Serbia expecting decision on joining Single Euro Payments Area in December

Serbia is preparing for entering the Single Euro Payments Area (SEPA). Cheaper foreign transactions – that’s what joining SEPA will bring to Serbia.

Montenegro received a confirmation several days ago that it would enter SEPA after the New Year, and Serbia is expecting the same news as well. Nenad Petrovic, the general manager of the Payment System Department at the National Bank of Serbia (NBS), said on RTS that the same would be done for Serbia.

– We are working intensively on having our country join the Single Euro Payments Area SEPA and we are fully ready for that connection. It’s only a matter of the date when this happens, but we expect it to happen very soon, after we get the feedback on the draft application from the European Commission and the European Payments Council – said Petrovic.

Opinion in early December

He underlines that Serbia is communicating with the European Commission and the European Payments Council and, according to the information available, we will get an opinion in early December.

– We worked on getting that opinion sooner, however, the European Commission says that they have a lack of capacities, considering that several applications were made almost simultaneously and that they are doing other things for the Union, which is why they are not able to process our application sooner – said Petrovic.

Additional procedural-type requests

He adds that there are additional requests of a procedural type from the European Commission, which means that, in addition to the draft application, the regulations adopted by the parliament and the National Bank also have to be submitted, which is why the submission process has been postponed for a while.

– Now that this has been done, when the necessary regulations have been adopted, we expect the procedure of official application and approval by the European Council to be quick – underlined Petrovic.

Lower costs

If we’re buying something from Europe and paying by card, does that mean that we will no longer pay the fee?

– In principle, it is not realistic for there to be no fees. Practically, when you pay with cards in the country, as the owner of the card, you don’t pay a fee. For payments on foreign websites for the purchase of goods and services, there may be payments of certain fees – the bank usually indicates so in the contract on the issuing of the payment card. When it comes to transactions between our citizens and the corporate sector and the EU, they will take place more quickly and conditions will be created for the fees to be considerably lower – Petrovic noted.

According to some analyses that have been carried out by the World Bank, our micro, small and medium enterprises, when it comes to those regional payments, pay nearly six times higher fees compared to their counterparts within the EU.

– Also, according to that analysis, it has been determined that, if the costs of the payments of transfer arriving to the region of the Western Balkans were lowered by 3%, savings of nearly half a billion euros could be made – specified Petrovic.

Is the corporate sector looking forward to entering SEPA?

The honorary president of the Serbian Association of Employers, Nebojsa Atanackovic, says that joining SEPA means a lot for the economy.

– When we manage to enter that single payment system – SEPA as a state, I believe that it will be a big step toward us being able to count on getting closer to the European Union – says Atanackovic.

According to him, if we are able to pay similar fees as the EU states do, it will be a serious step, considering that they will be cheaper.

World Bank’s calculation

According to the analysis of the World Bank, a transfer of EUR 5,000 between small and medium enterprises in the Western Balkans is, on average, 10 times as expensive as when the same transaction is done between the countries which are part of the SEPA system.

When asked whether this means that the economies will have lower costs when doing business with foreign companies, Atanackovic says that the costs will absolutely be lower and that the process itself will be incomparably more efficient and quicker that is the case now.

– We will get to the point where there are no big differences regarding whether we will pay the money at the level of a local bank or toward the European Union and Europe in general – he explains.

Will exports get cheaper?

Atanackovic says that exports will get cheaper.

– Very quickly, upon the acceptance of our application to become a part of that system, our banks should adapt to that way, so that they can communicate with banks in Europe in a simple way – said Atanackovic.

When asked whether the fee will be reduced if people from Serbia who live abroad want to send money to their relatives, Petrovic answers that the fee will be reduced, because that is the goal of this project – for those transfer costs to be reduced, because we thereby redirect the transfer of money from those informal channels to formal ones through accounts and banks.

– Then there’s no need to send cash to relatives in Serbia through friends or bus drivers, but through a simple transfer from the account – says Petrovic.

As he says, it will be there in only a few seconds, with considerably lower fees.

Reduction of shadow economy

– In general, the increase of cashless and digital payments has an impact on the reduction of the shadow economy. According to the analysis of the World Bank, it has been determined that an increase in digital payments by 10% can lead to a reduction in the shadow economy by around 2% – says Petrovic.

Petrovic concludes that, the more we use cashless payment instruments, the less room there is for the shadow economy.

National Bank of Serbia

SEPA

Serbian Association of Employers

European Commission

European Payments Council

World Bank

Nenad Petrović

Nebojša Atanacković

Single Euro Payments Area

money transfers

payment transactions

payment system

cashless payments

digital payment

fee

shadow economy