EU assigns new rules on cross-border payment
European Union finance chiefs last week agreed plans to ease cross-border payments by credit and debit cards as well as electronic bank transfers across the 27-member bloc. They also warned that economic recovery in the EU was threatened by internal economic imbalances in some member states.
Under the new payment rules, consumers will profit from “enormous savings” and would have to deal with less bureaucracy, said German Finance Minister Peer Steinbrueck, whose country currently holds the rotating EU presidency.
The new regulations would ensure legal certainty for consumers and payment service providers, Steinbrueck told reporters after the meeting with his EU counterparts.
EU Internal Market Commissioner Charlie McCreevy said that the new rules would increase competition in the financial services market which would result in a wide range of choices for consumers.
The EU expects that the move will result in 50-100 billion Euro a year in reduced transaction costs.
Each EU country currently has its own rules on payments. The annual cost of making payments between these fragmented systems is estimated at two-three percent of Gross Domestic Product (GDP).
The EU commission has said that a more efficient and competitive payments market will mean that individual Europeans pay less for basic banking services, the average yearly cost of which ranges from 34 Euro to as much as 252 Euro across the EU.
The new payment regulations will cover most types of cash payments, cash withdrawals and credit and debit card use. However, they do not cover payment by check.
European lawmakers next month are expected to give their backing to the new rules, the so-called single euro payments area (SEPA).