes, will be enabled starting from April 2025.
In its own statement released on this occasion, the European Commission stressed that this is a practical example of the impact of the Growth Plan, an EU initiative to accelerate the socio-economic integration of the Western Balkans into the EU.
According to the European Commission: “This step paves the way for the facilitation of financial transfers in euros and the reduction of the cost of these transactions between the two countries and other SEPA members. The Commission will continue to support the preparation of Montenegro and Albania’s payments service providers, as well as the other Western Balkan countries aiming to join SEPA in the near future”, the statement reads.
In a post on X, Gert Jan Koopman director general at the European Commission said that private banks can now make the needed preparations for citizens to feel the benefits starting in 2025.
However, North Macedonia and Serbia also hope to become SEPA members as soon as possible. The central banks of these two countries explain that they submitted the applications for SEPA accession and all measures are being implemented in order to achieve this goal.
According to the European Western Balkans, member of the Council of the Central Bank of Montenegro Milorad Jovović sad that: “Montenegro’s membership in the SEPA system will bring numerous benefits for Montenegrin citizens and the economy, including lower transaction costs, Faster Payment execution and simplified cross-border transactions within the European market”. “Montenegrin companies will have better access to the European market, which will enable them to expand their business, increase competitiveness and innovation. SEPA membership will have a positive impact on sectors such as tourism and trade, as well as attracting foreign investment,” Jovović explains.
The National Bank of North Macedonia also confirms that “in the capacity of a regulatory and supervisory institution for the payment service providers in the country” it submitted a formal request for the country’s accession to SEPA in July 2024.
In a similar vein, the National Bank of Serbia explains that the “Draft application for the accession of the Republic of Serbia to the SEPA area has been sent for a preliminary opinion to the European Commission and the European Payment Council”.
They stress that “in the previous period, the National Bank of Serbia undertook a whole series of activities and measures aimed at the development and improvement of payment transactions in the country and abroad”.
“The process of improving the payment services market in the Republic of Serbia began in 2014, with the adoption of a modern legal framework for the provision of payment services – the law on payment services, and its amendments in 2018, as well as amendments from July this year, we achieved full compliance with the regulations of the European Union in the field of payment services”, the NBS says.
According to NBS, the Republic of Serbia has also harmonized its regulations in the field of banking, as well as prevention of money laundering and terrorist financing with relevant EU directives, regulations and international standards and recommendations.
The National Bank of Serbia adds that “all this has contributed to fact that the Draft application for the accession of the Republic of Serbia to the SEPA area, which we sent to the preliminary opinion to the European Commission and the European Payment Council, was assessed as the most detailed and complete by our colleagues from the World Bank who had an insight into the drafts of applications sent so far by the economies of the Western Balkans”.
The Central Bank of Bosnia and Herzegovina says for the European Western Balkans that the current state of legislation in that country does not meet the requirements necessary to access SEPA, and, therefore, the application for the membership has not been submitted yet.
“As we all know, the European Payments Council has established clear and transparent criteria for accession to SEPA, and the conditions for accession are met accordingly. The current state of legislation in Bosnia and Herzegovina does not meet the requirements of SEPA, it is an active process that involves the transposition of the necessary legislation”, the Central Bank of BiH clarifies.
According to them, the Central Bank of Bosnia and Herzegovina coordinates the SEPA connection mechanism and, together with the relevant institutions in BiH, with the support of long-time partners USAID and the World Bank, is actively working on preparatory activities, including the legislative and infrastructure ones.
“The exact date of Bosnia and Herzegovina’s application should be fixed in the following period,” the Central Bank of BiH adds.
Comments: The Single Euro Payments Area (SEPA) is a pan-European initiative, launched in 2008, to simplify, accelerate and harmonise electronic payments, while reducing costs as much as possible. The initiative was primarily designed for the European Union market, but SEPA area now has a total of 36 countries, including all EU member states.
The backbone of SEPA is a set of rules and standards for making cashless payments. In order for a country to join SEPA, it must comply legally and technically with the regulations of the European Union in the domain of payment systems, and a very important role in such a process is played by national banks, which, on behalf of the countries, submit applications for accession of SEPA States.
Joining the SEPA area and technically connecting the payment systems of the Western Balkan economies with the payment infrastructure of the European Union will contribute to reducing these costs.
Decisions on the membership of SEPA schemes are taken by the Board of the European Payments Council (EPC), which is an international not-for-profit organization.
It is worth adding that at the moment Montenegro continues to be at the top of the wave, but Albania’s adherence should be taken into account at least on some issues such as membership in SEPA.
