Brussel wants more transparency on payment costs

Brussel wants more transparency on payment costs

Consumers and travelers in europe shall in the future be better informed about the costs of payments involving several eu countries.

The eu commission presented a proposal in brussel to eliminate hidden additional costs. EU member states and the european parliament still had to approve it. Consumer users, however, were already very enthusiastic.

Until now, customers traveling abroad in europe or making online purchases with card payments have often been able to choose between local currency and their home country. If they decide to pay locally – in poland, for example, in zloty – the bank converts the amount to be paid, and consumers find out a few days later from their account statement how much they ultimately paid.

However, if you choose your home currency – e.G. Euro – the payment service provider will immediately convert the amount and charge additional fees for it. This often makes payments in euros more expensive in non-euro countries.

"Currency conversion must be fully transparent when consumers pay with their bank card in a country where the currency is not the same as in their country of origin," EU finance commissioner valdis dombrovskis now demanded. The costs associated with the various options for maintenance had to be clearly understood. This should also apply to online payments.

Consumer users complain that the costs here have so far been opaque. According to estimates by the european consumer protection association beuc, customers pay more than a billion euros a year on top of the bill.

The EU commission also has another proposal for cheaper euro payments in europe. According to these guidelines, it should no longer make a difference whether a transfer is made between two euro states or outside the common currency area, dombrovskis explained.

At present, banks and credit companies sometimes charge high additional fees for euro payments in EU countries that have not adopted the common currency. 10-euro transfers from bulgaria to a euro country can cost up to 24 euros on top. In the uk it’s around 11 euros, in poland 1.90 euros.

In the future, the same price as for domestic payments in the local currency is to apply here outside the euro area as well – depending on the country, these are low or no additional costs at all. According to the EU commission, this did not impose any burdens on the banks, but only reduced their income. Companies and consumers could save around one billion euros a year.

The proposals have met with approval from consumer protection groups and the european parliament. "It is high time that the fog surrounding this practice is lifted," said beuc’s consumer users, referring to the currency conversions. "Customers prefer to pay in the currency they are used to, but are unaware that they are paying more in the process."

"This is good news for consumers in europe. The eu commission is thus curbing fee usury," said green european deputy sven giegold. "Especially on vacation trips, it is good that you can be sure of certain minimum standards with regard to the fees for withdrawing money," said CSU financial expert markus ferber.