Western Balkans in the Euro Payment Zone from January 1

The entire Western Balkans region will enter the Single Euro Payment Area (SEPA) from January 1 of next year. This step will bring significant financial benefits to businesses and citizens in the Western Balkans, allowing for savings of half a billion euros annually, said Oliver Varhely, European Commissioner for Neighborhood and Enlargement, at the Western Balkans and EU Leaders’ Summit held in Kotor, where he presented the details of the new growth plan.

What is SEPA?

SEPA is a European Union initiative, created after the introduction of the euro as a common currency, with the aim of making cross-border cashless payments for businesses and citizens of the European Union as fast and at lower costs as payments within individual EU countries.

Impact on Serbia

Serbia conducts about 60% of its foreign trade with EU countries and has a significant diaspora in those countries, meaning this step will bring numerous advantages, especially for citizens due to the reduction of remittance costs. According to a World Bank analysis, the benefits for the economy would be even greater.

Transaction Costs and Digitalization

Current costs of cashless transactions for small, micro, and medium enterprises between countries in the region are six times higher compared to costs within the EU. Increasing digitalization of payments by 10% at the regional level could reduce the grey economy by about two percentage points.

Reduction of Remittance Costs

SEPA is expected to reduce remittance costs, and it is estimated that lowering costs by around three percent would bring savings of half a billion euros at the Western Balkans region level. Currently, remittance costs amount to 6.71% of the total transaction.

By introducing the SEPA zone, the Western Balkans are getting closer to European Union standards, enabling faster and cheaper payments, which will positively impact the economy and citizens of the region.