MEPs scrap excessive fees on cross-border payments outside Eurozone
In new rules, the European Parliament has said that banks should charge equally for cross-border payments in euro and domestic payments and make currency conversion costs transparent. The plenary to end discrimination against payment service users in the EU outside the Eurozone was adopted by 532 votes in favour, 22 against and 55 abstentions.
Before the end of the year, charges for cross-border payments in euro within the EU must be in line with charges for national payments made in the official local currency (the ‘same charge’ rule). Additionally, member states are free to impose rules on banks to apply the same charges to cross-border and domestic non-euro payments.
The measures will also protect customers from being charged arbitrary costs for currency conversions. At each transaction, they will be informed about the amount to be paid in the local currency and the currency of their account. To make conversion costs more transparent, currency conversion charges will be expressed in a common way for payments at a point of sale or ATM (using the ECB reference rate, plus additional charges set individually by banks).
Customers will receive an electronic push notification such as a text message, e-mail or notification through the payer’s mobile or web banking application about the applicable currency conversion charges. These notification services have to be offered free of charge. Banks would also have to disclose the estimated full cost of currency conversion in the case of bank transfers before the payment is made.