PRESS RELEASE
Albania, One Step Closer to Membership in SEPA

On 14 October 2024, the Governor of the Bank of Albania, Mr Gent Sejko, held meetings with Mr Giorgio Andreoli, Director General of the European Payments Council, and Mr. Gert Jan Koopman, Director General of the Directorate for European Neighbourhood and Enlargement Negotiations (DG NEAR) at the European Commission in Brussels, regarding Albania's application for membership in the Single Euro Payments Area, known as SEPA.

Albania's membership in the SEPA geographical area is a national priority, as it marks an important historical moment in the country's journey toward European integration. Inclusion in SEPA will impact the financial and economic development of the country, contributing to its further integration with the EU market. Thus, our country will gain access to a broader European market, facilitating cross-border transactions and increasing trade and investments.

On 12 June 2024, Governor Sejko signed the application of the Republic of Albania for membership in the geographical area of SEPA schemes, thus becoming the first country in the region to submit a formal application for acceptance into this area.  Currently, this application is being reviewed by the European Payments Council, which manages the SEPA schemes, as well as by the European Commission.  The latter must provide its agreement in the context of integrating non-member countries into the European market, based on the same rules and standards. 

After submitting the application, the Bank of Albania has continued its work to complete the regulatory framework and create the technical conditions necessary for the process, committing to align legal and regulatory innovations of the EU related to SEPA.

During meetings held in Brussels, it was emphasized that all countries in the region have made maximum efforts to join SEPA, and three of them, including Albania, have successfully completed the application phase. Albania is one of three countries in the Western Balkans that has made significant progress toward joining SEPA, and it is anticipated that it will officially join in the coming months.

"Membership in SEPA is one of the pillars of the Growth Plan developed by the EU Commission for the Western Balkan countries, as well as a long-term objective for the Bank of Albania and our country." -said Governor Sejko. Therefore, Albania is committed to meeting the high standards set by SEPA regarding the efficiency and security of payments. The Albanian economy is highly interconnected with the European Union, and this membership helps significantly reduce payment costs with the EU and its associated areas through SEPA.

It is worth mentioning that Albania is the first country in the region to align its legislation and draft the relevant regulation as cornerstones of SEPA’s requirements.

In the area of payments, Albania demonstrates a high level of legal compliance with the acquis and the regulatory framework of SEPA . Since 2018 our country has accelerated its efforts in this direction, as the Bank of Albania has drafted and approved the Law “On Payment Services” and the regulatory framework for the implementation thereof. This law aligns with the EU Payment Services Directive, known as PSD2. It ensures competition, transparency, and consumer protection during the provision of payment services, following the standards of the European Union.

Additionally, the Bank of Albania has approved Regulation 43/2024 "On Information Accompanying Transfers of Funds," which further aligns with the corresponding EU regulation.

Beyond the political importance of the country's integration in the European Union, the participation in SEPA provides a series of benefits for Albanian consumers, businesses and the economy.  Firstly, it provides cross-border payments in Euro, with the same costs as domestic payments, and after joining, the cost of cross-border payments in Euro with member countries will be at least five times lower.

The economic benefits of conducting payments more efficiently in terms of costs, time, and security are substantial. According to our preliminary estimates, they could reach up to 20 million euro in the first year, progressively increasing. More concretely, based on the experience of the AIPS Euro system—through which the Bank of Albania has saved the Albanian market EUR 95 million since its launching in January 2022, the impact from gaining SEPA membership will be even broader.

Secondly, facilitating cross-border payments with Albania’s main trading partner, the EU, encourages further expansion of trade relations with it.

Thirdly, almost all remittances from emigrants come from EU countries and the United Kingdom, which is also a member of SEPA. The benefits provided by SEPA will encourage the senders of remittances to use official channels, in addition to increasing the value of savings.

Fourthly, membership in SEPA promotes the establishment of an efficient and reliable payment system for small countries like Albania.

Finally, the use of payments through SEPA is expected to bring positive changes in the behaviour of Albanian companies and households regarding electronic payment methods (cashless). It serves as an educational instrument and supports the expansion of financial inclusion for the population.