Euro adoption lowers remittance expenses for Croatia, according to exclusive data
Croatia officially joined the eurozone on January 1, 2023, marking a significant milestone for the country and its residents. This transition has brought about a series of changes, particularly in the realm of money transfers, making the process more seamless and cost-effective for both senders from euro and non-euro countries.
## Expected Savings on Money Transfers
For senders in euro countries, the elimination of currency exchange costs is a major advantage. With transactions now in the same currency, exchange fees are no longer applicable, reducing transaction costs significantly. The integration into the eurozone also simplifies the process and reduces the time it takes to complete transactions.
Senders from non-euro countries, while still subject to exchange rates, can enjoy increased stability and predictability in transactions, thanks to the euro's predictable nature. However, they may still incur some exchange fees, depending on the service provider and the exchange rate at the time of transaction.
## Differences in Savings
Exchange fees are a significant area of savings for senders from euro countries, as transactions are now in the same currency. Non-euro countries may still incur these fees, depending on the service provider and the exchange rate.
Convenience and speed are also advantages for eurozone senders, as transactions are generally faster and more straightforward due to the elimination of currency conversion hurdles.
Both euro and non-euro senders benefit from the stability of the euro, which can reduce the volatility risk associated with currency exchange.
## The Impact of the Change
According to Lucy Ingham, Head of Content at our platform, money transfers to Croatia have become cheaper since it joined the euro. Fifty-five percent of money sent to Croatia in 2022 was sent from countries that already use the euro. This change will make a dramatic difference to the cost of sending remittances to Croatia for 55% of regular senders globally.
In 2022, Croatia received remittances totaling $6.7 billion. Money transfers to Croatia are currently averaging 29% cheaper than prior to the switch to the euro. Euro-to-euro remittances, which do not require a currency conversion, are far cheaper than those across two different currencies.
Germany was the biggest source of money transfers to Croatia in 2022, followed by Serbia and Australia. Our pricing data indicates that money transfers using euros are cheaper than those using HRK for some providers.
In conclusion, Croatia's adoption of the euro brings economic benefits, including a reduction in the cost of money transfers, making it easier for people to send and receive funds across borders.
entrepreneurs in the remittance market sizing might see potential for growth, given the lowered costs of transactions within the eurozone; the Finance sector can anticipate increased business due to the simplification and cost-effectiveness of money transfers within the eurozone, boosting cross-border transactions and seamless integration with technology platforms.
