EU approves ruling to chop charges for cross-border Euro transactions

The European Parliament has approved plans to make banks slash fees on cross-border euro payments between EU countries that are in the euro zone and those that are not, according to finextra.com.

Currently, there is no difference for euro area residents or businesses if they carry out euro transactions in their own country or with another of the 19 euro area countries. However, residents of EU countries outside of the euro area do not have the same privileges. For example, a EUR10 cross-border credit transfer from Bulgaria could be subject to a fee of up to EUR24.

This, says the EC, is an obstacle to its vision of a single market, creating barriers to the cross-border activities of households and businesses, in particular SMEs.

Under the new proposals, a cross-border credit transfer in euros from Bulgaria will be priced the same as a domestic Bulgarian lev credit transfer.

The new rules also require that consumers are fully informed of the cost of a currency conversion before they make a payment, for example, with their card abroad. The ruling will hit banks, merchants or ATM operators who will all have to declare currency conversion charges in the same way, making it easy for consumers to select the best option.

Commission VP Valdis Dombrovskis, says: “With this agreement, non-euro country citizens will also enjoy one of the benefits of the euro. That is, low-cost euro transactions using highly efficient euro payments infrastructure. Moreover, this regulation will boost competition in the area of currency conversion. And it will allow Europeans to easily check and compare conversion charges when paying abroad with their cards, or when sending money online to a country with another EU currency.”