Thanks to EU rules, consumers pay much lower fees on cross-border transfers and banks are investing in new bloc-wide payment systems to further reduce costs
Rules about bank charges for cross-border euro payments have resulted in big savings for consumers and have encouraged banks to invest in new Europe-wide payment infrastructure, the European Commission has claimed.
After the full introduction of the euro, cross-border euro payments cost considerably more than an equivalent domestic payment. Also payment systems were organised by banks nationally and the infrastructures for cross-border payments were inefficient and slow.
The regulation effort has provided an incentive for the payments industry to modernise its EU-wide payment infrastructure and represents an important step towards creating a Single Euro Payment Area (Sepa) for non-cash payments in Europe, the Commission said.
Sepa will sees banks replacing costly manual systems with cheaper electronic ones as they try to keep the cost of transactions down.
A €100 cross-border transfer, which would have cost €24 before the EU regulations were introduced, now costs €2.50, it said. The rules have also given banks an incentive to develop and invest more in an EU-wide payments infrastructure.
The banks' reaction has been very positive and they have set up an "ambitious" project to create Sepa which will treat all euro payments as though they are domestic ones, said EC internal market and services commissioner Charlie McCreevy.
He said in a statement: "By using fully automated payment systems that are of lower cost, this project has enormous potential to bring about huge savings and we fully support it."