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European Commission - Speech - [Check Against Delivery]

Read-out of the College meeting and press conference by Vice-President Dombrovskis on the Commission's proposal for cheaper cross-border pay

Brussels, 28 March 2018

Good afternoon everybody,

As Margaritis said, the European Commission joins the French Republic in paying tribute to the victims who lost their lives in the terrorist attack in the South of France last week. I would like to express our deepest solidarity with France and the French people as they mourn their victims and honour their hero.

Before I begin with our proposal on cross-border payments in the EU, let me give you a few additional details of our College meeting.

Today we adopted a report on European Citizens Initiatives. This new tool entered into force in 2012, and since then, an estimated 9 million Europeans from all 28 Member States have supported a European Citizens' Initiative. So far, four successful initiatives have collected over 1 million signatures each. And the Commission has committed to follow-up actions on 3 of them. During this Commission we have improved the functioning of the tool – making it easier to register, launch and support new initiatives.

We also had another debate on the next long-term budget for the EU – the so-called Multiannual Financial Framework. We discussed many ideas in preparation for the proposal we will put forward on 2 May this year, and the discussion now helped to shape the architecture of the new MFF.

We also adopted an Action Plan on Military Mobility in the EU. My Colleague, Violetta Bulc, will be here after me to present this to you.

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Last but not least, today the Commission is coming with a consumer-friendly proposal for cheaper cross-border payments in euros. We want to give Europeans living in non-euro countries the same deal as to those living in euro countries. We also propose to make currency conversions more transparent and less confusing.

So first of all, we want to make sure that all Europeans have the right to make cross-border payments in euros for the same price as a domestic payment. Currently, only Europeans living in the euro area countries benefit from this right. Around 150 million Europeans who live in EU countries using other currencies do not benefit from it.

In fact, they sometimes have to pay very high and disproportionate fees for such transactions. Our proposal would remove this inequality of treatment. This means that cross-border payments in euros would cost the same as a domestic transaction - no matter where in the EU it is made, which would bring the fees down to a few cents or even zero.

Let me give you an example. Imagine that you live in Italy and you are looking to send 50 euros to Finland. Because both of these countries are in the euro area, EU rules prevent banks from charging more for this transaction than they would for a domestic one. For you, this means the transaction costs the same as if you were sending money from Rome to Naples, which is usually only a few cents. 

Now imagine instead that you live in Bulgaria and you want to transfer the same 50 euros to Finland. Because domestic payments in euro in Bulgaria are expensive, when they even exist, current EU rules do not effectively cap the cost of this transaction. This means you could end up paying as much as 24 euros to transfer the money to Finland. So today we want to put an end to this inconsistency.

With our proposal, we would amend the Cross-Border Payments Regulation to align the price of cross-border transactions in euros with the cost of domestic transactions in the national currency. This rule would apply in all EU countries, whether the national currency is the euro or another EU currency. For non-euro countries, this would lead to cheaper transactions in euros, and the Commission estimates that it would save consumers and businesses about €1 billion per year.

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Our second goal is to give Europeans better information about the price of converting money from one currency to another when paying by card in another EU country. This is especially important for the millions of Europeans who travel within the EU every year, either for work, study, or leisure.

Often when paying by card or withdrawing cash at an ATM in a country which uses a different EU currency from our own, it is almost impossible to know exactly how much it costs. Usually we only find out a few days later when looking at our account statement. That is why our proposal would require that consumers are fully informed about the cost of a currency conversion before they make such a payment or transaction.

This added transparency will also be good in situations where consumers are given the choice between paying in the local currency or in their own currency. This option is referred to as dynamic currency conversion. Due to a lack of information, consumers often find it difficult to choose the option that is cheapest.

By the way, as a general rule it is usually cheaper to choose the local currency option, when you are given the choice. For example, if you live in a euro country and are travelling to Poland, and you are asked if you would like to pay in zlotys or in euros, you should choose zlotys.

Our proposal would remedy this issue by asking the European Banking Authority to develop transparency standards. This should allow travellers to compare the costs of different conversion options, and to make a fair choice. Until that transparency has been established, we propose to apply a cap on currency conversion costs, which would also be defined by the European Banking Authority.

To conclude, today's proposal delivers on the first two points of our Action Plan for EU consumer financial services, which we presented a year ago. It will save money for both consumers and companies, and contribute to completing the Capital Markets Union. And it will make sure the benefits of cheap cross-border payments in euros and predictable currency conversion are enjoyed by all Europeans.

Thank you very much.

SPEECH/18/2681

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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