6. 5. 91 Official Journal of the European Communities No C 120/17 
Opinion on the discussion paper on making payments in the Internal Market 
(91/C 120/06) 
On 10 January 1991 the Commission decided to consult the Economic and Social Committee 
on the discussion papier on making payments in the Internal Market. 
The Section of Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the subject, adopted its Opinion on 12 March 1991. The 
Rapporteur was Mr Meyer-Horn. 
At its 285th plenary session (meeting of 20 March 1991), the Economic and Social Committee 
adopted the following Opinion by a unanimous vote. 
1. General comments 
1.1. The Economic and Social Committee welcomes 
the discussion paper on making payments in the Internal 
Market presented by the EC Commission (Doc. 
COM (90) 447 final of 26 September 1990). 
1.2. The Committee appreciates the efforts made by 
the Commission to analyze the extensive field covered 
by payments. This issue is of capital importance to 
the achievement of the European Single Market. The 
Committee supports the EC Commission's view that 
the further development of Europe's payments systems 
is an urgent need which should be met 'to the benefit 
of all of Europe's citizens' (point 84) in order to get 
closer to a Single Market in the field of payments. The 
justified concerns of payments systems' users (con­
sumers) need to be taken into account in this context. 
Consumers are not solely concerned about the time and 
costs involved in making international payments; they 
are also concerned, above all, about the question of 
legal security. 
1.3. An efficient and reliable payments system meet­
ing high quality standards is also of decisive importance 
to the successful implementation of the forthcoming 
Economic and Monetary Union, which will cement a 
market of European dimensions. All the different par­
ties concerned—private customers, business enterprises, 
public bodies and not just the system operators—must, 
each in their own way, help to improve the payments 
system. costs, time required for transactions, and the develop­
ment of technology in the field of payments. 
1.4.1. For the European Community, diversity of 
channels and methods of payment represents a feature 
on which to build, but at the same time constitutes a 
tremendous challenge because of the existence of a 
multitude of languages, cultures and, for the time being, 
currencies. Even though electronic transfers are at the 
forefront of the further developement of payments sys­
tems, users should continue to have a choice between 
the different instruments. In those States where such a 
choice does not yet exist, the range of payment instru­
ments available could be broadened. 
1.4.2. Payment instruments are tailored to varying 
user requirements, in particular as regard the degree of 
urgency and security required in respect of occasional or 
regular payments. To meet these differing requirements 
payment instruments differ in speed and cost, especially 
in the field of cross frontier payments. Even in the case 
of extensive, cohesive markets such as the USA—which 
is characterized by one currency as well as one langua­
ge—recent experience has shown that providing pay­
ment services which meet high standards of reliability 
and rapidity is a very expensive undertaking, the costs 
of which have to be met by the users of the system. 
1.5. In Europe the market has created a variety of 
solutions to meet payment needs. These various systems 
have encountered a steadly growing success, despite 
numerous administrative hindrances still existing in 
some Member States. 
1.4. For social, economic and historical reasons the 
various forms of payments have developed in different 
ways and to different extents in the Member States. 
The different payment instruments—cash, cheques and 
transfers (which can in turn be broken down into 
standing orders, direct debiting and card-controlled 
payments at automated teller machines)—have differ­
ent shares of the market in each country. This in turn 
explains the country-by-country differences as regards 1.5.1. Confidence should continue to be placed in 
the market as a driving force. The market has in the past 
produced solutions which alleviated may shortcomings 
caused by the coexistence of more and less readily 
usable currencies, as well as by the lack of progress 
in monetary cooperation between the Member States. 
Examples of such solutions are the Eurocheque agree­
ment and the use of VISA and Eurocard credit cards to 
No C 120/18 Official Journal of the European Communities 6. 5. 91 
obtain money from cash dispensers in several countries 
{cf. 2.2.2). 
1.5.2. The further development and improvement of 
payment services in Europe will be made much easier 
if governments and authorities establish the necessary 
preconditions for the implementation of Economic and 
Monetary Union. These preconditions include, in par­
ticular: the complete liberalization of cross-frontier 
money and capital transactions in the four EC Member 
States still claiming exemptions after 1 July 1990; the 
limitation or abolition of remaining notification 
requirements for credit institutions laid down in cur­
rency regulations; the incorporation of all EC currencies 
in the European Monetary System (EMS) exchange-
rate mechanism and the restriction of exchange-rate 
fluctuations to a 2,25 % band. It is incumbent upon the 
governments of the Member States to establish these 
preconditions. This is a task which cannot be left to 
market forces. 
1.6. Thanks to the completion of the Internal Mar­
ket, the introduction of free movement of capital and 
the approximation of the supervisory provisions relat­
ing to credit institutions, the European Community 
has a leading role to play in improving cross-border 
payment services. However, attention must be paid 
from the outset to requirements in respect of payments 
to and from the other non-EC States in Europe. Further 
developments in the area of payments should involve, 
in particular, the countries of the European Free Trade 
Association (EFTA) in order to enable citizens every­
where to benefit from a homogeneous level of service 
that a market of European dimensions can provide. 
Such a step would lend support to the endeavours to 
establish a European Economic Area (EEA) and poss­
ibly contribute to the successful outcome of the EEA 
negotiations currently underway. 
1.7. Moreover, cross-border payment services 
should, by their very nature, be incorporated in an 
international framework, going beyond the frontiers of 
the EC. 
1.7.1. A considerable volume of payments go to 
industrialized countries and trade partners outside 
Europe, particularly, for instance to the USA and Japan. 
The further development of the cross-frontier payment 
system in the EC must therefore be compatible with 
the structural requirements to be met a bridge linking 
it with international worldwide payment systems. 
1.7.2. As a consequence the existence of overlapping 
EC, European and worldwide structures would not help 
reduce the cost of 'non-Europe' in this field—one of the objectives of the payment services set out by the 
Commission in its discussion paper. The cost of pay­
ment services should, however, be borne by the user. 
2. Specific comments 
2.1. The discussion paper focuses on 'low value-
large volume' payments. In the interests of consumers, 
this area in particular should be developed. There are, 
however, also 'high value-low volume' payments. The 
Society for Worldwide Interbank Financial Telecom­
munication (SWIFT) has developed and electronic 
transmission system—used primarily by business 
undertakings—for these payments. These two types 
of payments have some common requirements, one 
particular requirement being reliability. The way these 
forms of payments develop should be compatible but 
not necessarily follow the same pattern. 
2.1.1. The improvement of payment systems in Euro­
pe, and in the Community in particular, must not 
merely involve the development of one payment system. 
It must address a variety of payment instruments and 
the user should be able to select the instrument best 
tailored to his needs. 
2.1.2. The Commission states in the discussion paper 
that cross-frontier payment systems could be improved 
by inter-linking the Automated Clearing Houses (ACH) 
{cf section A, paragraphs 15 to 18, and section C, 
paragraphs 51 to 55). Linking ACH offers a good 
chance of success. To establish these links it would be 
necessary to coordinate the different technologies and 
programming used. This should not, however, be the 
one and only solution, for the reasons set out in 2.1.1 
above. 
2.2. The further development of the various payment 
instruments should be coordinated in such a way as to 
meet the needs and expectations of the market and the 
parties involved. The idea of developing a single pan-
European payment would not be in line either with 
market trends or the general tendency towards less 
interventionist policies, and would impose uniformity 
on the payment services. These payment services have 
been developed to meet the needs of their respective 
6. 5. 91 Official Journal of the European Communities No C 120/19 
customers and markets by individual groups of credit 
institutions and even by individual credit institutions, 
working in competition with each other. 
2.2.1. The existence of only one payment system 
would put an end to the comparative advantages and 
disadvantages of individual credit institutions and 
groups of banks which stem from their organizational 
and customer structures (e.g. the density of their net­
work of branches; the number of correspondent banks 
and bases abroad; the concentration on bulk business, 
large multinationals or small and medium-sized enter­
prises; the number of cash dispensers; and the credit 
and charge cards issued). Market advantages are also 
gained from cooperation within the large European 
banking groups and from specific European initiatives 
in the field of payment transactions, such as those taken 
by savings banks within the framework of EUFISERV 
SC (access to 18 000 cash dispensers in 11 countries 
made available to 37 million cardholders and prep­
aration of a European-wide transfer system using the 
organization's own clearing houses and data-processing 
systems). The market advantages gained by customers 
of the one or the other system or credit institution 
would be largely swept away if a single system were to 
be introduced. A single, somewhat monolithic payment 
system would have to cater equally for all conceivable 
payment transactions throughout Europe, be they for 
small or large sums and occasional or regular payments. 
Such a system would therefore be larger than was 
necessary to meet the needs of a bulk payments system 
for consumers. The introduction of such a single system 
without any alternative would be like having a tourist 
traffic system based only on the use of aircraft and 
airport feeder services and excluding rail and road 
transport. The inevitable reduction in competition 
attendant upon such a development sould be carefully 
considered in the aim is to establish a Single Market 
characterized by a high level of competition. The con­
cept of a single payment system must also be examined 
from the point of view of compatibility with EC compe­
tition rules. 
2.2.2. The fullest possible competition combined 
with the necessary level of cooperation between com­
peting credit institutions should be the maxim underly­
ing every type of structure and every initiative aimed at 
improving financial services and, in particular, payment 
transactions in Europe. This is to be equated, the Com-
mitte thinks, with the right blend of competition and 
cooperation. No European-wide payments system is 
feasible without agreed cooperation between the credit institutions involved. The Eurocheque system provides 
a good example of how rival credit institutions are able 
to offer their customers a service throughout Europe, 
the very existence of which depends upon close cooper­
ation in the offering of counter services, the issuing of 
cheques and cheque cards, the provision of clearing 
facilities and the observance of common rules. The 
Eurocheque system serving consumers (8 000 credit 
institutions have issued 37 million Eurocheque guaran­
tee cards) has made it possible for the first time for 
cheques drawn on the credit institutions concerned to 
be used throughout Europe—thanks to the payment 
guarantee incorporated in the system—up to a ceiling 
laid down for each currency. The system is made poss­
ible through the use of a uniform clearing procedure. 
The costs of the joint clearing operations, borne by the 
participating credit institutions, make it necessary to 
have uniform Eurocheque charges (currently 1,6% of 
the value of the cheque). On the other hand, credit 
institutions have to bear differing burdens of work and 
costs—a considerable burden is placed on banks in 
Southern European holiday destinations, whilst cus­
tomers of banks in Northern Europe are the principal 
beneficiaries. In the derogation with it granted in 1984, 
in pursuance of Article 85(3) of the EEC Treaty, in 
respect of the Eurocheque agreement the EC Com­
mission made a distinction: the agreement on charges 
reached between credit institutions was regarded as 
an acceptable restriction of competition as it was a 
consequence of the system and the system benfitted the 
consumer, but there had to be competition between 
credit institutions as regards relations with customers. 
This means that every credit institution has the right 
to determine whether and to what extent it will pass 
on to its customers the uniform charges which it pays 
to the credit institution cashing its Eurocheques. 
2.2.3. In any consideration of the question of extend­
ing the Eurocheque system a distinction must be drawn 
between the requirements in respect of a) a common 
clearing procedure and b) guaranteed payment. The 
ceiling in respect of the guaranteed payment of cheques 
(currently standing at BEF 7 000, DKK 1 500, FRF 
1 400, DEM 400, GRD 30 000, IEP 140, ITL 300 000, 
LUF 7 000, NLG 300, PTE 30 000, ESP 25 000 and GBP 
100) has been determined in the light of the private use 
of Eurocheques, i.e. the risks to be borne by credit 
institutions for the majority of transactions and cus­
tomers involved in such cases. If the use of Eurocheques 
were to be extended to business undertakings, the set­
ting of a uniform—and possibly much higher—ceiling 
for payments would be out of the question because of 
the rapidly changing credit risks, which also differ from 
one undertaking to another. 
No C 120/20 Official Journal of the European Communities 6. 5. 91 
On the other hand, consideration should be given to 
extending the rapid and reliable clearing system to 
include Eurocheques for sums above the current ceiling. 
The inclusion of such cheques—for which payment 
would not be guaranteed—in the Eurocheque clearing 
system could be advantageous, in particular for small 
and medium-sized enterprises. Such an extension of the 
Eurocheque system must not, however, penalize the 
current private users of the system and, in particular 
must not therefore involve higher costs. 
The question of broadening access to the Eurocheque 
clearing system must therefore be carefully examined, 
taking account of consumer interests. The same applies 
to the possibility, considered in a study by the Inter­
national Chamber of Commerce in Paris, of simplifying 
the payment of standardized non-Eurocheques. 
2.2.4. The Committee welcomes the consideration 
being given by the ECU Banking Association, in con­
junction with SWIFT, and the bank for International 
Settlements, to extending the ECU-clearing system, par­
ticularly in respect of ECU cheques and in the light of 
the expected increase in payment transactions in ECU 
(Doc. COM(90) 447 final, Article 9, points 15 and 17). 
2.3. As seen by the users and providers of payment 
services, the question of the balance between compe­
tition and cooperation has a direct impact on their 
mutual objective, namely the provision of rapid and 
reliable payment services at advantageous prices. 
2.3.1. If all the different ways of making payments 
are developed into a single European-wide system this 
may eventually lead to the establishment of a single, 
standard procedure for transacting payments. How­
ever, the subscription to a foreign magazine and the 
payment of a deposit on a holiday at a foreign hotel 
do not have to meet the same requirements in terms of 
rapidity, reliability and security and do not have to be 
equally cost effective. 
2.3.2. The pricing of payment services can be tailored 
to the differing requirements as regards rapidity, 
reliability and security in such a way that it would meet 
the expectations of the discussion paper. 
2.3.3. What is meant by reasonable pricing can be 
assessed only to a certain point in relation to domestic 
payment services existing hitherto within Member 
States. More often than not, the apparent reasonable 
level of domestic pricing was only made possible because of 'combined costing'. Under this combined 
costing the relatively higher costs of making payments 
were offset by relatively higher revenue from other 
fields. One example of such combined costing, which 
also involved non-financial services, was the operation, 
in a number of Member States of post-office banks, 
postal savings banks, and national giro banks before 
the separation of the various postal services. Differing 
national rates of interest on deposit accounts and, in 
particular, on sight deposits—a very costly operation 
in some cases for credit institutions, which in Italy, for 
example, pay out 8%—is a scenario which does not 
readily tie in with the Single Market, which was already 
depicted in the White Paper as an area in which the 
various operators compete healthily. 
2.3.4. Recent experience in the USA—a consolidated 
and integrated market using one language and one 
currency—demonstrates that there is a direct corre­
lation between the efficiency of payment services and 
adequate and even substantial user pricing. 
2.3.5. Cross-frontier payments in Europe have hith­
erto frequently been complicated by administrative 
restrictions and impediments which entail a corre­
sponding personnel outlay . These formalities and the 
statistical data to be passed on to the central banks 
have, therefore, made such payments within the EC 
more expensive than domestic payments. The total 
liberalization of financial transactions and capital 
movements, to which the Member States have commit­
ted themselves, will contribute to the improvement of 
cross-frontier payment services. 
2.4. Since payments represent, to a certain extent, 
the wheels of the economy, the feasibility studies envis­
aged by the discussion paper must firstly assess the 
direct impact each proposal would have. 
2.4.1. A more thorough investigation in this field 
would clearly be bound to identify the direct conse­
quences in terms of levels of investment, the work 
involved, cost effectiveness, financing, employment and 
economic and monetary policies. 
2.4.2. Changes to the system of making payments 
would also affect other related areas which are part of 
everyday financial business. Take, for example, corre­
spondent banking, which operates in virtually all areas 
of business (domestic and external payments and credit 
6. 5. 91 Official Journal of the European Communities No C 120/21 
business) and is indeed a characteristic feature of bank­
ing overall (Doc. COM(90) 447 final, section A, 19). 
2.5. The Committee believes that, in the context 
of the further development of payment services in a 
European-wide market, the efforts of the various parties 
involved must continue to be encouraged. 
2.5.1. The financial industry should encourage the 
wide range of market initiatives aimed at improving 
payment services in a healthy competitive environment. 
Joint efforts in this area should aim at increasing the 
stability, integrity, security and reliability of the pay­
ment systems, using the appropriate technological 
developments available to the industry. 
2.5.2. The central banks and the bank supervisory 
authorities can play an important role in the develop­
ment of payment systems, inter alia in connection with 
their responsibilities under EC regulatory provisions. 
As soon as it is established at the beginning of the 
second stage of European economic and monetary inte­
gration, the European Central Bank may also assume 
responsibilities with regard to the further development 
of payment systems. 
2.6. Progress towards more efficient payment ser­
vices should not lead to the establishment of a two-
speed Europe which would risk limiting the very objec­
tives and scale that a European-wide market in the field 
of payment services should achieve. As a matter of 
principle all the parties involved should be in a position 
to participate in, and benefit from, the improvement of 
the payment services, though in reality this opportunity 
will of course be exploited initially by a group of 
'pioneers' who could, however, help the late-comers to 
catch up. 
2.7. Progress towards more efficient payment ser­
vices could be made on several fronts. 
2.7.1. The necessary improvement of the European 
telecommunications infrastructure must be encouraged 
and pursued. This would pave the way for the creation 
of broad, multi-user financial highways (see the Com­
mission's communication to the Council on the Trans-
European Networks; Doc. COM(90) 585 final). Due 
consideration must be given in this context to the 
significant increase in data transfers expected as a result 
of the extension of payment services. 2.7.2. Parallel effort should be made in the area of 
standardization with a view to creating the necessary 
conditions for increasing the use of Electronic Data 
Interchange (EDI). A particularly important factor in 
this context would be the development of a uniform 
international bank identifier code system. 
2.7.3. There is a need for greater transparency as 
regards the conditions under which cross-border pay­
ments are made. The involvement of all the different 
actors concerned should ensure that the various Com­
mission Recommendations are systematically applied. 
The main Commission Recommendations are: 
— 90/109/EEC of 14 February 1990 on the trans­
parency of transfer charges, 
— 88/590/EEC of 17 November 1988 on legal security 
in the use of payment cards. 
The three European associations of credit institutions, 
namely: 
— the Banking Federation of the EEC, 
— the European Savings Banks Group, and 
— the Association of Cooperative Banks of the EC, 
have discussed the Commission's Recommendation on 
payment systems amongst themselves and with con­
sumer organizations and the Commission itself. These 
discussions led to the establishment on 14 November 
1990 of the code of best practice of the European 
banking industry on card-based payment systems. This 
code takes into account several objectives, namely: 
— consumer protection in the EC in this field, 
— competition between the providers of services, 
— the provision of a choice of cards with different 
features for the benefit of the consumer. 
All credit institutions adhering to the code of best 
practice could make this fact known to their customers 
in an appropriate way (e.g. through the use of a sign). 
2.7.4. Users of cross-frontier payment systems are 
not solely concerned about the cost of making payments 
and the time taken; they are also concerned about legal 
certainty and, in particular, the clarification of liability 
issues. Consumers must have legal certainty, particu­
larly in the case of the theft, loss or misuse of credit 
and charge cards and in the case of misdirected or non-
executed payment orders. To cover damage suffered by 
customers following, for example, the non-observance 
of payment transaction times, comparable legal pro­
visions should be sought in the field of cross-frontier 
payments. 
No C 120/22 Official Journal of the European Communities 6. 5. 91 
At national level, associations of credit institutions in 
eight States have, according to the Commission, estab­
lished complaints bodies and/or arbitration bodies to 
deal with disputes in, inter alia, the field payments. 
Such bodies exist in Belgium, where the bank federation 
has introduced an ombudsman and the association of 
savings banks has established a settlement and advisory 
committee (RBK/CRC). These bodies offer advice and 
provide consumers with a rapid, inexpensive and non-
bureaucratic procedure for reaching a decision or a 
settlement, without this excluding the possibility of 
recourse to the courts. Without waiting for the develop­
ment of European payment systems, the EC Com­
mission should encourage all Member States to intro­
duce similar arbitration and advisory bodies. The field 
of responsibility of these bodies should also cover inter­
national payments made by all users. Finally, the Com­
mission should consider the feasibility of establishing a 
form of complaints or arbitration body or an ombuds­
man at EC level, too, with responsibility for all inter­
national payments. 
2.7.5. Efforts should also be made to acquaint users 
systematically with the particular features and costs of 
the various individual types of payment so that they 
could choose the one which was most advantageous 
and best met their needs. Such consumer guidance 
would require a corresponding commitment on the part 
of all the actors concerned—private and public bodies, 
financial industry, private users, governments, central 
banks and, last but not least, consumer associations 
and their advice centres. A welcome contribution which 
could be made be credit institutions would be the 
provision of leaflets providing customers with infor­
mation on the particular features, costs and transaction 
times of the various cross-frontier payment methods. 
2.7.6. With referrence to the question of customer 
guidance raised in 2.7.5 above, the advisory committee 
proposed by the EC Commission should consider the 
justified concern of consumers that the costs and terms 
of different modes of payment should be transparent. 
References to timetables which are respected in all but 
Done at Brussels, 20 March 1991. 'exceptional circumstances' and to 'reasonable' costs 
(point 8 of Doc. COM (90) 447) are unsatisfactory for 
consumers. If banks were to provide their customers 
with scales of charges for different modes of payment, 
amounts, countries of destination, etc. and indicate the 
time usually required to transact payments, this would 
constitute a decisive step forwards towards the achieve­
ment of transparency. Credit institutions usually alre­
ady give a breakdown in invoices or bank statements 
of cross-frontier cheque and transfer costs, both for the 
payers and the payees. 
2.8. The Committee endorses the establishment of 
the coordinating group proposed in the discussion pap­
er. In view of the purely advisory role of this coordinat­
ing group no problems are raised in the field of Commit­
tee procedures. Such a body would provide a useful 
forum for the exchange of information and experience, 
for receiving background information and seeking sup­
port from all involved in the development of payment 
services. Consumer organizations in particular, should 
be able to express their views and their concerns in 
such a forum. If the Commission could provide partici­
pants at coordinating group meetings with statistics on 
the various areas of cross-frontier payments, this would 
be a welcome initiative. 
2.8.1. It would be advisable to set up two working 
parties to conduct deliberations 
— one in which representatives of consumers and per­
haps also of wholesale trade, external trade, the 
tourist and hotel industries, etc., could meet experts 
from credit institutions, and 
— another in which the operators of payment systems 
could examine technical possibilities, including the 
possibilities with regard to standardization. 
2.8.2. Further action in this area should be left to a 
smaller working party, comprising persons who, by 
virtue of their professional experience and position, 
have the requisite knowledge and authority to ensure 
that payment services operate effectively, with particu­
lar regard to the financial integrity of the overall system. 
The Chairman 
of the Economic and Social Committee 
Fran?ois STAEDELIN