Ukraine plans to join SEPA: what are the prospects and implications?

In June 2025, Ukraine officially announced its intention to join the Single Euro Payments Area (SEPA). This decision marked another step toward deeper integration into the European Union’s financial infrastructure and modernization of the Ukrainian banking system. Joining SEPA opens up new opportunities for both businesses and citizens: simplifying international transfers, reducing fees, and increasing the transparency and speed of financial operations.

However, along with the benefits, this also brings certain challenges – from technical readiness to regulatory alignment with European standards. Therefore, to better understand what SEPA is, what advantages Ukraine will gain from joining it, and what consequences this will have for the financial sector, entrepreneurs, and consumers, we have prepared the following explanation.

What is SEPA?

SEPA (Single Euro Payments Area) is a unified euro payments area created to simplify money transfers within Europe. The initiative was launched by the European Commission, the European Central Bank, and the European Payments Council with the goal of creating a single financial space where cashless euro transactions between participating countries are as simple, fast, and secure as domestic payments within one country.

In practice, SEPA allows individuals, companies, and government institutions to make euro-denominated bank transfers within the area without the need to open accounts in other countries or pay additional fees for “international” transfers. All transactions within SEPA follow unified rules, standards, and formats, which simplifies processing and reduces costs for all market participants.

As of July 2025, SEPA includes 41 countries, including all European Union member states, as well as Iceland, Liechtenstein, Norway, Switzerland, the United Kingdom, Monaco, San Marino, Andorra, and the Vatican.

At the end of 2024 and into 2025, Albania, Montenegro, North Macedonia, Moldova, and Serbia joined SEPA. Their banks and payment institutions are expected to begin processing SEPA transfers by the end of this year. Meanwhile, Kosovo and Ukraine are also preparing to submit applications for membership.

Joining this system is not only about financial transfers – it is also an important step in integrating into the European economic area.

What Benefits Will SEPA Membership Bring to Ukraine?

Ukraine’s accession to SEPA offers a number of strategically important advantages – at the state level, as well as for businesses and citizens. It is not just a technical modernization of the payment infrastructure, but a real step toward economic integration with the European Union.

1. Cheaper and faster international transfers

For Ukrainians receiving income from abroad or sending money to relatives in the EU, joining SEPA will mean lower bank fees and faster transactions. Euro-denominated money transfers will be completed within hours, and sometimes even on the same day.

The Institute for Economic Research and Policy Consulting (IER) estimates the potential economic benefit of Ukraine’s accession to SEPA for businesses and the population at €70–100 million per year, due to reduced transaction costs

2. Support for Ukrainian business in Europe

Ukrainian companies working with European partners will be able to make euro-denominated payments on equal footing with EU-based companies. This will increase their competitiveness, reduce transaction costs, and make it easier to integrate into international payment systems.

3. European standards of transparency

SEPA requires the use of unified standards for security, transparency, and reporting. This will help combat financial abuse, improve transaction monitoring, and strengthen the trust of European partners and financial institutions.

4. Technical modernization of the banking system

To join SEPA, the National Bank of Ukraine and commercial banks must adapt their payment systems to European requirements. This means upgrading infrastructure, digital tools, and payment processing standards.

5. A geopolitical signal

Formal accession to SEPA is also a symbolic and political move that reflects Ukraine’s aspiration toward European integration. It strengthens international trust and lays the groundwork for further steps toward EU membership.

What Challenges Does Ukraine Face on the Path to SEPA?

While Ukraine’s accession to SEPA opens new opportunities, the integration process also comes with a number of serious challenges and obligations directly related to aligning the country’s financial system with European standards.

1. Enhanced financial monitoring and accountability

One of the key tasks will be harmonizing Ukrainian legislation with EU norms in the areas of anti-money laundering (AML) and combating the financing of terrorism (CFT). This will require stricter requirements for customer identification, transaction monitoring, and verification of the business reputation of financial market participants. All primary financial monitoring entities will be obligated to report suspicious activities to law enforcement authorities, prevent individuals with criminal records from managing companies, and thoroughly verify ultimate beneficial owners.

2. Protection of personal data

Ukrainian financial institutions will need to ensure a high level of protection for personal data, particularly in the collection, processing, and transmission of information. This entails not only improving internal security policies but also upgrading technical systems in accordance with European standards – including compliance with the GDPR.

3. Expansion of state control and creation of new registries

Integration into SEPA involves deeper interaction with state authorities and information exchange systems. For example, banks, non-bank financial institutions (NFIs), and other market participants will be required to notify the State Tax Service about the opening and closing of personal accounts or electronic wallets. New databases are also planned, such as the Bank Account Registry and the Trust Ownership Registry.

4. Inclusion of new entities in the monitoring system

The scope of primary financial monitoring will expand – it may include trustees of trusts, dealers in cultural assets, and other market players who were previously not subject to these requirements. This means that financial transparency responsibilities will broaden significantly and will require new procedures and oversight.

5. Disclosure of banking secrecy

One of the most sensitive challenges is the transformation of the approach to banking secrecy. Within SEPA and the broader European financial information exchange framework, Ukraine will be required to ensure transparency of account ownership and financial operations. This implies that government authorities – including tax and law enforcement agencies – will have automated access to previously confidential data.

6. Technical and institutional readiness

By the time of accession, Ukraine’s financial system must fully comply with SEPA standards – including message formats (such as ISO 20022), requirements for information exchange, data protection, and payment security. The National Bank, commercial banks, and payment institutions must undergo a compliance audit and sign the necessary agreements with the European Payments Council (EPC).

When Could Ukraine Realistically Join SEPA?

The National Bank of Ukraine has already begun official steps toward joining SEPA, including signing a Memorandum of Understanding with the European Payments Council (EPC), announcing its readiness to submit a full application (submission is expected in the second half of 2025), and preparing the relevant legislation (Draft Law No. 13233 dated April 30, 2025, is already under consideration in the Verkhovna Rada – more on that below). At the same time, accession to SEPA is a phased process that may take between one and three years, depending on the pace of meeting the necessary requirements.

The first tangible changes for the banking sector are expected to begin as early as 2026 – with pilot integrations, technical onboarding, and staff training. Full accession to SEPA, under an optimistic scenario, may take place between 2027 and 2028. Meanwhile, Ukraine is already actively preparing its payment infrastructure: IBAN has been implemented for domestic accounts, and the Electronic Payment System is undergoing modernization.

The ultimate goal is to make Ukraine’s financial system a part of the European space, where euro transfers are as simple and seamless as they are within EU member states. This would mark an important step toward deeper economic integration, export development, investment attraction, and improving the everyday financial experience for Ukrainians.

Ukraine’s Legal Framework for SEPA Accession

Let’s take a closer look at the legislative foundation that will underpin Ukraine’s integration with SEPA. On April 30, 2025, the Government of Ukraine submitted to the Verkhovna Rada Draft Law No. 13233 titled “On Amendments to Certain Legislative Acts of Ukraine to Ensure Compliance with European Union Law and the Relevant Criteria Established by the European Payments Council for Ukraine’s Accession to the Single Euro Payments Area (SEPA)”.

What changes are being proposed?

• Creation of a Register of Accounts and Personal Safes of individuals, to be administered by the State Tax Service of Ukraine (STS). The register will include data on the opening/closing of accounts or safes, their IBANs, and the identities of the owners.
• Electronic access to account and safe deposit data will be granted to the STS, and the information will also be available to other government bodies including the State Financial Monitoring Service, NABU, the Bureau of Economic Security, the National Agency on Corruption Prevention, ARMA, and enforcement services. The registry will not contain account balances or transaction amounts – only metadata (e.g., date, account number, account holder).
• Penalties for non-compliance by banks: failure to report changes to the registry will result in a fine of 680 UAH per incident.

In essence, the draft law reduces the scope of banking secrecy by giving state authorities the ability to monitor all citizen accounts. In the long term, the registry could become a tool for fully lifting banking secrecy. That is why the National Bank of Ukraine (NBU) and the Ministry of Finance are actively discussing this initiative. First Deputy Finance Minister Denys Uliutin has confirmed that the issue is under discussion and promised that the registry will be “closed,” without public access. However, it remains to be seen how this will play out in practice.

Nevertheless, the creation of such a registry is a mandatory requirement for joining SEPA and for the future integration of Ukrainian banks into the European payment infrastructure. Therefore, we can only hope that the final decision will be balanced and will ensure both European integration and the protection of Ukrainian citizens’ privacy.

Draft Law No. 13233 and subsequent regulatory initiatives are key elements of the country’s preparation for integration into SEPA. The success of these steps will determine not only the pace of accession but also the level of trust in Ukraine’s financial system – both from international partners and from its own citizens.

Thus, ahead lies a challenging yet highly promising transformation that has the potential not only to improve payment services but also to significantly strengthen Ukraine’s position in the European financial market.