The introduction of European Union (EU) rules governing cross-border euro payments in 2001 has led to a dramatic fall in costs for consumers and prompted banks to invest in EU-wide payments intfrastructure, according to a European Commission study.
The study found that the cost of making cross-border euro payments has fallen by 90% since the rules were implemented six years ago, while costs for domestic transfers have remained static.
The rules stipulated that the cost of cross-border payments within the EU should be the same as for domestic transfers.
Before the regulations were introduced a EUR100 cross-border transfer would have cost the consumer an average EUR24. But today the same transfer will incur a fee of just EUR2.50.
The obligation to apply the same charges to national and cross-border payments has prompted the banking industry to develop an EU-wide infrastructure in order to cut the costs for cross-border payments, says the study. This represents an important step towards creating a Single Euro Payment Area (Sepa).
Internal market and services commissioner, Charlie McCreevy, says the price of cross-border payments has reduced dramatically and - contrary to what had been feared - the price of domestic payments has not gone up.
"The banks' reaction has been very positive – they have set up an ambitious project to create a Single Euro Payments Area (Sepa) that will treat all euro payments as though they were domestic," says McCreevy. "By using fully automated payment systems that are of lower cost, this project has enormous potential to bring about huge savings and we fully support it."
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