Albania's transfers in euros, today 95% cheaper! - Before SEPA, cross-border payment costs were up to 17 times higher than in the EU
Albania's SEPA membership has brought a significant transformation in the costs of cross-border transfers in euros, bringing them closer to European Union standards.
But what was the situation like before this integration?
According to a study published by the World Bank on the costs of business-to-business payments in the Western Balkans, before SEPA membership, transfers from Albania and the region to EU countries were much more expensive than within the EU itself.
On average, a transfer of 5 thousand euros cost about 0.50% of the amount, while for 20 thousand euros about 0.34%. In some specific corridors, the fee for 5 thousand euros reached up to 0.76%. In comparison, transfers within the EU moved at much lower levels, from 0.02% to 0.05%.
This meant that Albanian businesses paid up to 10 or 17 times more to make the same payment that an EU company could make at minimal cost.
The change comes after SEPA membership and operationalization.
According to data published by the Bank of Albania, transfer costs have fallen dramatically. For a transfer of 5 thousand euros, the fee has dropped from 0.76% to just 0.08%, a reduction of about 90%. While for a transfer of 20 thousand euros, the cost has dropped from 0.47% to 0.02%, over 95% less.
This means that a business that previously paid hundreds of euros for a large transfer, today pays only a very small fraction of that amount.
The economic effect is expected to be significant. It is estimated that during the first year of implementation, the Albanian economy will save around 70 million euros from the reduction in transaction costs in euros.
From a situation where cross-border transfers were many times more costly than in the EU, Albania is entering a new phase, where payments in euros are treated with the same standards as European ones, a concrete step towards economic rapprochement with the European Union and increasing the competitiveness of Albanian businesses in the international market.
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