Communication from the Commission to the Council and the European Parliament - Retail payments in the internal market
Date: 2000-01-31
Institutions: European Commission
Subjects: credit transfer, electronic money, harmonisation of standards, intra-EU payment, single market

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 31.01.2000
COM(2000) 36 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

RETAIL PAYMENTS IN THE INTERNAL MARKET

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

RETAIL PAYMENTS IN THE INTERNAL MARKET

EXECUTIVE SUMMARY

The European Union has an internal market and the euro. It does not yet have a "single
payments area". Large value (wholesale) payments can now be made across borders nearly as
quickly and cheaply as they can domestically, yet small value (retail) cross-border payments
are less reliable, usually take longer and cost significantly more than domestic payments.
There needs to be a significant improvement in the efficiency of small value cross-border
payments, and substantial reductions in cross-border charges to customers, by 1 January 2002.

This Communication urges the need for efficient, secure and inexpensive retail payment
services in the internal market accompanied by the introduction of the Euro. The Commission
acknowledges that retail payment services and the conditions governing them are important in
assuring consumer confidence in e-commerce. Some issues addressed in this Communication
are relevant in that context. However, the role of payment services for the development of e-
commerce is not covered by this Communication but will be dealt with separately.

The main focus needs to be on small value credit transfers. The implementation of the Cross-
Border Credit Transfers Directive is a major first step. Common technical standards will also
help and banks should commit themselves fully to implement the existing standards on
instructions by 1 January 2002. The
international account numbering and payment
Commission will also propose the introduction of a common minimum exemption threshold
for balance of payments statistics, below which cross-border payments need not be reported,
to take effect no later than 1 January 2002.

But an improvement in the efficiency of cross-border retail credit transfers ultimately depends
on establishing efficient cross-border transfer linkages. Banks or groups of banks are invited
to put forward proposals by the end of September 2000. The Commission will examine them,
in co-operation with the ESCB, and will hold a Round Table in the autumn of 2000 to
consider the various options. The Commission may also reconsider to reduce further the
maximum execution time for cross-border transfers to bring it more into line with domestic
transfers.

The difference between the charges for the cross-border and domestic use of payments cards
is much less marked than for credit transfers. But banks are strongly encouraged to phase out
the differences that remain. Banks also need to improve the information that they give to
customers on general conditions,
fees, charges and (non euro) exchange rates. The
Commission intends to issue a competition notice outlining the scope for, and limits to, co-
operation among banks on payment cards. Banks are also strongly encouraged to ensure
interoperability for electronic means of payment, and in particular that electronic purses can
be used across borders by 1 January 2002.

The difference between the charges for the cross-border use of cheques as opposed to
domestic transactions is more marked than those for any other payment instrument. Banks are
urged to consider how to meet the needs of the public for the type of cross-border distance
payment facility currently met by the eurocheque system.

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The Commission continues to be concerned about the level of charges levied on the exchange
of euro area national banknotes across borders, and has asked banks and bureaux de change
to publicly display information about the level of their charges. The Commission repeats its
call to banks to re-examine their charges, particularly for small value transactions. To
encourage a positive response, the Commission intends to highlight instances of excessive
charging. It will also pursue its investigation into possible anti-competitive practices.

A new Communication on fraud prevention is under preparation. The Commission will
industry’s efforts to achieve a secure environment, and the
monitor
Communication will also focus on other preventive actions, notably the exchange of
information, training programmes and educational material.

the payment

3

INTRODUCTION

The European Union has an internal market and the euro. It does not yet have a "single
payments area". Large value (wholesale) payments can now be made across borders nearly as
quickly and cheaply as they can domestically, yet small value (retail) cross-border payments
are less reliable, usually take longer and cost significantly more than domestic payments.

The Framework for Financial Markets Action Plan1, endorsed by the Council and the
European Parliament, calls for integrated retail payment systems that provide for secure and
competitive small-value cross-border transfers comparable with the service provided within
domestic payments systems. In this context the Commission builds largely on a market-led
approach requiring voluntary co-operation by the banking sector and investments which
should become a business case in the long run. These should be put in place before the end of
the euro transitional period (i.e. by the beginning of 2002).

The Commission objectives are shared by the European Central Bank in its statement2.
focuses on cross-border credit
Nevertheless, while the ECB statement
this
Communication deals with this essential
issue and considers other electronic means of
payments, cheques and cash as well. It addressed also the problems in the wider context of the
European Union rather than in the euro-zone only and discusses other policy issues as
competition, fraud prevention and the enlargement. The Commission believes that, together
with the ESCB, the other EU institutions and the private sector, a concerted effort is necessary
to achieve the objectives set in the Action Plan. This Communication maps out a strategy to
meet them with a series of identified actions to be undertaken by various (private and public)
actors concerned.

transfers,

1.

OBJECTIVES

There needs to be a significant improvement in the efficiency of small value cross-border
payments, and substantial reductions in cross-border charges to customers, by 1 January 2002.
This requires a market-based approach which can achieve early results. Public authorities
should complement it by tackling administrative obstacles and ensuring the reliability and
security of the systems. There should be seven objectives3:

1.

2.

1

2

3

The efficiency and cost-effectiveness of payments, notably credit transfers, must be
improved. Ameliorating the basic infrastructure for credit transfers may also be of
central importance in improving other areas such as direct and other debit transfer
based payments.

The charges for cross-border credit transfers should be cut substantially towards the
levels charged for equivalent domestic credit transfers.

Implementing the Framework for Financial Markets: Action Plan.”

“Financial Services:
COM(1999)232, 11.05.99.
The ECB issued a statement on 13.9.1999: “Improving cross-border retail payment services in the euro
area: the Eurosystem’s view”
The objectives are identical with those in the ECB statement resulting from a close co-operation of both
institutions.

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3.

4.

5.

6.

7.

Settlement times for cross-border payments should, where possible, not exceed the
time taken for domestic payments. The end-to-end execution of a cross-border
payment should not exceed the time taken for a domestic payment by more than one
day.

The fees for a cross-border transfer in a system should normally be borne entirely by
the originator and not charged to the beneficiary, in line with domestic practice in
most EU credit transfer systems.

There should be no proliferation of standards. Existing standards should be
implemented as soon as possible.

Cross-border payment systems should have open access.

These improvements
1 January 2002.

leading to efficient

systems

should be in place by

It is important that these objectives are also met in view of the enlargement of the EU. A
modern retail payment infrastructure would provide a model for accession countries.

2.

CREDIT TRANSFERS

€

Credit transfers are used to transfer funds from the account of a sender to the account of a
beneficiary. Charges for cross-border retail credit
transfers are still several orders of
magnitude greater than corresponding charges for domestic transfers. Although charges for
cross-border transfers have tended to decline over the past five years, typical charges4 for a
12, although in some instances
very low value transfer of
20 (exceptionally they can exceed that amount). The
they may be as low as
1 in all Member
charge for a comparable domestic retail transfer is considerably less than
States, being usually measured in cents. While charges for domestic transfers are made on a
transaction basis,
irrespective of the value transferred, cross-border transfer charges are
commonly based on a percentage of the value or a combination of flat fees and value based
fees.

100 are currently of the order of

5 or as high as

€

€

€

€

The cost and performance of cross-border credit
transfers has been a concern for the
Commission since many years. Already in 1990, the Commission gave an in-depth analysis of
the problem in 1990 (COM(90)447 – “Payments in the European Single Market”)
emphasising that in the 90s structures were established to ensure payment services between
Member States which are as inexpensive, quick and reliable as domestic systems. In 1992, the
Commission established a work programme (SEC(92)621 – “Easier cross-border payments:
breaking down the barriers”), indicating that there was a need to improve retail cross-border
payment services before the completion of the EMU. In 1994, COM(94)436 – “Fund transfers
in the EU:
transparency, performance and stability” was published which included the
proposal for a Directive on cross-border credit transfers. The latter was adopted in 1997.

4

Estimates based on partial and provisional data provided by some of the EU banking associations
together with results of complaints received by the Commission during the first months of 1999.

5

In order to meet the Commission’s long-standing objective, four target actions have been
implementation of the Cross-Border Credit Transfers Directive (97/5/EC)5,
identified:
technical standards, reporting and, above all, the payment systems infrastructure.

Implementation of the Cross-Border Credit Transfers Directive

The date of implementation of the Cross-Border Credit Transfers Directive, which covers
transfers up to

50,000, is 14 August 1999. It provides that:

€

• a customer be given, in advance, a tariff that s/he can understand clearly for any type of

credit transfer;

• a transfer should be credited to the beneficiary’s account within a clearly defined

timescale;

• transfers for which the originator pays all the costs ("OUR" mode) will be the rule, unless
otherwise stipulated. An intermediary or receiving bank may not make any further charges,
in particular not to the beneficiary; and

• when a transfer goes astray, a “money-back” guarantee up to

€

12,500 is provided.

The implementation of the Cross-Border Credit Transfers Directive will help to improve the
efficiency of retail transfers. The implementation of the "OUR" mode, coupled with the
to establish more systematic
it necessary for banks
money-back-guarantee, makes
arrangements
transparency
for
provisions require banks to improve their processing of transfers so that they effectively fulfil
the conditions offered to customers, and will stimulate competition by allowing comparisons
increased
timing and other conditions. Customers should take advantage of
of fees,
transparency by comparing conditions of various banks in order to get the best possible deal.

sending retail cross-border

transfers. The Directive’s

Action point:

The Directive must now be implemented in all Member States, correctly transposed and
complied with by all banks. Banks must inform customers in advance of the charges, the
timescale and all other relevant conditions. Immediate improvements in the organisation of
retail cross-border transfer procedures by many banks are the operational consequence. The
Commission will monitor progress.

Technical standards

Technical standards need to be implemented in order to create better conditions for a single
retail payments area. This is especially true for bank identifiers and account numbering
systems, where it is extremely difficult to route a payment order directly and automatically
from the originator’s bank in one country to the beneficiary’s institution in another. Standards
have already been developed by the European Committee for Banking Standards (ECBS), of
particular importance in this context are the IBAN (International Bank Account Number)6 and

5

6

OJ L 43, 14.2.1997, p. 25.
The IBAN invites banks to add a country code and two control digits to existing numbers. This code
helps banks to route cross-border transactions automatically.

6

IPI (International Payment Instruction)7. They need to be implemented as soon as possible by
all parties involved.

Action point:

Banks should commit themselves fully to implement IBAN and IPI as early as possible and
by 1 January 2002 at the latest and should therefore agree a timetable for doing so at national
and EU level. Bank customers should be informed about the speed and cost advantages of
such standards. They should be encouraged to use them immediately after their introduction.
The national central banks, through the ESCB, could play a coordinating role both in speeding
up decisions on standards and by encouraging banks to implement them.

Reporting requirements

Banks are required for balance of payment statistics purposes to report cross-border transfers
in both the incoming and outgoing Member States. These reporting requirements involve
additional work in processing transfers, thereby increasing the cost and processing time.
Reporting requirements and statistical methods vary from one Member State to another.
Efforts to review and harmonise the methods of compiling balance of payments statistics have
been under way for a very long time.8 The reporting of cross-border transfers needs to be
streamlined in order to render the process easier and less costly for the banks and, ultimately,
customers. It is politically unacceptable to leave the implementation of streamlined reporting
requirements beyond 2002.

Action point:

The Commission, together with the ECB and other competent authorities, will continue to
work towards reaching agreement on the approach to be followed for streamlining reporting
requirements and on a timetable for implementation. Pending a definitive reform of statistical
reporting, the Commission will propose the introduction, at latest by 1 January 2002, of a
common minimum exemption threshold of an appropriate high fixed amount, below which
cross-border payments need not be reported for balance of payments statistics.

Developing the payment infrastructure

Even when all these improvements are fully implemented, they will not on their own be
sufficient to achieve the objectives set out in this Communication. The principal reason why
cross-border retail
than domestic retail
transfers are more expensive and less efficient
the development of cross-border payment channels has lagged behind
transfers is that
domestic development of electronic transfer systems. While retail credit transfers within
Member States have become automated and more efficient, manual intervention is still
required at nearly every stage in the banks’ internal processing of cross-border transfers. In
addition, comprehensive automated linkages between domestic systems or cross-border
systems are currently lacking.

7

8

The IPI is a standard form for transfer orders. It would help to expand the practical usage of the IBAN.
Currently some Member States have exemption thresholds, below which reporting is not required, while
there are no settlement based reporting requirements in the UK, Finland and Ireland (their data is based
on sample surveys).
settlement-based reporting systems apply
simplification thresholds.

In the other Member States,

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Lower charges by individual banks to their
retail customers largely depend on an
improvement in the efficiency of cross-border retail credit transfers. This would require the
enhancement of both banks’ internal processes and development of more efficient cross-
border transfer linkages. The internal process could be improved by developing straight-
through-processing (STP) capable internal systems and implementing STP-capable message
formats, such as SWIFT’s MT102/103. The main options for enhancing the efficiency of the
cross-border linkages fall broadly into two categories: overarching solution; and combined
network solutions.

The Financial Services Action Plan already states in this context
that remedying the
infrastructural gaps requires a concerted strategy, supported at the highest political level and
including the EU institutions, the ECBS and the private sector to surmount the technical and
commercial hurdles. A concerted effort should be launched to deliver a technically secure and
operational solution as a matter of utmost urgency.

Overarching solutions

Overarching solutions are those which would connect the vast majority of all payment
systems participants, across borders. These are solutions which link national systems to which
all or most banks belong, or alternatively which set up a new EU-wide cross-border clearing
system for transfers, in which most EU banks would participate.

The TARGET9 system of the ESCB delivers, with complete finality across borders payments
in a matter of minutes from sending bank to beneficiary bank. TARGET can be used for
payments of all values but as it is designed to process primarily large value payments, it may
not provide an adequate solution for the processing of cross-border retail payments. This
would be the case because i) for the banks, the direct and indirect cost of real-time, non-batch
processing may be too high to provide an economical solution for the processing of retail
payments, and ii) the potential number of such payments could be higher than the capacity of
TARGET. However, TARGET it could play a complementary role as a settlement channel for
retail transfers (e.g. for urgent payments)

Automated Clearing Houses (ACHs) are bodies through which automated payments are
directed, cleared and settled domestically in most Member States. The efficiency of cross-
border transfers could be considerably improved, either by linkages between ACHs at EU
level or by a new and separate European ACH. Such ACH-based solutions would have to be
driven mainly by the EU banking industry, with support from public authorities, e.g. on
standards, legal and reporting requirements.

Combined network solutions

Combined network solutions, although less universal than such overarching solutions as
TARGET or EU ACHs, might also offer promising solutions in view of the experience which
the industry has already gained with regard to some existing schemes based on cross-border
co-operation. Combined network solutions might also be a preliminary step towards the
ultimate provision of an overarching solution. Among the possibilities are the following:

The Euro 1 system of the Euro Banking Association (EBA) currently processes medium to
large value credit transfers in euro. The EBA is proposing to proceed in two stages:

9

Trans-European Automated Real-time Gross settlement Express Transfer system.

8

• The first stage is to expand the existing Euro 1 system to euro retail payments. The EBA

considers that this stage could be implemented quickly.

• The second stage may create an ACH.

The international credit card systems (i.e. VISA, Mastercard, Eurocard) have the advantage
of having been specifically designed for end to end processing over the complete payment
cycle and of internationally uniform technical standards which they used from the outset.
These payment cards have a unique identification system recognisable and functional in every
jurisdiction without adaptations. If this efficient infrastructure were adapted to carrying credit
transfers then anyone who has an international payment card could receive or send funds to
any other cardholder. Substantial modifications in operating procedures would be required to
achieve this, but the basic networks exist.

Several groups of banks (eg Eurogiro, TIPANET, Unico, S-Interpay), have already in recent
years made the move from “traditional” to “enhanced” correspondent banking by entering
into more systematic cross-border transfer arrangements. While the overarching solutions
addressed earlier would give access to cross-border clearing possibilities to all credit
institutions within the Community,
initiatives which are limited to certain groups of
institutions may also be useful if they work efficiently and at low cost for the customer.
Automation of the payment means and infrastructure should, however, be combined with
efficient linkages (gateways) to other networks.

Action points:

Banks are invited to put forward specific proposals to the Commission and the ECB no later
than end September 2000 for improving the efficiency of cross-border retail transfers, to
achieve the objectives of this Communication and, in particular, in such a way as to permit
significant reductions in charges to customers by the end of the transitional period (1 January
2002).

The Commission, in co-operation with the ESCB, will consider whether the banks’ proposals
for improving the efficiency of cross-border retail transfers meet
the objectives of this
Communication.

The Commission will promote a wide debate and will hold a Round Table in the autumn of
2000 to consider various options set out in this Communication or proposed in the meantime
by industry.

The Commission may reconsider in the Cross-Border Credit Transfer Directive the maximum
execution time for cross-border credit/debit transfers (which by default is now 5+1 days) to
bring it more in line with domestic transfers.

The Commission will evaluate on a regular basis the level of charges for cross-border
transfers and the implementation of standards, and publish the findings in the Single Market
Scoreboard.

3.

OTHER ELECTRONIC MEANS OF PAYMENT

Apart from credit transfers, electronic means of payment embrace a variety of instruments,
including those involving a plastic card and a magnetic stripe and/or a micro-processor chip.

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Differences in charges between cross-border and domestic use of payment cards are much less
marked than for credit transfers (eg the extra price payable by a credit cardholder for cross-
border use is often of the order of 2%). The Commission welcomes certain banks’ decision
not to make a specific charge for cross-border credit card use.

Domestically, direct debiting is a convenient and increasingly used means of making
recurrent payments (eg subscriptions, policy premiums etc.), but the payer needs to trust that
his/her account will not be debited incorrectly by the party which is to receive the payment.
This guarantee is harder to provide for cross-border payments. Direct debiting requires the
same basic infrastructure as credit transfers, so it may be possible to combine work on these
systems and instruments. There may also be legal issues to resolve.

Electronic purses are being intensively developed in some Member States. However, in the
absence of common technical standards and systems agreements an electronic purse is of less
practical use for cross-border payments than a foreign banknote (which can be exchanged into
tender). The recent Common Electronic Purse Specifications (CEPS) may be a
legal
promising way to develop common standards.

The proposed Directive on e-money providers10 will clarify the prudential rules under which
licensed institutions can provide e-money services and thus will provide the necessary legal
framework for these activities both domestically and cross-border. The Commission invites
the Council and the Parliament to ensure its rapid adoption.

Three elements are key to achieving the objective of a single payment area for all electronic
means of payment:- a high degree of transparency, a new approach to competition policy and
enhanced interoperability.

Transparency - implementing Recommendation 97/489/EC

The Commission's Recommendation of 1997 on electronic payment instruments11 introduces
increased transparency of payment card conditions and of transaction prices. It also contains
rules to determine the mutual responsibilities of issuers and holders of electronic means of
payment. The implementation of the Recommendation may be uneven: a study will be
launched to check compliance.

Competition policy

Transactions carried out by means of payment cards often require co-operation between
banks. This is especially the case where an issuing bank provides its customers with the
instrument and settles transactions on their accounts while an “acquiring bank” processes card
payment transactions, typically from retailers receiving such payments. Arrangements of this
kind have to comply with the competition rules enshrined in the EC Treaty and in secondary
legislation. The Commission is currently reviewing various competition issues, both price
issues and non-price issues, in the context of some notified national and international payment
card schemes. When these cases are completed the Commission will be able to issue a general
notice on competition in the field of payment cards.

10

11

COM(1998) 461 final, “Proposal for a European Parliament and Council Directive on the taking up, the
pursuit and the prudential supervision of the business of electronic money institutions”.
OJ L 208, 2.8.1997, p. 52.

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Achieving interoperability

Cross-border interoperability should be the general the rule for all functions provided through
existing electronic means of payments including payment cards. Interoperability of electronic
purses across borders is essential to allow for the development of this new instrument and
technology.

Action points:

Following the introduction of the euro, banks and other providers of payment means are
strongly encouraged to review the functioning of the existing electronic means of payment to
ensure cross-border interoperability for all functions provided through such instruments. They
should also examine possible synergies with the developments in the transfer infrastructure.

Banks and industry suppliers are strongly encouraged to ensure- in particular through
implementing common standards and developing open and interoperable cross-border
clearing and settlement - that electronic purses can be used across borders as soon as possible,
and no later than 1 January 2002.

The Commission will issue a competition notice to outline in general terms the possibilities
and limits of co-operation in the area of payment cards.

Banks are strongly encouraged to phase out remaining discrimination in fees between cross-
border card use and domestic card use. The Commission will monitor these developments.

Banks should improve the information given to customers with respect to general conditions,
fees, charges and (for non euro currencies) exchange rates. If serious problems emerge with
the implementation of Recommendation 97/489/EC,
the Commission will propose
transforming it into a binding instrument.

4.

CHEQUES

Cheques are the oldest form of “book money” instrument in use today. Their use varies
greatly between Member States ( 30% of all retail payments in the UK and 46% in France,
against only 5 to 10 % in Germany and Belgium). However,
in all countries, cheques
represent a paper based payments technology, which banks aim to phase out, or at least scale
down, as soon as practicable.

The difference in charges between domestic and cross-border use in the case of cheques is
more marked than for any other payment instrument. Charges for the cross-border collection
of a domestic cheque can be as high as 40 euro, even for a low value cheque. The eurocheque
system establishes charges for clearing which are substantially lower than those for cross-
border use of domestic cheques. If the eurocheque system is to be severely curtailed in 2001
(its guarantee function may no longer be available)12, then a replacement instrument is likely
to be needed.

12

The Commission considers that the benefits of the existing eurocheque system,
standardised cheque format and its clearing facilities in all European countries should not be lost.

in particular its

11

Action point:

Banks are urged to consider how to meet the needs of the public for the type of cross-border
distance payment facility currently met by the eurocheque system. The Commission will
monitor and assess the extend to which public’s need for an alternative to the eurocheque
system is being met. Should significant problems be encountered, the Commission will make
proposals to address this issue.

5.

CASH

The charges levied for the exchange of euro area national banknotes are currently strongly
criticised by citizens in the whole of the EU. Until recently, charges have (wholly or partially)
been hidden in the exchange rate spread between bank buying and selling rates. Since the
introduction of the euro, banks have been obliged to use a single fixed conversion rate when
converting between participating currencies, and thus to identify, clearly and separately, all
charges. The problem in the euro area will disappear from 1 January 2002, when national
banknotes will be replaced by euro banknotes. But in the meantime, the public perception is
that charges have increased, when the removal of exchange risk should have reduced them.
Complaints are notably frequent when low amounts are exchanged, since the relative effect of
a flat fee is proportionately greater for lower amounts.

The Commission has already addressed to banks the concerns of citizens about the level of
charges levied for banknote exchange, in addition to other cross-border transactions. It has
called on them to provide public information showing the changes in the level of charges
following the introduction of the euro. While information provided by banks tends to show a
general decrease in the level of charges consistent with the removal of exchange rate risk, the
level of charges for very small transactions has not decreased and has, in many instances,
increased. Before exchanging currencies customers should of course inform themselves of the
charges which will be applied. But the Commission repeats its call to banks to re-examine
their charging structures, particularly for small value transactions. Failure by banks to heed
such calls may adversely affect the acceptance of the euro by the public, and the Commission
will combat abuses which it discovers.

The Commission has begun an investigation to determine whether banks and banking
associations may have acted in collusion to fix either the form of charges (flat fee, percentage
etc.) or their amount, for euro area currency conversion charges.

Action points:

Banks are strongly urged to re-examine their charging structures and pursue a transparent,
customer friendly, pricing policy, with particular attention to the charges for small value
transactions.

To encourage a positive response, the Commission intends to highlight instances of excessive
charging, and to pursue its investigation into possible anti competitive practices

6.

ACTION AGAINST FRAUD

Work on fraud prevention at EU level is currently focused largely on payment cards. On
average, the incidence of card fraud is some 50% higher for cross-border card transactions

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€

€

440 million out of a total volume of

than for domestic transactions. Overall card fraud losses in the EU in 1998 were
1,100 billion. Reducing such cross-
approximately
border fraud costs should permit cross-border card costs and fees to fall somewhat (although
the overall part in costs represented by such fraud should not be overestimated). In 1998 the
Commission issued a Communication which provides an initial assessment of these problems.
It was the first step to create a secure environment for payment instruments. One further
action is already under way: a legislative proposal aimed at harmonising criminal
law
provisions in all Member States (“Framework Decision”) is under discussion in the Council.
To complement these, the Commission will undertake the following:

Action point:

A new Communication on fraud prevention is under preparation. The Commission intends to
monitor the payment industry’s efforts to achieve a secure environment. The Communication
will also focus on preventive actions, such as the exchange of information (both within
payment systems and between industry and public authorities), training programmes (for bank
staff, retailers, police officers) and educational material.

These initiatives are in conformity with the conclusions of the European Council recently held
in Tampere, which underlined the importance of preventive actions, cooperation and the
exchange of best practice in fighting financial crime.

CONCLUSIONS

Improvements in the efficiency of small value cross-border payments are required. The
Council and the European Parliament have endorsed the Framework for Financial Markets
Action Plan. This Communication has indicated the actions to be undertaken, within the area
of retail payments, in order to meet the needs - and expectations - of citizens and SMEs for a
"single payments area": i.e. so they can make small-value payments across borders nearly as
easily and cheaply as they can within their own countries. Both the private and public sector
have their respective roles to play. The Commission will keep the Parliament and the Council
regularly informed of progress on the issues discussed in this Communication.

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