Bosnia and Herzegovina has yet to meet all the requirements necessary to apply for and join the Single Euro Payments Area (SEPA), resulting in annual financial losses exceeding 100 million euros. Although the Central Bank of Bosnia and Herzegovina has completed technical preparations for the application, key legal conditions remain unmet, with crucial fiscal laws still awaiting adoption in entity parliaments.
Currently, international money transfers to Bosnia and Herzegovina come with significant costs. For example, a payment of 1,000 euros can lose more than 50 euros in bank fees before reaching the recipient. Membership in SEPA would substantially reduce these costs, making transactions faster and far more affordable.
The introduction of SEPA standards would bring wide-ranging economic benefits. Citizens would no longer need to wait several days for transfers, while the country’s diaspora could send money more quickly and at lower cost, without high intermediary fees. For businesses, this would mean reduced transaction expenses, faster capital flow, and improved predictability in operations. Additionally, banks would become more competitive and gain opportunities to develop new digital financial services.
However, progress now depends on political action. Entity parliaments must adopt the necessary fiscal legislation required for SEPA-compliant transactions. Even after this step, further work will be needed to integrate domestic banks into the European system.
As Admir Čavalić, Chairman of the Economic and Financial Policy Committee of the Parliament of the Federation of BiH, explains, joining SEPA is only the beginning. “Domestic banks must adapt to the system and connect with European or parent banks, which could take an additional six months to a year,” he noted.
Business representatives also stress the urgency of joining. According to Mirsad Jašarspahić, President of the Chamber of Commerce of the Federation of Bosnia and Herzegovina, transaction fees for companies are currently up to six times higher due to the country’s exclusion from SEPA. With more than 70 percent of businesses in the Federation exporting to EU markets, faster transactions would significantly improve efficiency, particularly in trade involving multiple currencies.
The European Commission is expected to review SEPA applications in May, but Bosnia and Herzegovina will not be considered at that session. The next opportunity comes in November. Until then, analysts emphasize that only strong political will and timely legislative action can bring the country closer to joining the single euro payments area.
