The Impact of Sepa Implementation on E-Commerce Growth and Banking Performance in GIIPS

Abstract

This study investigates the effects of the Single Euro Payments Area (SEPA) implementation on e-commerce growth and banking sector performance within GIIPS countries (Greece, Ireland, Italy, Portugal, and Spain). SEPA was introduced to simplify euro-denominated transactions across Europe, offering cost-effective, fast, and standardized cross-border payments. The research uses a mixed-method approach, combining statistical analyses and econometric modeling. Quantitative data from Eurostat and the European Central Bank (ECB) were used to assess changes in total transaction volumes, net interest income (NII), net fee and commission income (NFCI), and return on equity (ROE) for banks before and after SEPA implementation. Additionally, a regression model using STATA14 evaluates e-commerce turnover in GIIPS countries, incorporating independent variables such as internet banking usage, return on equity, inflation, interest rates, and total transactions. Findings reveal that SEPA significantly contributed to a rise in electronic payments, particularly among younger and more educated consumers. E-commerce turnover showed a strong correlation with internet banking adoption, while inflation had a negative effect. The total volume of payment transactions increased notably after SEPA, indicating improved engagement and business activity. Although banks initially experienced reduced commission income due to lower transaction fees, overall long-term performance improved with higher transaction volumes and cost efficiencies. For Albania, similar benefits are anticipated, particularly in e-commerce and foreign trade.