SEPA: Europe’s unsung hero

3 November 2026

By Elisabeth Beckmann, Justus Meyer and Katharina Allinger^[1]

The Single Euro Payments Area (SEPA) offers seamless cross-border payments between 41 European countries, but its silent success creates a paradox. Thanks to SEPA, many people don’t think about the service they use when making a money transfer. Yet many haven’t heard of SEPA at all. This all comes at a cost. Especially in countries, which have recently joined SEPA, or for migrant workers sending money back home, expensive alternative providers of cross-border payments are often still the first port of call.

In this blog post, we look at six south-eastern European countries drawing on the OeNB Euro Survey to show why cross-border payments matter for households, how SEPA provides an inexpensive response to this need and how consumers can benefit from using it.

Why cross-border payments matter for households

Every year, migrant workers across the euro area send billions of euro to support family members both in the European Union and in countries aspiring to join it. Bulgaria and Albania are good examples of two different aspects of remittance flows. In the case of Bulgaria – the newest member of the euro area – remittance inflows amount to almost €3 billion, illustrating the scale of the phenomenon in absolute terms. As for Albania, while inflows exceed €2.5 billion – somewhat lower in absolute terms – they are substantially more significant relative to the size of the economy and account for around 8.4% of GDP, compared with 2.1% in the case of Bulgaria. Remittance receipt is also widespread at the consumer level, with around one in five people in Albania (21%) and one in six in Bosnia and Herzegovina (17%) reporting receipt of remittances, compared with 10% in the Republic of North Macedonia, 9% in Serbia, 8% in Bulgaria and 4% in Romania.^[2]

Even so, the formal banking system is still far from being the dominant channel for these payments.^[3] Across six countries in south-eastern Europe, around one-third of recipients receive money in cash via relatives or friends and another third through physical money transfer operators (Chart 1).^[4] Bank-based remittance transfers generally include SEPA credit transfers when both sender and recipient institutions participate in SEPA. The differences between countries are considerable.

Let’s take Bulgaria and Albania, two countries at different stages along the path to EU and euro area integration. While bank-based channels are more often used in Bulgaria, money transfer operators remain equally important. In Albania, more than half of recipients use money transfer operators. Many remittance senders also choose informal, cash-based channels.

Chart 1

Where payment integration is incomplete: reliance on non-bank and informal channels for remittance transfers

(percentage of consumers)

These choices can be costly. Depending on the countries involved, the provider and the payment channel, remittance fees can differ by more than 10 percentage points for the same transfer. Cash-to-cash transfers, where money is deposited and then withdrawn in cash, typically incur fees of around 6% to 12%. Even digital non-bank transfers can cost between 1.5% and 4.5%.

In some cases, costs are substantially higher.^[5] Given the scale of remittance flows, these differences matter. A fee of 5% corresponds to around €140 million on annual remittance inflows to Bulgaria and around €130 million on those to Albania.

Meanwhile, SEPA transfers are designed to make cross-border euro payments as simple and as inexpensive as domestic transfers. Unlike other options, using SEPA can mean more of the money sent reaches recipients, especially when these hold euro-denominated accounts and can therefore avoid currency conversion costs.^[6]

Europe’s answer to expensive cross-border payments

SEPA is Europe's answer to costly and fragmented cross-border euro payments. Its objective is simple: a euro transfer from one participating country to another should be as easy and straightforward as a domestic payment. Before the creation of SEPA, cross-border euro transfers were often slower, involved different national standards and could attract significantly higher fees. SEPA replaced this fragmented landscape with common payment schemes and harmonised standards.

Today, SEPA connects 41 countries. The list of participants includes not only all euro area countries but all those EU Member States not using the euro as their currency and, increasingly, EU candidate countries (those on the path to becoming EU Member States). While Bulgaria and Romania have been part of the SEPA geographical scope for more than 15 years, Albania and the Republic of North Macedonia joined in 2024 and Serbia in 2025, while Bosnia and Herzegovina officially applied for SEPA membership in August 2026. This has further expanded European payment integration into south-eastern Europe, where remittances play an important role for many households.

The benefits for consumers do not materialise overnight, however, as simply becoming part of SEPA’s geographical scope does not immediately bring with it a fully operational payment system. Nevertheless, it represents an important step towards lower-cost, more transparent, reliable and integrated cross-border euro payments.

A success story hidden in plain sight

SEPA's success creates a paradox. The more seamlessly cross-border euro payments work, the less consumers need to think about the infrastructure behind them. SEPA’s functionality makes it largely invisible. Yet this also raises a question. Do households recognise the benefits brought by European payment integration? Survey data suggest that many do not (Chart 2).

Despite SEPA being one of Europe’s most successful financial integration projects, fewer than 40% of consumers in the countries surveyed report having heard of it. Whether their country has been part of SEPA’s geographical scope for many years or joined only recently makes no difference. This is striking given the publicity surrounding recent expansions to include Albania, the Republic of North Macedonia and Serbia. By contrast, awareness of crypto-assets is much higher, although fewer than one in ten consumers own crypto-assets in any of the countries surveyed, with the highest ownership rate at only 6%.^[7]

Chart 2

SEPA awareness lags behind awareness of crypto-assets across CESEE countries

(percentage of consumers)

Still, one could argue that low recognition is not problematic. After all, low awareness does not necessarily imply low usage. Consumers may benefit from SEPA without knowing what the acronym stands for. However, persistently low awareness levels suggest that the benefits of European payment integration may not be equally important to all households.

Indeed, awareness tends to be higher among consumers with higher incomes, higher educational attainment and stronger financial literacy. As Chart 3 shows, consumers with tertiary education are around 17 percentage points more likely to have heard of SEPA than those with only primary education. And, overall, financially literate consumers are substantially more likely to be aware of it.

While it is difficult to quantify the full benefits of SEPA, a simple upper-bound calculation suggests that reducing remittance fees from current levels could save households tens or even hundreds of millions of euro every year. However, the benefits extend beyond transaction costs. Given that a substantial share of remittances are still transferred informally in cash, SEPA also offers gains in convenience, speed, reliability and security, reducing the need to rely on friends or relatives travelling across borders to deliver money.

Chart 3

SEPA awareness is closely linked to education and financial literacy

From integration to consumer benefits

These findings raise an important question. Since payment choices entail meaningful differences in costs, to what extent would consumers act differently if they were aware of the opportunities created by an integrated European payments market? While the survey evidence presented here cannot answer this question directly, evidence from a related information experiment suggests that awareness and consumer choice cannot be conflated.

Providing households with information about deposit insurance guarantees might improve awareness but it has little effect on financial choices.^[8] So, greater awareness of SEPA alone may be insufficient to change payment behaviour. Yet when the cost of sending money across borders can differ substantially across channels, even small changes in payment choices may have tangible consequences for households. And the more people are aware of them, the greater the chance they will benefit. In any case, a better understanding of the benefits of SEPA and the related – almost free – payment services would have immediate concrete effects at least for one group: the workers sending money home across borders. Using SEPA payments instead of costly cash to cash services could save them quite a bit.

The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.

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