Montenegro submitted an application for membership in the SEPA: A step towards less costly and faster cross-border payments for citizens and the economy

01/07/2024

Today, the Central Bank of Montenegro submitted a formal request on behalf of the state to join the Single Euro Payment Area (SEPA), thus making a key step towards a further development and integration of the Montenegrin financial system into the European economic and market area.

Montenegro's membership in the SEPA will bring numerous benefits for Montenegrin citizens and the economy, including a multiple reduction of costs, shortening of time of transactions, and simplification of cross-border payments on the European market.

After signing the application for membership, the Governor of the Central Bank of Montenegro, Ms Irena Radović, pointed out that this represents a historic step for our country.

"More efficient management of cash flows, simpler international transactions, and new opportunities for trade and investments are just some of the benefits of joining the SEPA", the Governor highlighted.

The submission of the formal request, which is a result of the close cooperation and synergistic action of the Central Bank of Montenegro and other regulators with the Government and Parliament of Montenegro, was preceded by significant achievements in aligning the national legislation with the EU acquis communutaire, as well as by the passing and efficient application of laws in the field of payment system services, the pursuit of business of credit institutions, anti-money laundering, free movement of capital, and personal data protection.

"Our goal is to make Montenegro an even more appealing destination for foreign investments, with the financial system that is reliable, efficient and fully integrated into the European framework. Joining the SEPA will generate concrete benefits for citizens and the economy of Montenegro and bring us closer to the ultimate objective - a full-fledged membership in the European Union and the European System of Central Banks", said Governor Radović on this formal occasion.

The Governor highlighted that membership in the SEPA will make a strong contribution to the development of the banking sector, whose interaction with other participants in the economic system will be raised to a higher level.

"Although the implementation of the SEPA standards requires additional adjustments and improvement of our banking system, we are confident that with the dedication and joint effort of all participants, we will successfully overcome these challenges in the short term," Radović stated.

The SEPA is the initiative launched in 2008 with the support of the European Commission and the European Central Bank with the aim of standardizing payment systems within Europe, increasing payment efficiency, and reducing transaction costs between member countries. The SEPA area currently consists of 36 countries: all EU member states and Great Britain, Iceland, Liechtenstein, Norway, Switzerland, Monaco, San Marino, Andorra, and the Vatican.

By joining the SEPA, differences in speed, costs and processes between national and international payments will be eliminated. The payment system used by the SEPA members will enable citizens and companies to make payments within the SEPA area in a much shorter time and at up to six times lower costs compared to the current ones.

This membership will allow Montenegrin companies to get easier access to the European market and have the opportunity to expand their business and increase competitiveness and innovation. It will also have a positive impact on the key sectors for the country such as tourism and trade, as well as on the attraction of foreign direct investments.

The decision on the admission of Montenegro to the SEPA is made by the European Payments Council (EPC), a Brussels-based body responsible for the standardisation and improvement of the payment system in Europe. In the coming period, the EPC will actively consider Montenegro`s application and, after assessing compliance with SEPA standards, make a final decision in cooperation with the European Commission on Montenegro's admission to membership.

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