Ukraine is actively moving towards integration into the Single Euro Payments Area (SEPA), which will be an important step towards full euro integration. The National Bank of Ukraine has confirmed progress in screening the national legislation necessary for entry into this payment system.
What is SEPA?
SEPA (Single Euro Payments Area) is a zone where the difference between domestic and international euro payments has practically disappeared. The system provides fast and accessible transactions between EU countries, as well as some other states that have joined this platform. It has been operating since 2008, primarily covering regular bank transfers, but also including instant payments for smart devices.
Joining SEPA is not just a simplification of financial operations. It opens up new opportunities for integrating Ukrainian businesses into the European market and reduces costs for international transfers.
Benefits for Ukraine
- Business support. Ukrainian companies will find it easier to enter the European market, as transactions in euros will become simpler and cheaper.
- Fintech development. Ukrainian financial technology companies will have access to the EU financial services market with fewer technical barriers.
- Reduction in transfer costs. Both businesses and citizens will see reduced expenses on money transfers between Ukraine and EU countries.
- Support for euro integration. This will be another signal to investors of Ukraine’s seriousness in adapting to European standards.
Pros and Cons of Joining SEPA for Ukraine
Pros:
- Access to European financial technologies. This will provide Ukrainian businesses with more opportunities for payments and investments.
- Cost savings on transactions. Citizens and businesses will benefit from significant reductions in fees for international transfers.
- Speed and security. Instant SEPA payments between countries ensure a high level of convenience and reliability.
Cons:
- Integration costs. Ukrainian banks and financial institutions will need to adapt their infrastructure to SEPA standards.
- Dependency on the eurozone. Integrating into SEPA will strengthen the connection of the Ukrainian economy with the euro, potentially making it more vulnerable to changes in the eurozone.
- Competition for banks. Ukrainian banks may face new challenges associated with the entry of European financial institutions into the domestic market.
Where is Ukraine in the Process?
NBU Governor Andriy Pysniy announced support for this process from the European Commission and expressed confidence in overcoming all stages of integration quickly. This initiative also has the support of European financial institutions such as the European Commission.
Joining SEPA will be a crucial step in the development of Ukraine’s financial infrastructure and its integration into the European economy. This decision will bring about many positive changes but will also require serious preparation. Ukraine has already taken a significant step towards achieving this goal, and EU support is a significant factor for the successful completion of this process.
