The Single Euro Payments Area (SEPA) is an initiative that aims to create a harmonized and integrated European payments market. As Bosnia and Herzegovina considers joining SEPA, it is important to explore the potential benefits such a step would bring to the country, USAID's Diaspora Invest project said.
After today's meeting organized by USAID through its Project Diaspora Invest, which was attended by representatives of the Central Bank of Bosnia and Herzegovina, the Association of Banks of BiH, the Federal Ministry of Finance of the Federation of BiH, the World Bank Office in BiH and the Delegation of the European Union to BiH, there is reason for optimism.
As stated, all participants welcomed this initiative, but also said that great work lies ahead of the banking and financial sector in order for BiH to become a full member of SEPA.
"By joining SEPA, Bosnia and Herzegovina would benefit from simplified international payments, eliminating the need for multiple banking relationships and reducing transaction costs. SEPA offers standardized payment instruments, such as SEPA credit transfers and SEPA direct collection, which facilitate faster, more efficient and cheaper transactions within the SEPA area", explains the USAID project Diaspora Invest, which through activities to facilitate access to finance, want to enable new opportunities in BiH. Diaspora to invest its funds in the homeland through innovative financial instruments and mechanisms.
Integration of payment systems across the SEPA region would encourage greater trade and investment, promoting economic growth and development in Bosnia and Herzegovina.
"SEPA would simplify payment processes for the citizens of Bosnia and Herzegovina. By using SEPA credit transfers, individuals could make payments in euros across the SEPA area using a single bank account, eliminating the need for multiple currencies and payment methods. This convenience would benefit citizens, foreigners and tourists, promoting financial inclusion and tourism," said Berislav Kutle, director of the Association of Banks in BiH.
Otherwise, SEPA adheres to strict security standards that ensure the integrity and confidentiality of payments.
By adopting strong SEPA security measures, Bosnia and Herzegovina would improve its payment infrastructure and protect consumers from fraud and unauthorized activity.
This would increase confidence in the financial system, both domestically and internationally.
"Joining SEPA would require harmonization of payment systems and practices of Bosnia and Herzegovina with SEPA standards. This alignment would foster interoperability and compatibility with European partners, facilitating international trade and investment. It would also enable equality for domestic and foreign companies operating in Bosnia and Herzegovina," it was emphasized at today's meeting.
At the same time, it was assessed that Bosnia and Herzegovina's approach to SEPA would mark closer integration into the European financial system, and that this integration could lead to improved access to finance and investment opportunities, as well as increased stability of the banking sector.
"Joining the Single European Payments Area (SEPA) would bring many benefits to Bosnia and Herzegovina. From the perspective of what USAID is doing through the Diaspora Invest project, the facilitation of our diaspora's access to the transfer of funds from other countries to the homeland is particularly important. Remittances from the diaspora account for 14% of GDP, and this percentage refers only to remittances through the banking sector. With lower money transfer costs, less money will be transferred in the 'grey area', which will bring benefits for the state, banks, but also for citizens," the project concluded.
The participants of the meeting established a framework plan of activities and responsibilities of participants in the process of joining SEPA.
As Bosnia and Herzegovina considers its options, it is important to consider the potential long-term benefits that SEPA membership can offer in terms of economic growth, stability and integration into the European Union. In this context, the meeting, which discussed USAID's technical support on this path, represents one of the steps towards the full inclusion of BiH in modern financial flows.