February 2018

Did you Know?

The European Commission (EC) has submitted a proposal to reduce the charges on cross-border payments (COM 2018/163) – made in euro – for people and businesses in non-eurozone Member States.

EDC News: EC Proposal for Cheaper Cross Border Payment

The completion of the EU Single Market has been hampered by the high costs associated with cross border payments by eurozone and non-eurozone Member States.  The European Commission addressed this issue through the development of the Single Euro Payments Area (SEPA), which used to be a single electronic payment system for eurozone Member States but now applies to all Member States. Upon the implementation of SEPA, it was realised that non-eurozone Member States were unfairly charged. Thereby, the EU proposed (COM 2018/163) two amendments to Regulation 2009/924 regarding charges on cross-border payments (made in euros). One amendment is to reduce these charges to be the same as the domestic charges of the Member State making the payment. For example, a cross border payment, made in euro, from Bulgaria to France will incur the same charges as that of a domestic payment (made in lev) between two entities within Bulgaria.  

The second amendment is to ensure transparency on card payments made in all Member State currencies. In order to actualise this, the proposal obligates transfer service providers to inform their clients of the full costs of services, conversion rates and conversion options available prior to payment, thereby, allowing the client to make an informed decision. To make the necessary technical changes to their systems the European Commission has given service providers a 3 year transition period.

For more information

• Cross Border payments in the European Union: Review of Regulation 2009/924, European Parliament
• European Commission’s brief and relevant links and factsheet on its proposal for cheaper euro transfers and fairer currency conversions everywhere in the EU
• Public consultation on transparency and fees in cross-border transactions in the EU (including consultation outcome and responses), European Commission
• Countries under the Single European Payment Area (SEPA), European Commission
• Final report (draft copy) on the Regulatory Technical Standards (RTS) for payment service providers, European Banking Authority (EBA)

Legislation and other relevant legal documents

• DIR 2015/2366 on payment services in the EU internal market, repealing DIR 2007/64/EC
• Regulation 2012/260 establishing technical and business requirements for card transfer & debits in euro (includes timelines for all Member States to join SEPA)and amending  Regulation 2009/924
• Proposal for the amendment of Regulation 2009/924 as regards certain charges on cross-border payments in the EU and currency conversion charges (COM 2018/163 final)