Joining SEPA could bring up to EUR 100 mln per year to Ukraine's businesses and population – IER
The Institute for Economic Research and Policy Consulting (IER) estimates the potential economic effect of Ukraine's joining SEPA for businesses and the population at EUR 70 million to EUR 100 million per year due to cheaper transactions in euros.
"Provided that current payment volumes are maintained, potential savings for individuals and legal entities from the transition to SEPA could range from EUR 70 million to EUR 100 million," IER notes in an analytical note for May.
It is clarified that the above estimates are approximate. They used a World Bank study for the Western Balkans, which showed that the cost of a transfer of EUR 20,000 between the EU and these countries was 0.3% on average in 2023, compared to 0.02% for the same payment within the EU.
IER added that an analysis of the rates of four Ukrainian banks with the largest balances of legal entities' deposits in foreign currency shows that the cost of a payment of EUR 20,000 is lower than EUR 60 (0.3%), but much higher than EUR 4 (0.02%), which are typical for transfers within the EU. Only the minimum commissions of Ukrainian banks for a payment outside of promotional offers are $20-30.
Monitoring of rates for transfers from Poland, Germany, the Czech Republic and Italy to Ukraine, conducted by the World Bank, shows that as of November 2024, the cost of a transfer in the national currency of the sending country (EUR 140, PLN 860, CZK 3,800) ranged from 1% to 10% and higher. At the same time, the most expensive transfers reflected high fixed commissions of a number of banks, which made it unprofitable to transfer such amounts via bank transfers. However, in each country there were transfer options with a total cost of up to 2%. At the same time, the cost of a transfer with a larger amount (EUR 345, PLN 2,150 and CZK 9,550) was lower in percentage terms, and the most profitable transfer options were close to 1% of the amount.
Experts also recall the NBU data, according to which in Ukraine's foreign trade, payments in euros with EU countries amounted to up to EUR 46 billion (over EUR 16 billion in exports of goods and services and over EUR 29 billion in imports) in 2024. Ukraine also received over EUR 1.8 billion in transfers from EU countries through banks and international payment systems in 2024.
IER compared that Moldova estimated its short-term benefit from joining SEPA at EUR 12 million. At the same time, Ukraine's foreign trade volumes exceed Moldova's corresponding indicators by more than nine times, and money transfers by six times.
According to experts, joining SEPA can provide Ukraine with access to the EU internal market in the field of financial services even before its official accession to the European Union.
It is noted that reducing transaction costs can reduce the volume of informal transfers between Ukraine and the EU and stimulate the wider use of the euro in trade. SEPA can also accelerate the movement of funds between Ukraine and the EU, improve financial liquidity and increase business efficiency, in particular for companies with active European ties.
Also, the implementation of SEPA standards will contribute to the security and transparency of payments, reducing the risks of fraud.
