EBF advisor: Pascale – Marie BRIEN
Publication date: 30 October 2017
Since the introduction of the Euro, the EU has achieved a significant reduction in the costs of cross-border transactions (money transfers) through the establishment of a Single Euro Payments Area (SEPA) which:
- introduced a set of standards for euro transactions with the SEPA Credit Transfers and SEPA Direct Debits;
- prohibited IBAN discrimination (i.e. a single euro account, whatever the Member State, is sufficient to make any transfer in euro within the EU);
- and imposed, through Regulation 924/2009 on cross-border transfers, that euro transactions across borders must not cost more than corresponding euro transactions within a given EU Member States.
However, EU citizens who need to make transactions that involve EU currencies of EU Member States other than the euro still face major costs and obstacles which stand in the way of a deepening of the internal market. These issues were raised in December 2015 when the Commission presented a Green Paper on retail financial services to consult on the potentials of a more integrated market for these services and the actions needed to achieve this goal. The consultation sought views on how to improve choice, transparency and competition in retail financial services to the benefit of European consumers, and on how to facilitate the cross-border provision of these services. In relation to payments, two questions on transaction fees and currency conversion were asked (Question 12 and Question 13) which received about 270 answers each.
The feedback to the Green Paper indicated that opaque and potentially excessive fees are a deterrent to cross-border transactions within the EU, particularly when they involve non-euro currencies.
Following the Green Paper consultation, the Commission presented an Action Plan on Consumer Financial Services that set out further steps towards a genuine technology-enabled Single Market for retail financial services where consumers can get the best deals while being well protected. The present public consultation focuses on actions 1 (which was already included in the 2017 Commission work programme) and 2 of the Action Plan and aims at collecting feedback on transaction fees and currency conversion.
To read the full document click on the icon below