SEPA membership to bring sizeable benefits for North Macedonia

Background: SEPA and its expansion

The Single Euro Payments Area (SEPA) is an EU initiative designed to harmonise euro-denominated electronic payments across Europe. The initiative is politically driven by the European Commission, which oversees the legislative framework, while the European Payments Council (EPC) coordinates technical implementation. The European Central Bank plays a supporting role through policy dialogue and steering processes.

All countries in the European Economic Area, plus several additional European countries, are SEPA members. SEPA membership is also identified as a priority in the EU’s Growth Plan for the Western Balkans. The “Payments Modernisation Project” by the World Bank supports candidate countries in their efforts, focusing on legal harmonisation and ensuring that domestic payment service providers (PSPs) are technically ready to join SEPA schemes.

SEPA membership: operational from October 2025

The National Bank has played a central role in coordinating regulatory and technical preparations. North Macedonia formally applied for SEPA membership in July 2024. Following a thorough review, the EPC approved the application on 6 March 2025, admitting the country to SEPA’s geographical scope. PSPs can now individually join the specific SEPA schemes, with the earliest operational readiness date set for 5 October 2025. Many PSPs are subsidiaries of European banking groups, meaning they are likely to meet SEPA’s technical standards early on. North Macedonia is the third country in the Western Balkans to join SEPA after Albania and Montenegro, which joined in November 2024.

Foreign trade payments: high savings potential

The German Economic Team has conducted an analysis to assess the potential savings associated with North Macedonia’s SEPA membership. While in principle all items of the balance of payments are affected to some degree, we focus on the two parts that are most important: 1) trade in goods and services and 2) remittances. The analysis considers the long term, assuming that all PSPs in North Macedonia have joined SEPA schemes and that all WB6 countries are members.

In 2024, the total value of foreign trade payments with current and prospective SEPA countries amounted to EUR 15.6 bn. The calculations on the transaction costs are based on a World Bank study on cross-border business-to-business (B2B) payment costs in the WB6 countries, which presents the costs of sending 5,000 EUR and 20,000 EUR (typical amounts for SMEs) from the EU to the WB6 countries and vice versa. Based on this, we expect the average costs of these transactions to fall from 0.41% to 0.04% following SEPA integration, a reduction of 0.37 percentage points.

This implies potential annual savings of approximately EUR 58.0 m. This is an upper estimate, as 1) the total value of trade is used (thus not capturing the effect of integrated value chains), 2) current costs in the World Bank study are based on SME costs (with larger firms facing lower average costs) and the “OUR” option (most expensive), and 3) a reduction to the EU cost level is assumed.

These savings benefit businesses and citizens in North Macedonia but also their trading partners abroad. The distribution of savings shows that exporters and importers save roughly similar amounts, while savings from trade with current SEPA members are much larger than with WB6 countries.

Remittances: small savings, large significance

Remittances are another important aspect where SEPA membership yields tangible savings – albeit to a lesser extent than foreign trade. In 2024, North Macedonia received EUR 423 m in personal remittances through formal channels. Based on UN migration data, we estimate that approximately EUR 316 m (75%) of these originated from SEPA countries, particularly Germany, Switzerland, Austria, and Italy.

The average costs of sending remittances are based on the World Bank’s Remittance Prices Worldwide database. Based on this, we expect costs to decrease from 3.05% to 1.85% following SEPA membership – a reduction of 1.20 percentage points. This corresponds to annual savings of EUR 3.8 m.

Although the savings from remittances are lower in absolute terms than for trade, they carry strong social significance. By reducing the cost of sending money home, the financial burden on the diaspora is reduced.

Additional benefits and broader implications

In total, SEPA membership can therefore lead to savings of up to EUR 61.8 m. Beyond direct monetary savings, SEPA membership offers further long-term advantages. In terms of relations with the EU, SEPA membership is in line with the EU Growth Plan and can improve North Macedonia’s access to financial support. Fulfilling SEPA requirements also demonstrates progress in harmonisation with EU standards and strengthens institutional credibility. Domestically, increased competition could reduce bank transfer costs and thus lead to greater acceptance of cashless means of payment. This would increase the use of formal financial channels, which in turn would strengthen transparency and financial intermediation. Many of these benefits cannot be easily quantified ex ante, but are of great importance for the modernisation of the economy and integration into the European financial infrastructure.

North Macedonia’s successful SEPA accession is therefore an important step on its European path. The next task will be ensuring broad PSP participation in SEPA schemes and promoting awareness among users. If implemented effectively, SEPA could act as a catalyst for financial sector development, transparency, and inclusive growth in North Macedonia.

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This newsletter is based on the Policy Briefing “North Macedonia’s SEPA membership – Estimation of economic benefits”.