National transfers in euros have significantly increased during this year.
According to data from the Bank of Albania, in the national Euro payment system, AIPS Euro, more than 200,000 transfers have been made in the European currency for the first 10 months of the year. Euro transfers have increased by 66% compared to the same period last year.
In value, transfers for the 10-month period reached almost 3.3 billion euros, with an annual increase of 23%.
The growth in the number and value of national bank transfers in euros is an indicator of the further increase in the use of the currency in domestic economic transactions in Albania. The increase in incoming flows in the Balance of Payments has brought more euros into the Albanian economy and financial system.
Statistics from the Bank of Albania showed that by the end of September, euro-denominated bank deposits had increased by 16.5% compared to a year earlier.
The AIPS Euro payment system started operating in January 2022, with the aim of reducing the costs of bank transfers in the euro currency. Before the establishment of this system, national transfers in euros could only be made through the use of accounts that Albanian banks had with correspondent banks abroad.
This route caused delays and, above all, much higher costs compared to transfers in lek. High commissions often led bank customers to move funds from one bank to another through cash withdrawals and deposits.
With the establishment of the AIPS Euro system, the Bank of Albania also set a ceiling for the commercial banks for the commissions they could charge their clients.
For payments initiated by participating clients and transferred through the AIPS Euro system, with a value equal to or less than 10,000 euros, the total commissions applied by the originating participant for each payment order must not exceed 0.2% of the transferred amount, and the floor commission cannot be higher than 6 euros.
For payments initiated electronically, the total commissions applied by the originating participant for each payment order must not exceed 50% of the total commissions applied for each payment initiated in a non-electronic form. This means applying the total floor commissions of no more than 3 euros, the total commissions of no more than 0.1% of the transferred amount for a value equal to or less than 10,000 euros.
In total, for payments initiated by participating clients and transferred through the AIPS Euro system, the total maximum commissions applied by the originating participant for each payment order must not exceed 50 euros, regardless of the amount. No commissions are applied for funds received through this system.
In addition to reducing costs, this project is considered to have brought positive effects also from the perspective of managing physical euros by banks and promoting electronic payments in this market segment, encouraging Albanian citizens to use these instruments.
