EU moves to reduce costs of cross-border payments in euro
The Council of the European Union said on March 4 that it had adopted a regulation on aligning the costs of cross-border payments in euro between euro and non-euro countries and increasing the transparency of charges related to currency conversion services across the EU.
“Paying or withdrawing money in euro anywhere in the EU will soon cost the same as at home,” the statement said.
Since 2002, the same charges have applied to cross-border and national payments in euro within the euro area, while cross-border payments in euro from non-euro countries are subject to high fees.
The reform will align the charges for cross-border payments in euro for services such as credit transfers, card payments or cash withdrawals with the charges for corresponding national payments of the same value in the national currency of the EU country where the payment service provider of the payment service user is located.
“This measure will extend the benefits of cheap cross-border euro transfers to an additional 150 million non-euro area consumers, and a potential extra 2.5 billion transactions per year,” the statement said.
In addition, further transparency requirements will be introduced on charges for currency conversion services.
When consumers make card payments or withdraw cash abroad, they can choose whether to pay in the local currency or their home currency.
According to the new rules, consumers will be informed of applicable charges before making their choice. This will be achieved by introducing an obligation to disclose the charges applied as a percentage mark-up of all currency conversion charges over the latest available exchange rate of the European Central Bank.
“This new level of transparency is intended to raise consumers’ awareness, thereby enhancing competition between different currency conversion services providers,” the statement said.
Most of the provisions will become applicable as of December 15 2019.
(Photo: Miroslav Saricka/ freeimages.com)
