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UPDATE 1-EU Commission plans cutting fees on non-euro cross-border payments
March 15, 2017 / 6:30 PM / 8 months ago

UPDATE 1-EU Commission plans cutting fees on non-euro cross-border payments

(adds other proposals from draft document)

By Francesco Guarascio

BRUSSELS, March 15 (Reuters) - The European Commission will propose rules by the end of 2017 to cut retail fees imposed on cross-border payments made inside the EU with currencies other than the euro, according to a draft document of planned regulatory changes to consumer financial services.

EU regulations already ensure equal pricing on transaction charges for transnational payments within the euro zone made in euros, but charges for other EU currencies such as the British pound and Polish zloty are not regulated.

The document shows the EU executive plans to extend the rules to all EU currencies on transactions made across the entire bloc.

“Fees for such cross-border transactions typically remain very high and well above the level of fees for purely national transactions in non-euro currencies, with high minimum fees that make small transactions very expensive,” the Commission said in a document expected to be formally adopted next week.

The measure, if approved by legislators and EU states, would hit banks who profit the most from the charges. Internet-based payment services have developed in recent years offering lower fees.

The “Consumer finance action plan” draft said the Commission will by mid 2018 also consider measures to increase the transparency of conversion rates for EU consumers using payment cards or withdrawing money in other member states, in a bid to bring down costs for shoppers.

Brussels also plans to make it easier for consumers to switch between retail financial services and to improve the reliability of comparison websites, the document showed.

The paper, which lists priority actions in retail financial services for the next two years, also proposes increasing the price-transparency and protection for people renting cars as well as drivers who are victims of accidents outside their country.

It also proposes common standards to assess consumers’ financial credentials by the end of next year to make it easier to get a loan in a foreign EU country.

The Commission also said it plans to favour the take-up of innovative financial services, known as fintech, although no concrete proposals are included in the action plan. (Reporting by Francesco Guarascio; Editing by Alastair Macdonald and Richard Lough)

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