The European Council on March 4 adopted a regulation on aligning the cost of cross-border euro payments between countries both inside and outside the Eurozone and also moved to increase the transparency of charges related to EU-wide foreign exchange conversion services.
According to the Council, the reform aims to align charges for cross-border euro payments for services such as credit transfers, card payments or cash withdrawals.
This measure will extend the benefits of cheap cross-border transfers on €150 million valued payments. Consumers outside the euro area could affect transactions of an additional value of €2.5 billion per year.
Further transparency requirements on charges for exchange conversion services will also be introduced. When consumers make card payments or cash withdrawals abroad, they can choose to pay either in local currency or in their country’s currency.
Under the new rules, consumers will be informed of the applicable fees before making their choice. The measures will be achieved by establishing an obligation to make public the charges levied as a percentage margin of all currency conversion charges compared to the last available exchange rate of the European Central Bank.
This new level of transparency aims to increase consumer awareness, thus enhancing competition between different exchange conversion service providers. Since 2002, the same fees apply to cross-border and national payments in euros within the eurozone, while cross-border euro payments from countries outside the euro area subject to high fees.