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Brussels, 2nd December 2003

Cross-border payments: Commission seeks views of consumers and businesses

The European Commission has published a consultation paper as a step towards creating a "Single Payment Area" in the EU. The aim is to make it as easy, cheap and secure to make a cross-border payment by credit card, payment card, electronic bank transfer, direct debit or any other means as it is to make a payment within one Member State. This is essential to maximise the efficiency of the European economy, and in particular electronic commerce. According to the latest figures, 143 million non-cash transactions take place every day in the EU, an average of 138 transactions per year per inhabitant. Rules protecting payment services users, providers and systems need to be clear and simple across the Internal Market. The Commission's document reflects discussions already held with Member States, central banks, the payment industry and consumer associations. It includes preliminary suggestions for future EU legislation to constitute a "new legal framework" for payments in the Internal Market. Responses are invited by 31 January 2004.

Internal Market Commissioner Frits Bolkestein said: "A Single Payments Area will mean lower costs for payments, an end to unnecessary delays and much greater certainty over security and legal responsibility. It will also help consumers and businesses to get the full benefits of the single currency. This is not only a matter of convenience but also crucial for the competitiveness of the EU economy. All market economies from time immemorial have depended on payments systems and now in a high tech globalised economy we need high tech European and global payments systems to make it work. The EU Regulation on Cross-Border Payments in euro has made it easier and cheaper to make many types of euro payments within the Internal Market. But significant difficulties remain. The Commission is determined to tackle them."

There have been several recent regulatory and commercial steps bringing Europe closer to becoming a single payments area. These include the implementation of the EU Regulation on Cross-Border Payments in euro, which has brought the cost of cross-border card transactions, electronic cash withdrawals and bank transfers in euro into line with the cost of national transactions (see IP/03/901, IP/02/941, MEMO/03/140, MEMO/02/154). The Regulation has triggered the payment industry to speed up their work to modernise the cross-border payment infrastructure. A major step in this direction was the establishment in June 2002 of a European Payment Council by banks.

But EU payment markets are still fragmented. This can discourage cross-border transactions, hinder trade between EU countries and prevent individuals who live in one Member State from ordering goods and services from another or from using the Internet to buy products at the best prices.

What is more, a recent Commission survey showed that consumer confidence in electronic payments needs to be enhanced, especially in certain Member States (see IP/03/1265).

The Commission's consultation document invites comments on whether existing and new EU laws are necessary. It analyses what form such legislation might take, while emphasising that legislation should only be used where it genuinely adds value. The main issues discussed in the Communication can be summarised under the following general objectives:

Increasing efficiency and competition

The consultation paper sets out options for ensuring that payment providers licensed in one Member State can operate in the others. As a result of different national regulations, this is not currently always the case. Especially new emerging payment techniques (e.g. electronic payments and payments via mobile phones, known as e- and m-payments) are addressed. It also looks at ways of removing legal barriers to cross-border direct debits, which would allow people to pay for example utility bills or magazine subscriptions in one Member State through a direct debit set up via a bank in another.

Clarifying and improving rights for users of payment systems

The document identifies the areas below as possibly requiring further action at EU level, subject to further consultation:

  • defining the information that payment providers must make available to customers

  • shortening the maximum execution time for payment orders from the current six days (under the Cross-Border Credit Transfers Directive) to three days

  • regulating the use of "value dates", which by delaying the crediting of accounts can act as hidden charges

  • establishing the liability of payment service providers towards merchants or their customers when transactions fail for technical reasons, are incorrectly executed or are unauthorised

  • clarifying the conditions under which customers can revoke payment orders

  • establishing adequate procedures for dispute resolution.

The document assesses proposals for "portable" bank account numbers, so that customers could keep their account number if they changed banks, just as they can keep their mobile phone number if they change phone company. It concludes that this is unlikely to be practicable in the short term. It does, however, propose other measures to increase customer mobility, including ensuring that banks provide full information when a customer opens an account on any charges that will be applied if he or she closes it.

Improving payment security and protection against fraud

The consultation document also asks for comments on the feasibility of setting up a single phone number useable anywhere in the EU to block lost or stolen credit or payment cards. It raises also some questions relating to the relationship between data protection and fraud prevention in the field of payments.

It proposes setting out minimum safeguards that payment providers must put in place to combat fraud and hacking and asks for views on addressing possible breakdowns in payment networks. It calls for reflection on EU-wide rules on the validity and verification of digital signatures. It also points to the need for clear definition, applicable EU-wide, of the information that payment service providers must disclose to national authorities on the originators of transactions, in order to combat money laundering and terrorism.

In some technical areas, such as evaluation of the security of payment instruments, the automatisation and standardisation of procedures and the interoperability of infrastructure, the Commission urges the payment industry to make progress, without excluding the possibility of legislation in the longer term if that progress proves insufficient.


The Communication deals with a whole range of issues, including but not limited to those above, on which the Commission seeks views by 31 January 2004. Responses should be sent to:

Fax +


The full text of the consultation document is available at:

See also MEMO/03/248.

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