Bank of Albania starts operating AIPS EURO for the settlement of the domestic euro-denominated transfers

Publication date: 24.01.2022


Today, on 24 January 2022, the AIPS Euro started to operate. This system processes the domestic euro-denominated payments. This multi-year project of the Bank of Albania, in a close collaboration with the banking system, is an important achievement for the implementation of the Albanian National Retail Payments Strategy.

The finalisation of AIPS Euro operationalization interconnects the development of a broad gamma of both infrastructural and regulatory measures.  The achievement of this project bolsters the creation of a contemporary and comprehensive retail payments market, supported by safe and efficient infrastructures, as well as by a wide range of payments instruments and services that fulfil the needs of financially capable users in the entire country.

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The benefits this project generates into the Albanian market of payments are assessed to drive to the promotion of this objective.  In contrast to the inefficient functioning so far of the market through cross-border corresponding banks, the operation of AIPS Euro enables the Albanian citizens to conduct euro-dominated payments within Albania with a quite lower cost and at a shorter time from the current process carried out by the corresponding banks. This project will positively affect the euro-denominated cash management from banks and promote e-payments in this segment of market as well. In addition, it will encourage the Albanian citizens towards using these instruments, for the efficiency and speed they provide, coupled with the considerable lower costs that banks will apply for the electronic transfers.   

The reduction of fees charged by banks to their customers will be reflected as a consequence of eliminating the prolonged cycles of payment processes through corresponding banks, and at a considerable extend, thanks to the Bank of Albania’s policies on determining the flat fees applied by banks for customers, similar to fee policies implemented for lek-denominated payments.

The decision on the adjustment of fees charged by banks aims at balancing a set of strategic objectives of the Bank of Albania, including the enhancement of euro-denominated payments formalisation, promotion of a more effective conduction of these payments, in addition to prioritising lek-denominated payments, which are cheaper based on the flat fees determined by the Bank of Albania for supporting the polices on payment de-euroisation. In view of strategic perspective, the reduction of fees and creation of the economy of scale is currently indispensable in the framework of integration process in the EU markets.  The low financial education and intermediation in Albania require longer-term efforts by turning the need for intervention more meaningful.  In this light, current measures will support the banks operating in Albania to have a sustainable activity, notwithstanding the increasing competition from the entrance into the European markets, where banks operate with rather low fees and guarantee the stability of the activity from the economy of scale. 

In an indirect way, this project is accompanied by a set of factors affecting the individual welfare of the customer, bank and the entire economy.  As the payments are processed domestically, in case of incorrectness in the payment processing, the solution will be easier compared to the processing through corresponding banks. This will be regulated, substantially, in the legal and prudential regulatory framework on the consumer's protection, established in the Law “On payment services”.  Also, this project has a broad impact on economic level, including keeping in the domestic economy the considerable fees, which were attained from the cross-border corresponding banks, and on the preservation of both monetary and financial stability, by having all the necessary monitoring mechanisms related to this segment of market.