Brussels, 27 June 2002
New EU rules mean cheaper cash withdrawals and bank card payments abroad
From Monday 1 July 2002, thanks to the entry into effect of an EU Cross-Border Payments Regulation, customers should pay no more to withdraw euros from cash machines or make card payments in euros in other EU Member States than they pay for the same services in the country where they live. That will mean significant savings for people travelling on holiday or on business. Before the Regulation, withdrawing €100 from a cash machine outside their own Member State cost bank customers an average of €4, while "domestic" withdrawals and payments are usually either free or cost a few cents. The European Commission, the European Parliament and Member States worked closely together to enable fast-track adoption of the Cross-Border Payments Regulation in December 2001 (see IP/01/1827). The Regulation aims to create a "single payments area", so that citizens and businesses can take full advantage of the single currency across the EU and not only in their own Member State. The Regulation, unlike a Directive, is directly applicable in the Member States without national implementing measures.
Commission President Romano Prodi said: " People now have euro notes and coins in their pockets. This Regulation will ensure that they have more of them to spend when they travel in Europe. The advantages of the single currency need to be passed on to each and every European. That is why the Commission proposed the Regulation in July 2001."
Internal Market Commissioner Frits Bolkestein added: "This Regulation adds a new dimension to the Internal Market, and in particular makes it easier and cheaper for people travelling to other Member States. Crossing a border will no longer cost bank customers more. The entry into force next week of the provisions on card withdrawals and payments is good news for everyone as the holiday season begins."
Cash withdrawals and card payments
Under the Cross-Border Payments Regulation, from 1 July 2002 charges for withdrawals in euros from cash machines must be the same whether the customer uses a machine in the country where they hold their bank account or a machine in another Member State. Currently, the average cost of withdrawing €100 in another Member State is about €4, while the cost of the same transaction within the country where the account is based is minimal (see IP/01/992).
Also from 1 July 2002, charges for the use of credit and payment cards (for payments in euros up to €12,500), must be the same whether payments are made in the country where the card is issued or in another Member State. That will make it cheaper for people to buy goods and services when they travel to other Member States. It will also make it cheaper to buy goods and services from other Member States by Internet, telephone or mail order.
Taken together, these provisions entering into force next week will save customers money every time they take out euros or use a card to buy anything in euros in another EU country than the one where they live.
From this time next year (1 July 2003) the same principle of equality between charges for national and cross-border transactions in euros (up to €12,500) will apply to credit transfers between bank accounts. This will mean further substantial savings for bank customers. In 2001, the average charge for a cross-border transfer of €100 between banks in EU Member States was €24 (see IP/01/1293 and MEMO/01/294).
Provisions are already in force under Directive 97/5/EC stipulating that customers must be properly informed in advance of charges for making national and cross-border payments and of any changes to those prices.
The Regulation also aims to make it easier for banks to deal with cross-border transactions. From 1 July 2003, use of ISO (International Standards Organisation) standard codes, namely IBAN (International Bank Account Number) and BIC (Bank Identifier Code), will allow banks to process credit transfers in a fully automated way. Also from that date, banks will no longer need to declare to national authorities (for statistical purposes) any payment below €12,500.
The Regulation also covers payments in non-euro currencies if the Member States where those currencies are used notify the Commission that they want the rules to apply. The Swedish Government announced on 12 June 2002 that it wished to apply the Regulation for Swedish krona.
For answers to frequently asked questions on how the Regulation will work, see MEMO/02/154.
For more details and the full text of the Regulation, please see: http://europa.eu.int/comm/internal_market/en/finances/payment/index.htm