Cross-border bank transfers should become faster, cheaper and safer for EU citizens thanks to "single Euro payments area" legislation passed by Parliament on Tuesday. EU-wide rules to ensure that banks compete fairly, eliminate hidden national charges, and accelerate transfers could save up to €123 billion within six years, benefitting clients, banks, and businesses.
"This regulation really benefits citizens. It will enable them to make payments from one bank account to others all over Europe, just like a normal domestic payment. It will be possible to make all cross-border credit transfers and direct debits in the same way as normal domestic payments. A person working abroad will not need to open a new bank account in the host country, but may receive his or her salary in the home country bank account. Companies will benefit too, by not needing more than one bank account in Europe for each payment purpose", said SEPA rapporteur Sari Essayah (EPP, FI).
The single Euro payments area (SEPA) regulation lays down common rules and standards for euro credit and direct debit transactions among banks. It would not apply to personal credit or debit card payments.
Requiring banks to comply with SEPA rules will enable their clients to use a single bank account to make euro payments to and from all SEPA countries.
To this end, the rules will ensure that euro credit transfers or direct debits that are possible within SEPA countries are also possible across frontiers between them.
The legally-binding deadline for banks to migrate to the new standards is 1 February 2014. Parliament's negotiators insisted on a single deadline for all euro credit and debit payments to make the switch to the new system easier to understand for EU citizens.
Benefits to citizens
For EU citizens, it will no longer matter in which Member State a bank account is held. Transfers should become cheaper, faster and safer.
For example, EU citizens moving within the Union could use a single euro account, into which a salary earned in another country could be paid. They could also pay bills in one country through an account held in another.
All account users stand to gain, because international competition among service providers should drive down prices. Increased competition among banks to supply services should also help to cut today's inflated costs, and where costs are already low, they should remain so.
Parliament's negotiators sought to make the migration to SEPA standards easier for bank clients, by enabling banks to offer conversion services from national systems and to phase out the need to provide the Business Identifier Code (BIC) code (the IBAN international bank account number should suffice).
Another gain is a requirement to apply non-discriminatory charges to transfers, irrespective of the amount involved.
Benefits to businesses
Businesses could set up cross-border direct debits in euro between any two bank accounts anywhere in the EU, enabling them to bill customers regularly across borders.
By eliminating multilateral interchange fees on cross-border direct debits as of 2012, the regulation will enable businesses to establish their payment centres in any EU Member State.
Businesses could also organise all cross-border euro payments from a single euro account in a country of their choice in order to improve money management and speed up cash flows at lower cost.
The new legislation was adopted in the first reading with 635 votes in favour, 17 against and 31 abstentions.
Procedure Co-decision (1st reading)