Montenegro’s SEPA membership: Key benefits and boost to financial integration with the EU

Montenegro’s membership in the SEPA program brings numerous benefits, with the most significant being cost reduction, elimination of high fees and faster transaction processing. To illustrate, here’s a simple example:

• If someone wants to send money to a student – a few hundred euros – they no longer have to rely on alternative methods such as sending money through buses or via relatives. With SEPA, the fees will be affordable, so there will be no need to seek alternative methods, significantly reducing the informal money transfer channels, explains Andrija Jovović, Director of the Payment Systems Department at the Central Bank of Montenegro (CBCG).

Money transfer fees for cross-border payments will be drastically lower.

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For instance, the fee for transferring 200 euros, which currently stands at 20 to 30 euros, will be reduced to just a few euros. Similarly, the average cost of transferring 5,000 euros, which is now around 50 euros, can be reduced to 5 euros.

SEPA membership also offers a guarantee to potential investors.

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• By becoming part of SEPA, we demonstrate that our financial sector complies with European regulations, sending a clear message to investors that both Montenegro and Albania, in this case, have created an investment-friendly environment, said Mirza Mulešković, economic analyst.

Joining SEPA is a crucial step toward financial integration with the European Union.

• This shows that our system is prepared to comply with all European Union regulations. Ultimately, the total savings for Montenegro’s economy could reach 30 million euros annually, considering remittances for all transactions within the SEPA zone. Last year alone, these amounted to 522 million euros, Mulešković added.

As explained by Andrija Jovović, in addition to cost reductions, transaction processing times will be significantly shortened. Payments will be processed on the same day, and funds will arrive much faster than they do now, and over time, some banks may offer instant transfers.

Montenegrin banks will be able to formally apply for access to SEPA payment schemes starting in April next year. Following that, the European Payments Council will set an operational day when citizens and businesses in Montenegro can start making SEPA transactions with any of the 37 SEPA member countries.