By Jonathan Spicer ISTANBUL, March 19 (Reuters) - The European Union pitched to Turkey last month the idea that the candidate for bloc membership could join a cost-cutting payments system to boost
EU Suggests Turkey Join SEPA Payment System to Lower Cross-Border Costs
EU Proposal and Potential Impact on Turkey's Financial Integration
By Jonathan Spicer
Background of the SEPA Proposal
ISTANBUL, March 19 (Reuters) - The European Union pitched to Turkey last month the idea that the candidate for bloc membership could join a cost-cutting payments system to boost integration efforts and benefit those sending money abroad, the EU envoy to Ankara told Reuters.
Jurgis Vilcinskas, the bloc's chargé d’affaires in Turkey, said European Commissioner for Enlargement Marta Kos discussed the proposal with Foreign Minister Hakan Fidan, when the two met last month in Ankara.
About SEPA and Its Benefits
The EU says its 41-country Single Euro Payments Area (SEPA) makes cross-border euro-currency payments cheaper, faster and more secure. Users in far smaller Balkan candidates Albania, Moldova, Montenegro and North Macedonia, which adopted the scheme last year, could save up to 500 million euros, it said.
Potential Benefits for Turkey
"SEPA could present a valuable opportunity to strengthen Turkiye’s economic integration as a candidate country and a key trade and economic partner of the EU," Vilcinskas told Reuters in a response, using the Turkish spelling of the name.
It could generate "significant savings annually for Turkish businesses, consumers and diaspora by making cross-border transfers in Euros as fast and as cheap as domestic ones," he said.
Turkey's Response and Considerations
Ankara's view on the matter is unclear.
A Turkish diplomatic source confirmed that during Kos' February 6 visit an offer had been conveyed to Ankara, adding the SEPA issue was under the jurisdiction and coordination of the Finance Ministry, which did not comment on the matter.
Economic Implications and Requirements
STEPS EYED TO BOLSTER ECONOMIC TIES
Under SEPA, Turkish banks could stand to lose revenues on transfers, which vary widely based on size. A Turkey-Europe transfer of 1,000 euros to 5000 euros can cost 40 euros, according to Western Union.
Europe is Turkey's largest trading partner with more than 200 billion euros in volume. With bloc membership talks effectively stalled for years, both say they want to modernize their customs union and move to boost economic ties.
Compliance and Support from the EU
Vilcinskas said Turkey would need to comply with the EU's Payment Services Directive, including strengthening its anti-money laundering and data protection rules, adding that the Commission was ready to support Turkey in any SEPA endeavour.
Expert Opinions on SEPA's Impact
SEPA could bring "significant" savings, especially for the large Turkish diaspora across Europe, a Turkish banking source said.
In an interview this month, Odile Renaud‑Basso, president of the European Bank for Reconstruction and Development, said SEPA would "basically make transactions cost-free".
(Reporting by Jonathan Spicer; Additional reporting by Tuvan Gumrukcu in Ankara and Ebru Tuncay in Istanbul; Editing by Daren Butler and Clarence Fernandez)
