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NewsMaterial3 min readDisconfirmAI Editorial

The SEPA Paradox: Why Low-Cost Cross-Border Transfers Connecting 41 Countries Are Overlooked by Remittance-Funded Households

Elisabeth Beckmann and other authors from the European Central Bank (ECB) blog, drawing on data from the Austrian National Bank survey, reveal that while the Single Euro Payments Area (SEPA) connects 41 countries and cross-border transfer costs are near domestic levels, consumer awareness in Southeastern Europe remains below 40%. Approximately two-thirds of remittance recipients still rely on cash or money transfer operators, with fees ranging from 1.5% to 12%. The authors also cite an analogy experiment regarding deposit insurance, noting that merely providing information may not change payment behavior; deeper barriers such as account accessibility and education levels play a more significant role.

2026-11-03

In an article published on the European Central Bank (ECB) blog in November 2026, Elisabeth Beckmann, Justus Meyer, and Katharina Allinger highlight a thought-provoking phenomenon: although the Single Euro Payments Area (SEPA) now connects 41 European countries, making cross-border euro transfers nearly as convenient and cost-effective as domestic payments, survey data from six Southeastern European countries show that consumer awareness is less than 40%. This figure shows little variation regardless of whether a country has been part of SEPA’s geographical scope for 15 years or just two years. The authors explicitly state that these views are their own and do not necessarily represent the position of the European Central Bank or the Eurosystem.

This paradox carries direct economic costs. According to data from the Austrian National Bank (OeNB) Euro Survey cited by the authors, in Bulgaria, Romania, Albania, Bosnia and Herzegovina, North Macedonia, and Serbia, approximately one-third of remittance recipients receive funds via relatives or friends carrying cash, and another third use physical money transfer operators; bank channels (including SEPA transfers) have far from become dominant. As the newest member of the euro area, Bulgaria sees annual remittance inflows nearing €3 billion; Albania’s remittance inflows exceed €2.5 billion, accounting for about 8.4% of its GDP.

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The fee differences are concrete. Citing the World Bank’s Global Remittance Prices Database, the authors note that in corridors such as Germany-Bulgaria, Spain-Romania, and Italy-Albania, cash-to-cash remittance fees typically range between 6% and 12%, while digital non-bank remittances cost between 1.5% and 4.5%. In contrast, SEPA transfers are designed to make cross-border euro payments as simple and inexpensive as domestic ones. At a 5% fee rate, the annual remittance inflow to Bulgaria alone corresponds to a cost of approximately €140 million, and to Albania, approximately €130 million.

However, the authors simultaneously acknowledge unsettling evidence: they cite an experiment related to deposit insurance information indicating that providing households with information on deposit insurance guarantees might raise awareness but has little effect on financial choices. This implies that simply increasing SEPA awareness may not be enough to alter payment behavior. More fundamental barriers lie in account accessibility—approximately half of the population in Albania lacks a current account or similar product, compared to 25% in Romania and 17% in Bosnia and Herzegovina, while the unbanked proportions in Bulgaria, Serbia, and North Macedonia reach 10%, 8%, and 2%, respectively.

The surveys also reveal unequal distribution of awareness: consumers with higher education are about 17 percentage points more likely to be aware of SEPA than those with only primary education, and financially literate consumers are similarly more likely to know of the system. This stands in sharp contrast to cryptocurrencies—although actual crypto-asset ownership does not exceed 6% in any of the surveyed countries, awareness of crypto-assets is much higher than that of SEPA.

The authors’ conclusion is prudent: even if increased awareness alone is insufficient to change behavior, when cross-border remittance costs differ so significantly across channels, even small shifts in payment choices can have tangible consequences for households. For migrant workers currently using high-fee cash channels to send money home, switching to SEPA transfers could save considerable amounts—provided they possess accessible euro accounts and their payment service providers participate in SEPA.

Sources

  • ecb.europa.euEuropean Central Bank↗
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