Right before the Christmas break and as one of the final acts of the Austrians before the hand-over to the Romanian Presidency in the Council, EU ambassadors endorsed a provisional agreement with the European Parliament on cross-border payments in euros.
With the objective of strengthening the Single Market for the financial services, and as part of the Action Plan launched by Juncker in March 2017, the cross-border payments proposal was identified as a crucial act for the integration of consumer financial services and the EU economy.
Since 2002 the same charges have been applying for euro payments in the euro area whether at home or cross-border while payments in euros from non-euro Member States remained subject to higher fees. The objective of the Commission’s proposal is to make payments cheaper in Europe by aligning the charges for cross-border payments in euros between euro and non-euro Member States for services such as credit transfers, card payments or cash withdrawals.
Furthermore, the text increases the transparency requirements related to charges in the currency conversion services across the EU. Therefore, when customers make card payments or withdraw cash, they will be informed about the applicable charges and they will be able to choose whether to pay in the local or their home currency.
According to the Commission’s estimation, the proposal will have an impact on 150 million consumers and on 1.8 billion transactions a year, as well as provide an estimated savings for consumers and businesses of 1 billion euro per year.
After the Parliament has reached an agreement at the beginning of November in its ECON Committee, the two co-legislators have engaged in interinstitutional negotiations. As a next step, the Parliament and the Council will adopt the agreed text before the regulation will be published in the Official Journal and become directly applicable throughout the European Union.
By Elona Morina, European Affairs, ABBL