The proposed Regulation dictates that charges for transactions in euros in the Internal Market should be the same across borders as within national boundaries. The Parliament voted in favour of the proposal at its 15 November plenary session in Strasbourg.

The Commmission is keen to fast-track the rule change so that it comes into effect in time for the conversion to euro notes and coins at the beginning of next year. It has been fiercely opposed by banking and industry lobby groups.

Internal Market Commissioner Frits Bolkestein comments: "Critics of the proposal are trying to head it off with last minute promises to cut the cost of cross-border transactions. But as the Commission has heard such promises for more than twelve years whilst the cost of cross-border transfers has remained the same, the credibility of these promises is doubtful."

The proposal would require:
* the charges for withdrawals from cash machines, use of bank cards, credit transfers and cheques to be the same, when denominated in euros, for both national and cross-border transactions;
* customers to be properly informed in advance of the charges they will incur when making cross-border payments. Any price changes would have to be notified in advance as well; and
* mandatory use of the ISO standard codes, namely IBAN (International Bank Account Number) and BIC (Bank Identifier Code), in order to allow banks to process credit transfers in a fully automated way.

A survey published by the Commission in September 2001 indicated that the average cost of cross-border credit charges remained virtually the same in 2001 as in 1993 (€24 for transfers of €100). The figures have been disputed by the European Banking Federation.