Albania's central bank said on Thursday it has submitted the country’s application to join the Single Euro Payments Area (SEPA) to the European Payments Council.

“SEPA payment schemes provide European citizens and businesses with cross-border payments in the common currency, at the same cost and with the same convenience as payments within their own country,” the Bank of Albania said in a press release.

SEPA Payment Schemes provide European citizens and businesses with cross-border payments in the common currency, at the same cost and convenience as domestic payments. The SEPA geographical scope extends beyond EU countries, encompassing 36 countries that have harmonized standards for euro electronic payments.

The Bank of Albania has been working towards membership in the Single Euro Payments Area, also known as SEPA, since 2021, when we became part of the regional project “Modernization of Payment Systems in the Western Balkans”. This project originates from the Berlin Process agreements and aims to develop financial and economic relationships among Western Balkan countries, while simultaneously integrating the region into the European Union. In November 2023, the European Commission announced a new plan for Western Balkans enlargement, with one of the priorities being the participation of regional countries in SEPA. This way the European Commission enabled the region to accelerate the economic integration into the Single European Area before EU accession.

Albania is the first country in the region to formally apply for membership in the SEPA geographical scope. The participation of Albania in SEPA will mark a significant step in the country's journey towards European integration, in turn providing facilities for Albanian enterprises and consumers in terms of costs, time, and simplicity with which they will carry out cross-border transactions within the European market. The EU is Albania's major trading partner, with around two-thirds of trade conducted with these countries, making financial facilitation crucial for expanding trade exchanges.

Moreover, SEPA participation provides Albanian businesses access to a market of 350 million inhabitants, offering opportunities for expanding their activities, enhancing competition, and benefiting from innovations. Membership in SEPA will significantly contribute to strategic sectors such as tourism and increase flows related to foreign direct investments. The reduction of transaction costs in the euro is expected to affect the formalization of remittance flows. It is expected that Albania's economy will benefit significantly from SEPA membership projecting hundreds of millions of euros in the medium term. From a financial stability perspective, SEPA membership offers a way to adopt more modern, secure, and efficient electronic payment systems. By presenting such alternatives to our citizens, we aim to increase the use of electronic payments, reduce cash usage, and enhance financial inclusion.

The Bank of Albania led the application process and submitted it to the European Payments Council on behalf of the Albanian financial community. The application document is a collaborative effort involving several other public authorities such as the Ministry of Finance, the Financial Intelligence Unit, the Ministry for Europe and Foreign Affairs, the Commissioner for Information Rights and Personal Data Protection, the Competition Authority, the Ministry of Justice, and other state institutions. It is worth noting that Albanian legislation, based on decades-long work towards European integration, complies satisfactorily with the criteria for Albania's membership in the SEPA geographical zone.

The SEPA application process has received continuous technical support and assistance from the World Bank, a long-term and important partner of the Bank of Albania in the field of payment systems. BoA and Albanian authorities are confident that this is the first step, but not the last, towards integrating our financial market with the European one.

In April, the Bank of Albania said it approved a new regulation for credit transfers and direct debit in euro, aligning with standards set forth by the SEPA.