In May, Serbia became a full member of the Single Euro Payments Area (SEPA), marking a major step towards deeper economic integration with the European Union. This milestone fulfills last December’s promise by the National Bank of Serbia (NBS) governor that citizens and businesses would gain new opportunities in cross-border payments—specifically faster, cheaper, and more transparent transactions.
According to Ivan Nikolić, director of research at the Economic Institute in Belgrade, Serbian banks migrating to SEPA will reduce long-term operating costs, gain market dominance in euro transactions, and offer European-standard digital services. While banks may see short-term commission income decline, increased efficiency and market share will compensate over time.
Benefits for citizens and businesses
SEPA membership enables individuals to make quicker, simpler, and less costly non-cash payments within the 41 current member states. Companies will benefit from reduced costs and enhanced transparency in cross-border transactions, which will accelerate Serbia’s economic growth and financial convergence with the EU.
Empirical studies show cross-border transaction costs can drop from 1–2% of the transaction value to below 0.1%, with transaction times shrinking from several days to one working day or instant payments via SEPA Instant.
Regional economic integration
While Serbia and Montenegro currently hold full SEPA membership in the Western Balkans, other countries such as Albania and North Macedonia are still in technical evaluation or the application phase, with expected full memberships by 2026-2028. The NBS is actively working to improve payment infrastructure cooperation within the region to facilitate seamless and faster transactions.
Implementation challenges
SEPA integration requires banks to adopt common rules, standards (including IBAN and ISO20022), and payment schemes. Banks must transition despite currently earning higher euro transaction commissions because SEPA will ultimately lower costs, regulatory bodies strongly enforce migration, and customers demand faster, cheaper services.
Serbia is already prepared technologically, having introduced instant payment regulations in 2018 compatible with SEPA’s systems.
Strategic importance for banks
Standardization will reduce internal processing costs, and while individual transaction margins may shrink, higher volume will offset losses. Joining SEPA grants banks access to over 500 million customers, positioning Serbian banks as key partners for European companies.
Thus, SEPA membership is not a cost but a strategic investment for the Serbian banking sector and the economy at large, heralding a new era of financial integration and efficiency.
