Wednesday, 15 February 2012

Simplified cross-border money transfers thanks to SEPA

Yesterday, the European Parliament adopted in the first reading a new Regulation establishing technical requirements for credit transfers and direct debits in euros and amending Regulation (EC) No 924/2009 (position of the EP may be found here, the final text of the Regulation is not yet available). This new regulation establishes a single Euro payments area (SEPA) with the same rules and standards for euro credit and direct debit transactions among banks. While its provisions do not apply to personal credit or debit card payments, it is still of great relevance for European consumers. Since all national banks will now have to apply the same charges, this means that as of 1 February 2014 there should be no more hidden charges in cross-border transactions, which led to unfair competition and hindering of cross-border trade. For example, if a EU citizen moves to another Member State, he may continue using the same bank account, e.g. in his home country, for receiving salary or paying bills in another Member State. 

"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" - this statement has been made by the SEPA rapporteur Sari Essayah (EPP, FI). (Simple and efficient cross-border payments)

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