European Commission to propose cheaper cross-border payments for consumers and more transparency on so-called dynamic currency conversion

Current fees cost shoppers billions of euros every year, according to consumer lobby group.

The European Commission on Wednesday will release proposals that would make euro payments cheaper.

The proposals, if adopted, will affect transfers both between a euro and a non-euro country, and between two non-eurozone EU countries, making it “cheaper to send euro from Belgium to Bulgaria but also from Bulgaria to Poland,” according to an EU official.

Under the proposed changes, Brussels will extend the existing regulation on cross-border payment fees to all transactions made in the EU’s currency.

The proposal “provides that fees charged for cross-border payments in euro are the same that would be charged for equivalent domestic payments in the local currency,” a Commission briefing note on the proposal, seen by POLITICO, says. “This will bring down fees to a few euro or even cents … This is a major change, as fees for a simple credit transfer can be exorbitant in some non-euro area member states (up to €24 for a transfer of €10).”

The Commission will also propose rules that will provide more transparency on so-called dynamic currency conversion — the practice of offering consumers traveling abroad the option of paying for purchases in their home currency.

Consumer lobby group BEUC estimates this costs shoppers across the EU billions of euros every year because the exchange rate offered is often not as competitive as the rate card providers would apply to the transaction if it was made in the local currency. The Commission’s proposals would allow shoppers to “compare the costs of different conversion options to make a fair choice” before opting for one currency or the other, according to the note.