COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features
Date: 2013-05-08
Institutions: European Commission
Subjects: account, bank charges, banking system, consumer protection, credit transfer, electronic money, freedom to provide services, intra-EU payment, single market

EUROPEAN 
COMMISSION 

Brussels, 8.5.2013  
SWD(2013) 164 final 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the comparability of fees related to payment accounts, payment account switching 
and access to payment accounts with basic features 

{COM(2013) 266 final} 
{SWD(2013) 165 final} 

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COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the comparability of fees related to payment accounts, payment account switching 
and access to payment accounts with basic features 

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Table of Contents 

Introduction .................................................................................................................. 5 
1. 
Context ......................................................................................................................... 7 
2. 
Policy background........................................................................................................ 7 
2.1 
Stakeholder consultation .............................................................................................. 7 
2.2 
Market overview ........................................................................................................ 10 
2.3 
Size of EU payment accounts market ........................................................................ 10 
2.3.1 
2.3.2 
Payment accounts....................................................................................................... 10 
2.3.3  Cross-border activity.................................................................................................. 11 
Existing policy and legislative framework................................................................. 11 
2.4 
2.4.1 
EU level...................................................................................................................... 11 
2.4.2  Member State level .................................................................................................... 13 
Procedural aspects...................................................................................................... 15 
2.5 
The Impact Assessment Steering Group .................................................................... 15 
2.5.1 
2.5.2 
The Impact Assessment Board................................................................................... 15 
2.5.3  Opinion of the IAB..................................................................................................... 15 
Problem definition...................................................................................................... 16 
3. 
3.1 
Drivers........................................................................................................................ 16 
Problems..................................................................................................................... 23 
3.2 
3.2.1  Access to basic account services................................................................................ 23 
Presentation and ease of comparison of bank fees..................................................... 33 
3.2.2 
Payment account switching........................................................................................ 38 
3.2.3 
Interlinks .................................................................................................................... 45 
3.3 
3.4 
Summary of consequences......................................................................................... 46 
3.4.1  Consumers.................................................................................................................. 46 
3.4.2 
Effects on financial industry ...................................................................................... 48 
3.4.3  Non-financial services/products providers................................................................. 49 
Public administrations................................................................................................ 49 
3.4.4 
3.4.5  Wider economy .......................................................................................................... 50 
Objectives................................................................................................................... 51 
4. 
Need for EU action..................................................................................................... 51 
5. 
To improve the proper functioning of the internal market and avoid the distortion 
5.1 
of competition in the field of retail banking............................................................... 52 
To empower consumers by enabling them to make informed choices and enable 
them to take advantage of the single market.............................................................. 53 
Allow all European citizens access to essential services and the opportunity to 
benefit from the single market by promoting economic and financial inclusion....... 54 
Policy options............................................................................................................. 55 
Options for access to basic account services.............................................................. 55 
Options for presentation and ease of comparison of bank fees.................................. 57 
Options for payment account switching..................................................................... 60 

6. 
6.1 
6.2 
6.3 

5.3 

5.2 

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7.5 

Choosing the most appropriate policy instrument ..................................................... 61 
6.4  
6.4.1 
Self-regulation............................................................................................................ 61 
6.4.2  Non-binding measures ............................................................................................... 61 
6.4.3  Binding measures ....................................................................................................... 62 
Impact analysis and comparison of policy options .................................................... 62 
7 
7.1 
Methodology .............................................................................................................. 63 
7.1.1  Access ........................................................................................................................ 63 
Transparency of fees and switching........................................................................... 64 
7.1.2 
Costs........................................................................................................................... 64 
7.2 
Benefits ...................................................................................................................... 65 
7.3 
Comparison of options and assessment of their impact: access to basic account 
7.4 
services....................................................................................................................... 66 
Comparison of options and assessment of their impact: presentation and ease of 
comparison of bank fees............................................................................................. 73 
Comparison of options and assessment of their impact: payment account switching81 
7.6 
The preferred policy option and its impact ................................................................ 86 
8 
Cumulative impacts and impacts on stakeholders ..................................................... 87 
8.1 
8.1.1 
Impacts on stakeholders ............................................................................................. 90 
8.1.2  Geographical impacts................................................................................................. 91 
8.1.3 
Social impacts ............................................................................................................ 93 
8.1.4  Administrative burden................................................................................................ 93 
Impact on small and medium-sized enterprises ......................................................... 94 
8.1.5 
8.1.6  Other impacts ............................................................................................................. 95 
Proportionality of the preferred options..................................................................... 95 
8.2 
Monitoring and Evaluation ........................................................................................ 96 
9. 
Annex I Policy Background ..................................................................................................... 97 
Annex II Access to basic account services............................................................................. 106 
Annex III Presentation and ease of comparison of bank fees ................................................ 161 
Annex IV Payment account switching ................................................................................... 193 
Annex V Glossary .................................................................................................................. 217 
Annex VI Assumptions and calculation bases used in determining costs and benefits ......... 218 

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1. 

INTRODUCTION 

Every citizen of the European Union should have the right of access to basic banking services 
throughout the EU, irrespective of their nationality and/or place of residence since access has 
become an essential condition for participation in economic and social life. Such access is not 
available to all. Improved access to basic banking services would enable every consumer to 
fully  benefit  from  the  internal  market,  by  for  example,  encouraging  the  free  movement  of 
persons and facilitating the purchase of goods cross-border.  
Furthermore, unclear bank fee information makes it difficult for consumers to make informed 
choices about which account is best-value for them. Since offers are difficult to compare, EU 
consumers tend to refrain from switching payment accounts, potentially to an account better 
suited  to  their  needs.  Finally,  EU  consumers  who  seek  to  acquire  banking  services  across 
borders are often hindered by requirements or practices in domestic markets that place non-
residents  at  a  disadvantage.  As  a  consequence,  competition  in  the  retail  banking  sector  is 
hindered. Clearly, these issues and their effects are interrelated, both for the individual and the 
wider economy. This impact assessment aims to address these problems and thereby: 

• 

• 

• 

Improve the proper functioning of the internal market and avoid the distortion 
of competition in retail banking. The uneven playing field between market actors 
results  in  reduced  competitive  rivalry  and  missed  opportunities  within  the  internal 
market. Without intervention, there is a risk of further fragmentation in the provision 
of payment accounts, threatening long-term market integration. 

Empower  consumers  by  enabling  them  to  make  informed  choices.  In  a 
competitive and efficiently functioning single market with a high level of consumer 
protection, EU citizens would have all the tools necessary, and thus be empowered to 
search  for  the  best  product  for  their  needs,  whether  in  their  own  or  in  another 
Member State. 

Allow  all  European  citizens  the  opportunity  to  benefit  from  the  single  market  by 
promoting  economic  and  financial  inclusion  and  through  EU-wide  access  to  basic 
banking services. Access to basic account services will facilitate financial inclusion 
enabling  all  consumers  to  participate  in  and  benefit  from  the  internal  market 
(including its digital environment). Improving access to this key service constitutes 
an action of the European Platform against Poverty and Social Exclusion (a flagship 
initiative of Europe 2020), which is designed to combat social exclusion.1 

A payment account is one of the most popular and common retail financial services. Through 
it, consumers conduct many everyday functions, such as receiving salaries or social security 
benefits, shopping, and paying bills. Consequently, payment accounts are generally known as 
'bank accounts' or 'current accounts'. A 'payment account' is defined in the Payment Services 
Directive2 and in the Recommendation on access to a basic payment account.3 
On 28 June 2012, as part of the concept of the 'banking union', EU leaders at the European 
Council  agreed  to  establish  a  single  supervisory  structure  for  banks  in  the  euro  area.  The 

1 

The European Platform against Poverty and Social Exclusion: A European framework for social and territorial cohesion 
[COM(2010) 758],  and accompanying document [SEC(2010)1654]. 

2  Article 4(14) of Directive 2007/64/EC describes a payment account as "an account held in the name of one or more 

3 

payment service users, which is used for the execution of payment transactions". 
Commission Recommendation 2011/442/EU of 18 July 2011 on access to a basic payment account [OJ L 190, 
21.7.2011, p. 87–91]. It defines a 'payment account' as "an account held in the name of one consumer which is used for 
the execution of payment transactions". 

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move towards a European 'banking union' aims to provide a clear longer term perspective on 
the  future  of  the  EU's  Economic  and  Monetary  Union.  Relevant  proposals  were  adopted  in 
September  2012.  Furthermore,  the  letter  from  President  Barroso  to  the  President  of  the 
European  Parliament  dated  12  September  2012,  in  relation  to  the  2012  State  of  the  Union 
Address, announced proposals in the area of transparency and comparability of bank fees and 
bank account switching as part of the Commission Work Programme for 2013.4  Further, the 
Single  Market  Act  (SMA)  II  adopted  in  October  2012  identified  a  legislative  initiative  on 
bank  accounts  in  the  EU  as  one  of  the  12  priority  actions  to  make  citizens  and  businesses 
confident  in  using  the  Single  Market  to  their  advantage.  Its  aim  is  to  "give  all  EU  citizens 
access  to  a  basic  payment  account,  ensure  bank  account  fees  are  transparent  and 
comparable, and make switching bank accounts easier."5 
This impact assessment complements the move towards a banking union in the area of retail 
banking by: 

• 

• 

Enhancing  the  functioning  of  the  internal  market  and  strengthening  the  conduct  of 
banking regime by removing the remaining barriers to the internal market. 

Laying  the  foundation  for  a  more  integrated  EU-level  treatment  of  banks  and 
consumers  and  thus  creating  a  level  playing  field  for  all  stakeholders  in  relation  to 
transparency of bank fees, switching and access, while empowering consumers.  

Accordingly, this Impact Assessment identifies specific problems in the retail banking sector, 
(in  particular  those  relating  to  the  restricted  access  to  a  payment  account,  the  lack  of 
transparent and comparable fee information and barriers to switching of payment accounts), 
considers  their  consequences  and  analyses  the  different  options  for  addressing  them.  Other 
problems which may also impact on the accessibility, transparency and mobility of payment 
accounts  such  as  the  tying  and  bundling  of  payment  accounts  to  other  products,  social  and 
economic  factors  (e.g.  labour  market  changes,  technological  gaps,  demographic  changes, 
income  inequalities,  physical  disabilities),  the  level  of  banking  sector  development  and  the 
structure  of  the  EU  banking  industry  (e.g.  branch  penetration)  are  outside  the  scope  of  this 
initiative. 
The  focus  of  this  impact  assessment  is  on  payment  accounts  held  by  consumers. 
Consequently, accounts held by businesses, even small or micro enterprises, unless held in a 
personal capacity, are outside the scope of this impact assessment. Furthermore, this impact 
assessment  does  not  cover  savings  accounts,  which  may  have  more  limited  payments 
functions.  
In  line  with  the  Commission's  better  regulation  approach,  policy  options  need  to  be 
considered  carefully  and  their  potential  impact  thoroughly  assessed.  Comprehensive  and 
comparable  pan-EU  statistical  data  in  the  field  of  retail  financial  services  is  scarce, 
particularly in relation to payment accounts. Consequently, in order to analyse the problems 
and the impacts of different options, this  report draws on information from a wide range of 
sources, including academic literature; pan-EU studies (including mystery shopping exercises 
and the Eurobarometer survey) undertaken on behalf of the Commission; national research by 
public authorities; mystery shopping exercises and studies at the national level; and reports by 
the  financial  services  industry  and  consumer  groups.  The  information  from  these  different 
sources  is  generally  consistent;  where  divergences  exist,  they  are  noted.  The  views  on  the 
available  evidence  expressed  by  stakeholders  are  taken  into  account  within  the  assessment. 

4 
5 

http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/661 
"Single Market Act II - Together for new growth", COM(2012) 573 of 3 October 2012, page 16. 

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Difficulties  in  collecting  and  comparing  data  would  be  addressed  under  the  foreseen 
monitoring exercise (see Chapter 9). 

2. 

CONTEXT 

2.1. 

Policy background 

European Commission Studies and Research 
The  Commission  has  undertaken  a  thorough  review  of  EU  payment  account  markets  over 
several  years.  Since  the  2007  report  of  the  Sector  Inquiry  into  retail  banking,  a  number  of 
studies have been undertaken. Please see Annex I for further information. 
Statements from EU Institutions 
There is broad consensus that legislative measures on payment accounts are required in order 
to open up and improve the functioning of the single market for all citizens. In particular, in 
its  Resolution  on  a  single  market  for  Europeans,6  the  European  Parliament  called  "on  the 
Commission to submit by June 2011 a legislative proposal on guaranteeing access to certain 
basic banking services and to improve the transparency and comparability of bank charges by 
the  end  of  2011."  This  was  reiterated  in  a  recent  European  Parliament  resolution  with 
recommendations  to  the  Commission  on  Access  to  Basic  Banking  Services7  which  asks  the 
Commission  to  put  forward  a  legal  proposal  addressing  access  to  basic  banking  services  by 
January  2013.  The  report  underlines  that  access  to  basic  payment  services  is  a  precondition 
for consumers to benefit from the internal market, reap the opportunities of e-commerce, and 
it  will  also  improve  social  inclusion  across  the  EU.  The  March  2012  European  Council 
similarly  welcomed  the  Commission's  intention  to  propose  a  new  round  of  measures  on 
payment  accounts  designed  to  open  up  new  growth  areas  in  the  Single  Market.  Finally,  the 
European  Economic  and  Social  Committee  (EESC)  has  issued  several  reports  relating  to 
payment accounts8 which state that retail financial services markets are one of the areas where 
the  greatest  shortcomings  in  the  operation  of  the  Single  Market  have  been  observed.9  See 
Annex I for further details.  

Stakeholder consultation 

2.2. 
Since 2007, the Commission has organised several public consultations on account services.10 
There is unanimous agreement that customer mobility and consumer confidence in the area of 
payment  accounts  is  crucial  and  that  the  accessibility  of  payment  accounts  and  means  of 
payment are vital for fully participating in the economy and society. In the areas covered by 
this impact assessment, a specific public consultation was held in 2012.11 

European Parliament Resolution 2010/2278(INI). 
European Parliament Resolution 2012/2055(INI). 

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7 
8  Opinion on the White Paper on Financial Services Policy 2005-2010, OJ C309, 16 December 2006; Opinion on the 
Green Paper on Retail Financial Services in the Single Market, OJ C151, 17 June 2008; Opinion on Socially 
responsible financial products, C21, p. 33, 21 January 2011; Opinion on the Communication Towards a Single Market 
Act – For a highly competitive social market economy – 50 proposals for improving our work, business and exchanges 
with one another, OJ C132, p. 47, 3 May 2011; Opinion on Financial education and responsible consumption of 
financial products, C318, p. 24, 29 October 2011. 

9  Opinion on the Communication 'Towards a Single Market Act – For a highly competitive social market economy – 50 
proposals for improving our work, business and exchanges with one another', OJ C132, 3 May 2011, point 2.2.1. 
10  Consultations on the report of the Expert Group on Customer Mobility (2007), on financial inclusion (2009), 

on access to a basic payment account (2010). See Annex I for details. 

11  Public Consultation on Bank Accounts (20 March to 12 June 2012). See Consultation document, Summary of responses 

and stakeholders' responses, published at http://ec.europa.eu/internal_market/finservices-
retail/policy_en.htm#consultation and http://ec.europa.eu/consumers/consultations/bank_accounts_consultation-
2012_03_20_en.htm 

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More than 120 replies  were received. From consumers and financial services industry, their 
representative  associations at both national and European level, and authorities from  half of 
the EU Member States12 and from a State of the EEA. In general, all stakeholder groups are 
aware  of  the  problems  in  the  retail  banking  sector.  More  diverging  positions  emerged  on 
further  measures  and  the  level  at  which  these  should  be  positioned,  with  further  nuances 
across the three areas covered by the consultation, as summarised below. 
Access to basic account services 
In general, the financial services industry and a number of Member States participating in the 
public consultation argue that there are no major obstacles for consumers in accessing a basic 
account.  They  state  that  the  financial  services  industry  adheres  to  either  the  EU 
Recommendation  or  similar  national  provisions  to  ensure  access,  concluding  that  no  action 
should  be  taken  in  this  area.  The  financial  services  industry  further  emphasises  that  if  any 
measure  were  to  be  taken,  it  should  be  at  national  level  to  accommodate  the  different  legal 
and regulatory landscapes across the EU. Any extension of access to basic account services to 
non-residents is particularly opposed by the banking industry.  
On the contrary, consumers, representatives of civil society and some Member States contend 
that the current situation is unsatisfactory and that difficulties exist in accessing basic account 
services. Consumers in particular would support a legislative initiative that will ensure access 
to  an  account  with  a  range  of  functionalities  likely  to  enable  them  to  live  a  normal  life. 
Accordingly,  they  argue  in  favour  of  legislative  measures  at  EU  level,  to  establish  an 
obligation  for  account  providers  to  guarantee  access  to  a  basic  payment  account  to  all 
consumers,  albeit  with  some  flexibility  for  national  circumstances.  This  flexibility  is 
necessary due to different characteristics of national markets and different levels of unbanked 
consumers  in  the  Member  States.13  Consumer  representatives  have  previously  argued  that 
self-regulation or a Recommendation would be ineffective since ensuring access to a payment 
account  is  neither  a  priority  for  the  financial  services  industry  nor  for  Member  States.14  In 
terms  of  concrete  impediments  to  access  the  following  are  cited:  consumers'  financial 
situations (i.e. low income); high costs of account services; consumers' lack of confidence in 
the banking system; unsuitability of the products offered by banks; and insufficient financial 
education. 
Presentation and ease of comparison of bank fees 
All  stakeholder  groups  recognise  the  difficulties  that  exist  in  relation  to  transparency  and 
comparability  of  fees.  Specific  causes  identified  by  consumer  groups  and  several  Member 
States include: complex and diverse business models of banks across countries; issues linked 
to the offer of packaged services; charging structures; varying terminology across banks; the 
speed  with  which  new  and  innovative  products  enter  the  market;  cross-subsidisation  within 
retail banking, and lack of clear legislation in this area. 
All citizens and consumer groups and a number of Member States participating in the public 
consultation highlight the importance of coordination across the border and support EU level 
initiatives. Others, such as the majority of financial industry respondents and other Member 
States, consider action should be conducted at national level initially. One Member State does 
not see any grounds for intervention at EU level at this stage. 

12  Replies from public authorities include: Austria, Belgium, Czech Republic, Estonia, Spain, France, Finland, Hungary, 

Ireland, Lithuania, Latvia, Netherlands, Poland, United Kingdom as well as Norway. 
Summary of responses to the public consultation on financial inclusion: ensuring access to a basic bank account, 
14 September 2009. http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary_en.pdf  
Ibid. 

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The majority of Member States and financial services industry respondents consider that any 
measures implemented at EU level should take into account existing national initiatives and 
the need for flexibility. For one bank, while there is no need for EU action, the real issue is 
the  lack  of  a  European  retail  financial  market.  Some  banks  are  open  to  considering  a 
coordinated EU approach in specific areas (e.g. glossaries), but stress the difficulties that such 
an  approach  would  entail.  Most  respondents  from  the  financial  services  industry  stress  the 
need  for  a  balance  between  ease  of  comparison  and  excessive  standardisation  affecting 
differentiation, qualitative aspects and particularities of national markets. 
Payment account switching 
Consumers and representatives of civil society argue that banks do not always offer services 
aimed  at  facilitating  switching.  Even  where  such  services  are  provided,  they  do  not  fully 
comply with the provisions of the Common Principles on bank account switching ("Common 
Principles").15 However, the financial services industry considers that most providers offer a 
switching service in line with the Common Principles. Public authorities tend to fall between 
these two groups, stating that while most banks across the EU offer a switching service, this 
service  is  not  always  entirely  compliant  with  the  Common  Principles.  Several  respondents 
highlight at least one remaining obstacle to switching; these include the risk of direct debits 
being  redirected,  and  the  possibility  of  mistakes  occurring  due  to  insufficient  cooperation 
between  banks  and  third  parties.  Public  authorities  note  that  bank  staff  lack  awareness  of 
switching  services,  often  due  to  insufficient  training,  and  that  consumers  are  provided  with 
insufficient information. One public authority considers the Common Principles to be a half-
way measure. 
Consumers,  civil  society  and  Member  States  consider  that  the  ineffective  application  of  the 
Common  Principles  cause  delays  in  the  switching  procedure,  problems  with  transferring 
direct  debits,  a  lack  of  cooperation  from  and  charges  imposed  by  the  old  bank,  a  lack  of 
information on the switching process and a lack of preparation of the bank staff. Conversely, 
the financial services industry argues that the Common Principles solve most of consumers’ 
problems, though it splits on whether misdirection of payments remains an issue. The industry 
adds that issues with switching facilities are not a key factor in impeding access to the market 
for smaller financial services providers.  
There  are  mixed  views  as  to  whether  the  Common  Principles  should  be  made  compulsory. 
Several Member States and the financial services industry believe that the Common Principles 
should  remain  voluntary.  Other  Member  States  are  more  receptive  to  making  the  Common 
Principles compulsory, as this would guarantee more effective enforcement of the provisions. 
Consumers and representatives of civil society strongly believe that the Common Principles 
should be made binding.  
Consumers  are  also  favourable  to  measures  on  the  portability  of  payment  account  numbers 
and the automatic redirection of payments. Stakeholders are split as to whether any initiative 
should  also  cover  cross-border  switching.  Some  public  authorities  and  consumers  appear 
favourable  to  the  introduction  of  measures  covering  cross-border  switching;  others,  in 
addition to the financial services industry, do not.  

15  The Common Principles, developed by the European banking industry in 2008, define a model switching aiming at such 
a facilitation of switching by clearly defining the process of switching (deadlines, tasks of the two banks involved, 
limiting of certain cost to consumer) and providing for adequate information and assistance to the consumer by bank 
staff.; The Common Principles for Bank Account Switching", 
http://www.eubic.org/Position%20papers/2008.12.01%20Common%20Principles.pdf  

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2.3.  Market overview 

Payment accounts are provided by payment services providers. While in theory, this can cover 
both payments institutions (i.e. those that are not credit institutions) and credit institutions, in 
practice, the majority of bank or payment accounts are provided by credit institutions. Data on 
accounts  provided  by  payment  services  providers  that  are  not  credit  institutions  is  not 
available; consequently, in this analysis, the focus of the data, where available, is on accounts 
provided by credit institutions. 

Size of EU payment accounts market 

2.3.1. 
There are at least 368 million payment accounts in the EU.16 The precise figure is likely to be 
considerably higher; first, the data excludes those under the age of 15 with payment accounts 
(though  this  is  a  relatively  small  group);  second,  the  data  excludes  the  possibility  that 
consumers  may  have  multiple  payment  accounts  (multi-banking),  which  is  prevalent  in,  for 
example, the UK; third, the figures do not include many dormant accounts. Conversely, the 
figure may be slightly inflated due to a small number of jointly-held payment accounts. While 
there  is  limited  data  on  individuals'  access,  there  is  even  less  data  on  household  access, 
creating a risk that this data lacks reliability.17 
Retail banking represents over 50% of total banking activity in the EU.18 It remained the most 
important sub-sector of banking which accounted for more than 50% of its total gross income 
in the EU. 

2.3.2.  Payment accounts 

A payment account usually has a range of different services attached to it, such as the ability 
to place money in an account, to withdraw cash, to execute payment transactions, to conduct 
direct  debits  and  credit  transfers  as  well  as  the  provision  of  a  payment  card  (see  Graph  I 
below).  Consequently,  a  payment  account  plays  an  important  role  in  the  integration  of 
consumers into the wider economy. While there has been a steady growth of the use of card 
payments, credit transfers and direct debits over the period 2000-2010, the use of cheques has 
fallen.  

Graph I: Payment transactions in the EU (% of the number of transactions in 2010) 

Source: ECB data, Statistical Data Warehouse, 2010, http://sdw.ecb.europa.eu/ 

16  Estimate by Commission services based on the number of EU citizens above the age of 15 with a payment account. 
Source: Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012 and Eurostat. 
17  Similar conclusions are reached in Measuring Financial Inclusion, The Global Findex Database, World Bank, April 

18 

2012, p. 5. 
In most EU Member States, the size of national financial sectors oscillates between 2 and 4 times the domestic GDP; 
however, in some of them it exceeds by far the country's GDP, e.g. 22 times in Luxembourg and more than 6 times in 
Malta, Ireland and Cyprus. 

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2.3.3.  Cross-border activity 

In  general  terms,  it  is  unusual  for  consumers  to  purchase  retail  financial  services  directly 
cross-border; 94% of consumers stated that they have never bought a financial product outside 
their  home  country19  although  e-commerce  means  that  often  consumers  buy  abroad  without 
even realising it. Payment accounts are, however, the financial services product most likely to 
be  purchased  cross-border,  with  3%  of  EU  consumers  stating  that  they  have  opened  a 
payment account in another Member State.20 
The  number  of  consumers  who  have  opened  a  payment  account  cross-border  varies 
considerably  from  around  8%  in  Estonia  and  Luxembourg  to  1%  in  Romania,  Bulgaria, 
Greece,  Malta  and  France.21  Despite  generally  low  levels  of  cross-border  activity,  the 
potential  interest  in  opening  a  payment  account  cross-border  is  generally  higher  across  the 
EU. (See Graph II). 

Graph II: % of consumers that have opened a payment account cross-border (actual) and  
who would consider opening an account cross-border (potential) 

Source: Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p.30 and 35 

At  present,  direct  cross-border  provision  of  payment  accounts  is  driven  by  the  supply  side 
rather than the demand side. Financial services providers can supply payment accounts cross-
border  in  two  ways:  through  local  presence  (e.g.  branches,  subsidiaries,  mergers  and 
acquisitions) or through direct distribution channels (e.g. via telephone or the internet). 

2.4. 

Existing policy and legislative framework  

2.4.1.  EU level 

In  July  2011,  the  Commission  adopted  a  Recommendation  on  access  to  a  basic  payment 
account22  which  set  out  principles  to  guarantee  consumers  access  throughout  the  EU.  The 
Recommendation  also  affirmed  the  right  of  any  consumer,  irrespective  of  his/her  financial 
circumstances, to open and use a basic payment account even in a Member State where s/he 
does  not  permanently  reside,  provided  that  the  consumer  does  not  already  hold  a  payment 
account  in  that  country.  A  basic  account  should  be  offered  free  or  at  a  reasonable  charge. 
Member States were to ensure that at least one provider is in charge of offering basic payment 
accounts in their jurisdiction and to guarantee that providers use transparent, fair and reliable 
systems to verify whether consumers already hold an account. They must, when refusing an 
application, immediately inform the consumer of the grounds in writing and free of charge.  

19 

Special Eurobarometer on Retail Financial Services, European Commission, February 2012, P31, 
http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm  
Ibid. 
Ibid. 

20 
21 
22  Commission Recommendation 2011/442/EU (see footnote 3). 

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The  Commission  invited  Member  States  to  ensure  that  basic  payment  accounts  include  a 
number of services. These comprise the provision of a debit card, the ability to make deposits 
and  cash  withdrawals,  and  the  possibility  of  execution  of  payment  transactions  –  including 
direct debits and credit transfers. 
In  addition,  access  to  a  basic  payment  account  should  not  be  made  conditional  on  the 
purchase of additional services, and the provider should not offer, explicitly or otherwise, any 
overdraft  facilities  in  conjunction  with  a  basic  payment  account.  Providers  should  make 
information available to consumers about the specific features of the basic payment accounts 
on offer, their associated charges and their conditions of use.  
Member States were also to launch public campaigns to raise consumer awareness about the 
availability  of  basic  payment  accounts  and  ensure  that  payment  service  providers  make 
information available about the specific features of the basic payment accounts on offer, their 
associated  charges  and  their  conditions  of  use.  Finally,  Member  States  were  to  designate 
competent  authorities  to  monitor  effective  compliance  with  the  principles  set  out  in  the 
Recommendation  and  to  ensure  that  appropriate  and  effective  complaints  and  redress 
procedures were established for the out-of-court settlement of disputes concerning the rights 
and  obligations  established  under  the  principles  set  out  in  the  Recommendation.  The 
Commission  set  21  January  2012  as  a  deadline  for  Member  States  to  implement  the 
Recommendation after which the Commission committed to conduct a review.23 Based on the 
information provided by Member States, the Commission in August 2012 published a follow-
up  report  presenting  the  state  of  implementation  of  the  Recommendation  in  each  Member 
State.24  The  data  presented  in  the  report  proved  that  the  implementation  of  the 
Recommendation was largely inadequate, as only three Member States broadly complied with 
it and more than half the Member States had no framework in place at all to promote the right 
of access. 
The Payment Services Directive (2007/64/EC) introduced certain transparency obligations for 
EU  payment  service  providers,  which  would  complement  the  proposed  initiative.  Payment 
service providers have to provide certain information before a payment service is undertaken. 
This  includes  terms  and  conditions;  information  on  the  payment  service  provider  itself; 
features  of  the  payment  service  and  its  associated  charges,  and  additional  information  once 
the payment has been completed. The Payment Services Directive does not, however, contain 
any  obligations  on  the  format  of  the  disclosures  nor  does  it  address  non-payment  related 
information. The Payment Services Directive is currently subject to a formal evaluation by the 
Commission  and  a  report  will  be  published  shortly  in  line  with  Article  87  of  the  Payment 
Services Directive.25 
In August 2010, the Commission asked the European Banking Industry Committee (EBIC) to 
improve the clarity, comparability and transparency of account fees and to ensure that account 
fee  information  is  easily  available  to  consumers.  Despite  significant  efforts  until  the  end  of 
2011  to  establish  a  principles-based  industry  self-regulatory  code,  the  initiative  failed 
miserably, producing no results whatsoever. 
In  2007,  following  the  sector  inquiry  into  retail  banking26  and  as  announced  in  the  Single 
Market Review,27 the Commission asked EBIC to make it easier for consumers to move their 

23  Commission Recommendation 2011/442/EU (see footnote 3). 
24  Commission Staff Working Document: National measures and practices as regards access to basic payment accounts - 

Follow-up to the Recommendation of 18 July 2011 on access to a basic payment account, 22.08.2012 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/followup_en.pdf  
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:319:0001:0036:EN:PDF 

25 
26  COM(2007) 33, 31.1.2007 and SEC(2007) 106, 31.1.2007 
27  SEC(2007)1520 

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accounts  from  one  bank  to  another.  An  in-depth  analysis  of  the  problems  and  potential 
solutions, alongside a preliminary involvement of the Impact Assessment Board on this issue, 
underpinned  the  launch  of  a  self-regulatory  initiative  and  in  2008,  EBIC  developed  the 
Common  Principles  for  Bank  Account  Switching.28  These  apply  to  the  switching  of  current 
accounts within a Member State. Implementation by national banking associations was to be 
completed  by  the  end  of  2009.  EBIC  has  stated  that  they  have  been  implemented  by  all 
Member  States.29  However,  research  has  shown  that  self-regulation  has  not  achieved  the 
necessary results; implementation of the Common Principles is incomplete and inadequate30 
and customer mobility and competition remain impeded.31  

2.4.2.  Member State level 

improved  since 

to  basic  account  services  has  not 

the 
Access 
Recommendation. Only three Member States (Belgium, France and Italy) have a framework 
in place that is broadly in line with the Recommendation and in Belgium and France it already 
existed  prior  to  the  adoption  of  the  Recommendation.  While  some  countries  have  a  general 
legal  framework32  or  self-regulatory  rules,33  these  frameworks  hardly  comply  with  the 
Recommendation, and in almost half of Member States,34 there are no rules in place and few 
plans to introduce them. 
Research on account information at national level35 showed a range of initiatives directed at 
improving transparency and comparability of bank fees related to payment accounts (Table 1). 

the  adoption  of 

Table 1: Types of initiatives to improve transparency and comparability of bank fees 

Tools for consumers 

Tools for public  
Authorities 

A)  Glossaries 
B)  Disclosure of information on fees 
C)  Comparison tools 
D)  Financial education and informative initiatives 
E)  Enforcement actions 
F)  Market studies allow identifying the need to intervene in some circumstances; 
G)   Combined initiatives 

In  the  public  consultation  on  bank  accounts,  several  Member  States  referred  to  internal 
reports,  studies  and  surveys  aimed  at  analysing  the  persisting  difficulties  as  regards 
presentation and comparability of bank account fees.36 Despite the variety of initiatives, their 

28  The Common Principles for Bank Account Switching, 

http://www.eubic.org/Position%20papers/2008.12.01%20Common%20Principles.pdf  

29  EBIC reports: 2009 and 2010 available at: http://www.ebf-fbe.eu  
30  Notably the mystery shopping studies performed on behalf of the European Commission in Consumer Market Study on 
the consumers’ experiences with bank account switching with reference to the Common Principles on Bank Account 
Switching, GfK, January 2012 (http://ec.europa.eu/consumers/rights/docs/switching_bank_accounts_report_en.pdf) and 
by BEUC and also demonstrated in studies performed at national level (UK, Ireland, Austria) cited below . 

31  See Section 3.2.3 for more details. 
32  Denmark, Estonia, Finland, Lithuania and Luxembourg, Portugal and Sweden. 
33  Germany, Hungary, Ireland, the Netherlands and the UK. 
34  Austria, Bulgaria, the Czech Republic, Cyprus, Greece, Spain, Latvia, Malta, Poland, Romania, Slovenia and Slovakia. 
35  Market study of the current state of play in Member States regarding initiatives in bank fee transparency and 

36 

comparability in personal current bank accounts. Van Dijk Management consultants, 2011, 
http://ec.europa.eu/consumers/rights/docs/1912012_market_study_en.pdf  
In France: "Rapport de Georges Pauget et Emmanuel Constans sur la tarification des services bancaires", 07/2010 
(http://www.ladocumentationfrancaise.fr/var/storage/rapports-publics/ 104000365/0000.pdf). In Hungary, the Hungarian 
Financial Supervision Authority: "Financial consumer risk report", 09/2011 
(http://www.pszaf.hu/data/cms2325056/CP_riskreport_2011H1.pdf) and "Consumer protection risk report", 03/2011 
(http://www.pszaf.hu/data/cms2309653 /cons_report_2010H2.pdf); the Central bank of Hungary: "Study on the pricing 
of payment services, also focusing on pricing in different customer groups" (recently conducted Publication of the 
survey results is forthcoming); the Hungarian Competition Authority, GVH: "Survey on switching service" (completed 
in 2006-2007, available only in HU language, at http://www.gvh.hu/gvh). In Ireland, the IE Central Bank: "Review of 
the transparency of fee brochures and account statements of personal current accounts to improve the transparency of 

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application (e.g. 58% of the initiatives on disclosure of information on fees were backed by 
legislation whilst 42% were through self-regulation) and relevance to payment accounts (e.g. 
none of the glossaries identified were specific to current accounts) differ widely. Please see 
Annex III for further information. 
The  Common  Principles  have  been  implemented  by  national  banking  communities  through 
industry  codes,  recommendations,  guidelines  or  interbank  agreements.  Legislative  measures 
have  only  been  taken  in  Ireland,  where  a  statutory  Switching  Code  replaced  the  Voluntary 
Switching Code on 1 October 2010.37 Some national banking communities have applied the 
switching  provisions  to  other  products  or  services.38  In  order  to  assess  how  banks  assist 
consumers  with  payment  account  switching  –  and  to  what  extent  banks  offer  the  switching 
service  as  defined  in  the  Common  Principles  –  the  Commission  contracted  a  mystery 
shopping  study39  in  2011  which  found  that  the  large  majority  of  consumers  (80%)  faced 
difficulties  in  switching.40  In  their  response  to  the  public  consultation  a  number  of  industry 
representatives  have  questioned  the  validity  of  the  conclusions  reached  by  this  mystery 
shopping  exercise.  The  main  criticisms  related  to  the  limited  sample  of  mystery  shoppers 
relative  to  the  number  of  holders  of  a  payment  account  and  its  seemingly  divergent  results 
when  compared  to  the  Eurobarometer41  survey.  The  Commission  has  acknowledged  these 
criticisms.  However,  while  the  technique  of  mystery  shopping  can  provide  for  first  hand 
insights  into  consumer  experiences,  it  may  not  be  feasible  nor  reasonable/(cost-effective) to 
carry  out  large  scale  mystery  shopping  exercises  to  achieve  a  statistically  representative 
population  sample.42  This  study  comprised  a  sample  of  nearly  1400  enquiries  across  all  27 
Member  States  and  targeted  mainly  large  market  players  so  as  to  cover  at  least  80%  of  the 
current  account  market  share  of  each  Member  State.  It  is  therefore  the  single  most  recent 
assessment of the situation across Member States on a comparable basis. Moreover, all studies 
providing  for  an  assessment  of  the  functioning  and  effectiveness  of  the  switching  process 
performed  at  national  level,  broadly  confirm  the  results  of  the  EU-wide  mystery  shopping 
study.43 
Regarding the seeming discrepancies of results of the mystery shopping study and the recent 
Eurobarometer, we would like to clarify that even though both studies provide for valid data 
based on representative EU-wide samples, the two studies assessed different issues. Whereas 
the  mystery  shopping  study  aimed  at  a  detailed  assessment  of  the  functioning  and 

banking products", July 2009 (http://www.centralbank.ie/regulation/processes/consumer-protection-code/compliance-
monitoring/Documents) as part of the work set out in its 2007-2009 Strategic Plan. In the UK, several analyses 
conducted by the Office of Fair Trading between 2008 and 2012. 

37  Code of Conduct on the Switching of Current Accounts with Credit Institutions, Central Bank of Ireland, 2010, 

http://www.centralbank.ie/regulation/processes/consumer-protection-code/documents/  

38  See Annex IV for more information. 
39  Consumer Market Study on the consumers’ experiences with bank account switching with reference to the Common 

Principles on Bank Account Switching, GfK, February 2012 (http://ec.europa.eu/consumers/rights/fin_serv_en.htm#fin). 

40  See Annex IV for more information. 
41 

Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p.87 
http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm 
If, for example, we wished to have a statistically significant sample of 1% of account holders, we would need to have a 
more that 3.68 million enquiries, which would be unreasonable. 

42 

43  Examples:  

• 

Tarifs  et  mobilité  bancaires: 
http://image.quechoisir.org/var/ezflow_site/storage/original/application/961abc610b3b1f8bd82e9ad5ed117a5f.pdf 

le  désolant  palmarès  des  Banques,  UFC  Que  Choisir,  October  2010, 

•  Central  Bank  Inspection  and  Mystery  Shop  Identifies  Concerns  about  Information  Provided  on  Current  Account 
Switching,  Central  Bank 
http://www.centralbank.ie/press-area/press-
releases/Pages/CentralBankInspectionandMysteryShopIdentifiesConcernsaboutInformationProvidedonCurrentAcc
ountSwitching.aspx 

Ireland,  December 

2011, 

of 

•  Kontowechsel: Wie funktioniert er?, VKI, March 2010, 

http://www.arbeiterkammer.at/bilder/d118/Studie_Kontowechsel2010.pdf 

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effectiveness  of  the  switching  process  and  of  the  Common  Principles  in  practice,  the 
Eurobarometer  was  geared  at  assessing  the  number  of  consumers  that  would  be  a  priori 
interested  in  switching  providers  (without  making  any  reference  to  the  industry  switching 
mechanism). Therefore, the results of the two exercises are not directly comparable. 

2.5. 

Procedural aspects 

2.5.1.  The Impact Assessment Steering Group 

An  Inter-Service  Impact  Assessment  Steering  Group  (IASG)  was  established  in  February 
2012.  It  was  jointly  chaired  by  DG  Health  and  Consumers  and  DG  Internal  Market  and 
Services  and  included  representatives  from  DG  Competition,  DG  Economic  and  Financial 
Affairs,  DG  Employment,  Social  Affairs  and  Inclusion,  DG  Enterprise  and  Industry,  Joint 
Research Centre, DG Justice, DG Taxation and Customs Union, the Secretariat General and 
the Legal Service. It met on 2 March, 27 April, 5 July and 16 July 2012. The minutes of the 
last IASG meeting were sent to the Impact Assessment Board.  

2.5.2.  The Impact Assessment Board 

The  report  was  submitted  to  the  Impact  Assessment  Board  (IAB)  on  27  July  2012  and 
discussed at the meeting of 5 September 2012.  

2.5.3.  Opinion of the IAB 

In its first opinion, the IAB asked for a revision of the document, taking into account its main 
recommendations for improvement. The following modifications were made:  

• 

• 

• 

The  problem  definition  is  improved  through:  a  reinforced  presentation  of  the 
interlinks (Sections 3.3 and 3.4); a more detailed and precise description of the scope 
of evidence generally available in the Introduction Chapter and throughout the text; 
arguments demonstrating that the problem drivers omitted from the analysis are not 
critical  for  the  envisaged  outcome  in  Chapters  3  ("Problem  definition")  and  6 
("Policy  options");  aspects  related  to  the  transnational  dimension  of  the  identified 
problems  in  Chapter  3,  including  a  better  description  of  the  baseline  scenario  on 
'access',  and  a  more  comprehensive  analysis  of  the  follow-up  given  to  the 
Recommendation on access. 

Better explanation of the subsidiarity and proportionality questions is provided in the 
problem  definition  section  and  in  Chapter  5  ("Need  for  EU  action").  These  now 
cover, specifically, the reasons why the envisaged actions must be taken at EU level 
in  order  to  achieve  the  general  objectives;  the  proportionality  analysis  has  been 
strengthened  in  the  description  of  policy  options  for  each  area  in  Chapter  6,  their 
assessment  against  criteria  related  to  costs  and  benefits  in  Chapter  7  ("Impact 
analysis  and  comparison  of  policy  options")  and,  in  particular,  in  Section  8.2  of 
Chapter  8  ("The  preferred  policy  option  and  its  impact"),  which  is  now  devoted  to 
the proportionality of the preferred set of policy options. 

In  terms  of  the  improved  presentation  of  options  and  expected  impacts,  a  new 
Chapter 6 is fully devoted to the presentation of the policy options; a new Chapter 7 
provides  a  comparative  analysis  of  the  policy  options  under  each  individual  area, 
which  determines  the  best  approach  for  the  three  issues  covered  by  this  report;  the 
content of the preferred package is now described in more detail in the introduction 
and  the  first  paragraph  of  the  new  Chapter  8,  including  a  comparison  of  different 
combinations of options; finally, Chapter 9 deals with the evaluation and monitoring 
aspects of the preferred option. 

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• 

• 

References  to  views  expressed  by  stakeholder  groups  have  been  moved  from 
Annexes  (II,  III  and  IV)  to  the  main  report,  notably  in  Chapter  6  and  7.  New 
references from the public consultation have been added, where relevant, providing a 
more concrete account of the stakeholder views (e.g. magnitude of the problem). 

Finally, the revised Impact Assessment report includes a number of  more  technical 
comments,  including  a  more  careful  and  transparent  presentation  of  the  evidence 
base. 

In  its  second  opinion,  the  IAB  raised  the  following  main  points  for  review:  i)  provision  of 
more  robust  evidence  of  the  problems  in  the  three  areas,  a  more  in-depth  analysis  of  their 
cross-border  dimension  and  a  clearer  explanation  of  the  interlinks  between  them;  ii)  better 
demonstration  of  subsidiarity and  proportionality  of  the  options  involving  binding  measures 
on access, fee transparency and switching; iii) improved presentation of the elements retained 
in the preferred package of options and its assessment against the baseline scenario; iv) more 
explicit  references  to  stakeholder  critical  views.  A  number  of  changes  were  made  to  the 
Impact  Assessment  in  response  to  the  IAB's  comments.  In  particular,  data  and  analysis  of 
problems in the area of access (relating to table 3 in paragraph 3.2.1) was improved to better 
indicate the existing regulatory framework in this area. Cross border aspects in the problem 
definition  for  transparency  and  switching  were  strengthened  with  additional  examples  and 
references  to  data  (paragraphs  3.2.2  and  3.2.3).  A  number  of  examples  were  added  in  the 
description  of  the  links  between  the  problems  in  the  three  different  areas  in  Section  3.3. 
Complementary  information  was  provided  in  the  subsidiarity  assessment  in  the  areas  of  fee 
comparison  and  switching  (Chapter  5).  A  new  Section  (8.1)  was  introduced  to  improve  the 
presentation of the elements of the preferred package of options, including a comparison with 
alternative  packages  assessed  against  the  'no  action'  scenario.  Where  relevant  the  critical 
views  expressed  by  stakeholders  during  the  public  consultation  were  set  out  more  clearly 
throughout the text, notably with respect to the methodology used to gather evidence (mystery 
shopping exercises). 

3. 

PROBLEM DEFINITION 

This chapter identifies the problems and their drivers that create barriers to the creation of a 
well-functioning internal market for payment accounts, with effects upon both consumers and 
businesses.  

3.1. 

Drivers 

Market failures 
Market failures occur when market forces fail to lead to an optimal outcome. The two main 
sources  of  market  failure  in  relation  to  the  issues  covered  in  this  report  are  information 
asymmetries and misaligned incentives (e.g. conflicts of interest). 
With information asymmetries, market actors may fail to take decisions that are in their best 
interests  because  they  lack  information.  An  account  provider  is  better  informed  than  a 
consumer about the account features, whereas the consumer is better informed about his own 
personal  and  financial  situation.  The  role  of  payment  accounts  as  gateway  products  also 
creates information asymmetries between incumbent providers and potential new entrants. 
As  regards  misaligned  incentives,  providers  may  seek  to  sell  the  most  expensive  payment 
account,  whether  or  not  its  features  or  attached  services  respond  to  a  consumer's  needs.  A 
consumer may wish to open an inexpensive account, but providers may consider them as risky 
or non-profitable, and refuse them that account. Furthermore, the role of accounts as gateway 

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products may add to these issues: while consumers search for a product meeting their needs, 
providers aim to attract consumers whom they can sell additional products to. In some cases 
consumers  may  be  prevented  from  participating  in  the  market  as  a  consequence.  The 
European Consumer Organisation (BEUC) notes this problem, indicating that low income is a 
reason why banks refuse consumers an account.44 
Varying regulatory framework and limitations of self-regulation 
Regulation is designed to address market failures, but ill-designed, inconsistent, or ineffective 
regulation will not do so. In relation to switching and fee transparency, the current regulatory 
differences across Member States are exacerbated by the failure of self-regulatory initiatives; 
and with regard to access, by Member States' reluctance to implement the Recommendation.  
Other factors 
Other  factors,  described  below,  may  impact  upon  payment  account  mobility  and  consumer 
choice, but these factors are beyond the scope of this initiative.  
First,  low  levels  of  financial  literacy  may  worsen  the  information  asymmetries  described 
above.45  Even  if  enhanced  financial  education  could  help  in  improving  financial  knowledge 
and  confidence  of  consumers,  it  nevertheless  has  certain  limits  and  is  not  sufficient  in 
increasing accessibility to financial services. It usually offers very basic knowledge which has 
limited  use  when  a  consumer  is  confronted  with  relatively  complex  aspects  of  financial 
products (e.g. compound interest rate) or when, as this often is the case, there is a significant 
time lag between the moment the person benefits from financial education and the time when 
s/he  needs  to  apply  the  taught  concept  when  buying  a  financial  product,  or  opening  a  bank 
account.  Therefore,  financial  education  should  not  substitute  but  rather  complement  simple 
and  objective  information  offered  by  providers.  Also,  these  initiatives  rarely  reach  general 
public focusing instead on a small group of consumers whereas a broad lack of awareness of 
payment account facilities and their conditions may in fact cause self-exclusion, particularly 
among vulnerable consumers. For instance, in Belgium despite there being a legal right to a 
basic account, 63% of those without an account surveyed in 2011 thought a bank would reject 
their  application.46  Therefore  –  as  stressed  by  users'  representatives  –  it  is  essential  that 
consumers understand their right to access a basic payment account.47 
It  is  thought  that  improved  financial  literacy  is  unlikely  to  significantly  impact  upon  the 
payment account market and would not solve consumers’ problems across the board. In any 
event, research48 carried out for the Commission in 2010 concluded that it was doubtful that 
the lack of financial literacy – in particular lack of knowledge – could be effectively tackled 
by a policy intervention in the form of financial education, a view supported by the 2008 UK 
FSA  study49  on  behavioural  economics  and  financial  capability,  and  a  US  study50  on  the 
provision of financial literacy courses in US high schools. The Commission has nevertheless 
sought  to  improve  financial  literacy  amongst  EU  consumers.  In  2007,  the  Commission 
adopted  a  Communication  on  improving  financial  education.51  The  content  of  this 
Communication remains valid today and Member States are encouraged at the European and 

44  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 20. 
45 
2012 Public consultation on bank accounts (see footnote 11), p. 19. 
46  Rapport Inclusion Financière 2011, Réseau Financement Alternatif, 2011, 

http://www.financite.be/financite/recherche,fr,152.html#_tude  
2012 Public consultation on bank accounts (see footnote 11), p. 10.  

47 
48  Consumer Decision-Making in Retail Investment Services, November 2010, p. 40, 

http://ec.europa.eu/consumers/strategy/docs/final_report_en.pdf  

49  Financial Capability: A Behavioural Economics Perspective, Financial Services Authority, p. 7-8 
50  The Impact of Financial Literacy Education on Subsequent Financial Behavior, Lewis Mandell and Linda Schmid Klein, 

2009, p. 17-18, http://www.afcpe.org/assets/pdf/lewis_mandell_linda_schmid_klein.pdf  

51  COM(2007) 808 final. 

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international  level  (e.g.  OECD)  to  make  efforts  to  improve  financial  literacy.  While  the 
Commission  study  mentioned  above  stated  that  policy  intervention  could  not  improve 
literacy,  it  did  conclude  that  simple,  standardised  product  information  could  significantly 
improve  financial  decisions.52  In  addition  and  given  the  limits  of  financial  education,  it  is 
considered  that  objective  and  independent  financial  advice  could  further  help  in  opening  of 
the market of retail financial services, including access to bank accounts, to consumers who 
are distrustful with financial institutions or do not use financial products commonly. 
Second,  the  tying  or  bundling53  of  products  or  services  to  a  current  account  may  also 
influence  consumers'  decisions  relating  to  the  opening  and  switching  of  accounts.  Payment 
accounts  are  "gateway"  products  through  which  consumers  can  access  –  and  providers  can 
sell  –  other  financial  products.  As  according  to  the  World  Bank  report:  "for  most  people, 
having an account serves as an entry point into the formal financial sector. A formal account 
makes  it  easier  to  transfer  wages,  remittances,  and  government  payments.  It  can  also 
encourage  saving  and  open  access  to  credit."54  The  most  recent  EU  data  available55  found 
that there was extensive tying and bundling of current accounts with other products. Almost 
all  banks  in  Hungary,  Latvia,  Lithuania  and  Slovakia  tie  current  accounts  to  consumer  and 
mortgage credits.56 This is mainly caused by current account customers having regular contact 
with providers, and the providers holding high levels of customer-specific information.57 
While  cross-selling,  in  particular  bundling,  can  offer  consumers  benefits  in  the  form  of  a 
better price, tying significantly limits customer mobility.58 These practices can forcibly secure 
consumers' 'loyalty' to a payment account since it may be costly or burdensome to cancel the 
contracts  of  insurance,  investment  or  credit  products  linked  to  the  account.  Low  fee 
transparency and other barriers to mobility59 further enshrine these practices and consumers’ 
reluctance  to  move.  The  most  substantial  impact  on  mobility  in  the  context  of  cross-border 
demand concerned those contracts where a current account was a gateway product.60 
Tying and cross-selling are currently being dealt with in a series of sectoral initiatives that are 
subject to negotiations in the European Parliament and Council.61 The tying and bundling of 
payment accounts to mortgage credits is under discussion in the context of negotiations on the 
Directive  on  credit  agreements  relating  to  residential  property.62  Should  tying  be  forbidden, 
but  bundling  be  permitted  (as  proposed  by  the  European  Parliament  and  supported  by  the 
Commission), this initiative would increase in importance: clear and understandable bank fee 

52  Consumer Decision-Making in Retail Investment Services, November 2010, 

http://ec.europa.eu/consumers/strategy/docs/final_report_en.pdf 

53  Tying occurs when two or more products are sold together in a package, and at least one of these products is not sold 
separately. Tying should not be confused with bundling where financial institutions sell two or more products together 
as a package at a discount despite each product being available separately. Source: SEC(2007) 106, European 
Commission, 31.1.2007, p. 77; Interim report II: current accounts and related services, European Commission, 
17.7.2006, p. 96. 

54  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 11 
55 
Interim report II: current accounts and related services, European Commission, 17.7.2006. 
56 
Ibid. 
57  See for instance, OFT 1282 "Review of barriers to entry, expansion and exit in retail banking", Office of Fair Trading, 

November 2010 (http://www.oft.gov.uk/OFTwork/markets-work/othermarketswork/review-barriers/). 

58  Tying and other potentially unfair commercial practices in the retail financial service sector, CEPS, November 2009, 

http://ec.europa.eu/internal_market/consultations/docs/2010/tying/report_en.pdf  

59  See Section 3.2.2. 
60  Tying and other potentially unfair commercial practices in the retail financial service sector, CEPS, November 2009, 

61 

62 

http://ec.europa.eu/internal_market/consultations/docs/2010/tying/report_en.pdf  
See, for instance, COM(2011) 656 of 20 October 2011, COM(2012) 360/2 of 3 July 2012, and European Parliament 
Economic and Monetary Affairs Committee report on the Commission proposal for a Directive on credit agreements 
relating to residential property of June 2012. 
See European Parliament Economic and Monetary Affairs Committee report on the Commission proposal for a 
Directive on credit agreements relating to residential property of June 2012. 

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information is vital for consumers to take an informed decision as to whether to enter into a 
bundled contract. 
Third,  alternatives  to  payment  accounts  may  deter  some  consumers  from  opening  and  even 
switching  accounts,  thus  limiting  the  size  of  the  problem.  Globally,  e-payments  and  m-
payments  collectively  accounted  for  an  estimated  22.5  billion  transactions  in  2010.63  E-
payments (online payments for e-commerce activities) are expected to grow globally to 30.3 
billion transactions from 17.9 (in 2010-13), while m-payments are expected to grow globally 
to 15.3 billion transactions from 4.6 billion in the same period.64 
Analysis of the different potential substitutes available shows that in their current form these 
substitutes  are  imperfect  and  do  not  enable  consumers  to  access  the  payment  services 
required. For example: 
The UK Paypoint system allows consumers to manage payments in cash to a wide range of 
service providers. However, some of the problems associated with the inability to access a 
payment account identified in Section 3.2.1, notably the reliance on cash (such as insecurity, 
extra time and hassle, difficulties in finding a job or renting a dwelling) would remain. 

• 

• 

It  is  increasingly  common  to  purchase  goods  or  services  via  mobile  phone.  In 
Finland,  Luottokunta,  BookIt  Oy  and  Microsoft  have  developed  a  service  called 
iSMS® that enables users to pay for purchases by mobile, domestically and abroad. 
As  a  result,  50%  of  Finns  use  their  mobile  phone  for  payments.65  However,  it  is 
unclear whether such a system could work without a link to a payment account (or at 
least a credit card) and whether the information stored on a mobile phone could be 
recovered  if  the  phone  were  lost.  In  some  instances  consumers  cannot  use  mobile 
phones to make payments as a credit contract may be required. There are also data 
security  concerns  regarding  mobile  phone  transactions  and  risks  of  abusive  use  of 
information  about  consumers'  purchasing  habits.66  In  light  of  these  issues,  it  is 
perhaps  unsurprising  100%  of  Finns  maintain  payment  accounts,  illustrating  the 
complementary  rather  than  substitutive  nature  of  mobile  phones  as  a  means  of 
payment.67  

Finally,  pre-paid  cards  permit  consumers  to  make  certain  types  of  electronic 
payments  without  a  payment  account.  They  do  have  major  drawbacks,  offering  a 
limited range of services, and many traders do not accept them. The most common 
pre-paid cards do not allow their holder to transfer money or to pay bills via direct 
debit  or  standing  order.  Receiving  money  via  a  bank  transfer  may  not  always  be 
possible.  Such  cards  can  be  a  costly  solution  because  of  the  top-up  and  usage  fees 
applied. The cost of loading the card can be a flat fee or a percentage of the loaded 
amount.  It  is  more  expensive  if  done  with  cash  (e.g.  £ 1  per  top  up  or  3%  of  the 
loaded amount in average in the UK; EUR 3 per top up for some cards in Belgium or 
1% of the loaded amount for some cards in Spain).68 Application, maintenance and 
replacement  fees  vary;  while  the  Belgium  pre-paid  cards  are  obtained  for  free, 
maintenance  costs  are  EUR 12  per  year.69  A  card  in  France  costs  EUR 49  when 

Ibid. 
http://www.businesswire.com/news/home/20101219005008/en/BookIT-Oy-50-Finns-Mobile-Phone-Bookings 
http://www.nytimes.com/2012/04/29/sunday-review/the-post-cash-post-credit-card-economy.html 

63  World Payments Report 2011, CapGemini. 
64 
65 
66 
67  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012. 
68 
69 

http://www.moneysavingexpert.com/cards/prepaid-cards;  
http://www.bpost.be/site/fr/residential/finance/bpaid/index.html;  

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• 

applying  for  it  and  EUR 12  when  replacing  it  but  has  no  maintenance  costs.70 
Transaction  costs  also  exist.  Some  cards  charge  the  user  a  percentage  of  the 
purchased amount (e.g. 2.95% for an Irish prepaid card).71 Withdrawing money from 
an ATM machine will cost the user of a Belgian card EUR 1.5 per withdrawal and 
2% of the withdrawn amount to the user of a French card. Even not using it may be 
expensive: Irish prepaid cards charge an inactivity fee of EUR 3.50 a month after 2 
months of no usage.72 Prepaid cards are both imperfect substitutes and an expensive 
means of payment. 

It  may  be  argued  that  in  societies  reliant  on  cash  transactions,  e.g.  Romania  and 
Bulgaria, access to payments accounts is not as essential: consumers can use cash as 
a  substitute.73  This  situation  is  changing  quickly.  In  developed  EU  countries,  the 
proportion  of  cash  transactions  has  decreased:  "The  evolvement  of  the  cashless 
society has been increasing in Finland in retail purchases along with other Nordic 
countries and along plans by the banking industry".74 Similarly, in central European 
Member  States,  electronic  payments  have  started  to  prevail:  "the  variable  costs  of 
cash, paper-based and postal payment instruments are so high that their substitution 
with  electronic  transactions  generally  results  in  social  savings  and  therefore 
Hungarian  society  can  realise  savings  by  the  shift  in  the  direction  of  cash-free, 
electronic  payments  which  we  have  assumed."75  Furthermore,  in  some  Member 
States  there  are  limits  in  terms  of  the  cash  volume  that  merchants  can  accept.  In 
Slovenia,  traders  are  unable  to  accept  more  than  EUR 15 000  in  cash.76  Similar 
restrictions exist in Belgium, Italy, France and the Netherlands.77 This shift towards 
electronic payments will have increasingly significant implications for those without 
access to electronic banking facilities. 

As demonstrated in Graph III, there are clear  trends  in  payment  methods.  From  2000-2010, 
one  can  observe  a  steady  growth  of  the  use  of  card  payments,  credit  transfers  and  direct 
debits. Use of cheques is declining. 

Graph III: Number of payment transactions per year in the EU (in million) 

http://www.corpedia.fr/index.html 
http://www.moneyguideireland.com/category/prepaid-debit-cards 
Ibid. 

70 
71 
72 
73  Basic banking services, London Economics for European Parliament's Committee on the Internal Market and Consumer 

Protection, November 2011, p. 11. 

74  Costs of retail payment instruments for Finnish banks, Bank of Finland, 23.12.2011, p. 5. 
75  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary, p. 

96. 
Ibid. 
Ibid. 

76 
77 

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Source: ECB payments data. 

Romania  and  Bulgaria  will  follow  this  trend  shortly.  Although  there  is  no  hard  data 
demonstrating the decreasing  role  of  cash in these countries,  the increased  use of electronic 
payment means, such as debit and credit cards (substitutes for cash) suggest this is the correct 
conclusion to reach. 

Graph IV: Number of transactions by all cards (in millions) 

Source: ECB payments data. 

There are, moreover, ongoing and planned measures that risk further exacerbating some of the 
negative  consequences  of  remaining  unbanked.  These  include  Member  States'  deficit 
reduction and public sector efficiency policies, anti-fraud measures, or a combination of these. 
Measures  to  forbid  payment  of  salaries  or  social  benefits  in  cash  (e.g.  Belgium78)  and  to 
reduce the minimum amount that can  be paid in cash (e.g. Belgium79, Spain80, Italy81) have 
been announced recently. These will render unbanked citizens' lives more difficult in future. 
Consequently,  the  substitutes  outlined  are  not  an  adequate  alternative  to  a  basic  payment 
account, and do not counter the problem of economic exclusion. 
Fourth, stakeholders (particularly the financial services industry) state that they may refuse to 
open  an  account  for  a  consumer  due  to  anti-money  laundering  rules.82  However,  the 
Commission  concludes  in  its  analysis  of  the  EU  anti-money  laundering  Directive,  that  the 
Directive in itself does not create any barriers to opening accounts. Member States' analyses 
of national money laundering rules have reached similar conclusions: anti-money laundering 
provisions do not require a person who wishes to open a bank account to produce an ID card 
or passport. Article 8 of Directive 2005/60/EC on the prevention  of the  use of  the financial 
system for the purpose of money laundering and terrorist financing states that: "Customer due 
diligence  measures  shall  comprise  identifying  the  customer  and  verifying  the  customer's 
identity  on  the  basis  of  documents,  data  or  information  obtained  from  a  reliable  and 
independent source."83 Similarly, a report by the Financial Action Task Force (FATF) states 
that:  "countries'  laws  or  regulations  generally  do  not  distinguish  the  types  of  customer 
information  to  be  collected".84  However,  "although  a  passport  or  ID  Card  is  one  of  the 
methods used to verify the identity of customers in a majority of countries, it should be noted 
that  the  FATF  standards  (on  which  the  EU  anti-money  laundering  rules  are  based)  does 

http://www.lavenir.net/article/detail.aspx?articleid=DMF20120504_00154656 
http://www.droitbelge.be/news_detail.asp?id=693 
http://www.abc.es/20120413/economia/abci-fraude-fiscal-consejo-ministros-201204131356.html 
http://www.businessweek.com/magazine/italys-cap-on-cash-payments-12082011.html 
2012 Public consultation on bank accounts (see footnote 11), p. 18-19.  

78 
79 
80 
81 
82 
83  Directive 2005/60/EC of 26 October 2005, L 309/15, Article 8. 
84  Anti-money laundering and terrorist financing measures and financial inclusion, Financial Action Task Force, 2011, 

p. 27. 

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allow countries to use other reliable, independent source documents, data or information".85 
The  FATF  report  further  emphasises  that  the  pursuit  of  financial  inclusion  and  effective 
money-laundering  regimes  are  complementary  and  "measures  that  ensure  that  more  clients 
use  formal  financial  services  increase  the  reach  and  effectiveness  of  the  anti-money 
laundering controls."86 
The  FATF  report  acknowledges  that  "a  customer  lacking  a  government  issued  form  of 
identification,  for  example,  may  result  in  a  financial  institution  using  other  more  costly 
methods to verify identification, which could be a disincentive to serve certain customers."87 
This is supported by evidence from users' representatives who note that banks use anti-money 
laundering rules to reject applications from unattractive consumers.88 In short, it is financial 
institutions' internal processes that create 'false barriers'. 
Fifth, it has been argued89 that these differing levels of payment account penetration can be 
linked to the level of development of banking infrastructure.90 The underdevelopment of the 
banking  sector  in  certain  countries  or  regions,  e.g.  in  Romania  and  Bulgaria,  may  restrict 
consumer mobility and choice. Elderly people, unfamiliar with online banking, may not open 
an  account  when  there  is  no  local  branch.91  Therefore  it  can  be  assumed  that  together  with 
economic growth of these regions, banking infrastructure will also improve thus allowing for 
easier access of consumers to bank accounts. On the other hand, studies have been unable to 
demonstrate  a  link  between  account  penetration  and  the  availability  of  banking  facilities.92 
Thus, despite having few bank branches per 10 000 people, Estonia, the Netherlands, Sweden 
and the United Kingdom have high levels of payment account penetration.93 However, this is 
partly due to the widespread use of internet by consumers to manage their bank accounts in 
these  countries,  which  limits  the  importance  of  branch  networks  since  almost  all  banking 
transactions and operations can be made directly on-line or by means of a telephone operator. 
The development of internet banking can substantially facilitate and improve access to bank 
accounts,  in  particular  for  those  consumers  who  have  an  easy  access  to  internet  and  do  not 
find it difficult to use on-line banking applications and software. While it can be assumed that 
generally  such  consumers  do  not  face  access  problems  and  can  open  any  bank  account 
(regular or on-line) relatively easily, vulnerable consumers face a different reality. These are 
low-income  groups,  elderly  people  or  people  suffering  from  social  exclusion  who  have  no 
regular access to internet and simply would not be able to benefit from a bank account which 
is available only via internet. 
Sixth, it can be assumed that increasing income levels of consumers in the EU in parallel with 
the economic growth will encourage even more common use of retail financial products and, 
as a result the number of unbanked consumers will 'naturally' decrease. 

Ibid. 
Ibid. 
Ibid. 

85 
86 
87 
88  Financial Services User Group (FSUG) response to the 2012 Public consultation on bank accounts (see footnote 11), p. 

13. 

89  See responses from consumer and civil society representatives in the 2012 Public consultation on bank accounts (see 

footnote 11), p. 18. 

90  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 20 
91  See responses from consumer and civil society representatives in the 2012 Public consultation on bank accounts (see 

footnote 11), p. 18. 

92  See for example, Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final 

Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 14, 
http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 
for Strategy and Evaluation Services (CSES), July 2010, Ibid, p. 14-15 

93 

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Finally,  the  trust  (or  lack  thereof)  of  consumers  vis-à-vis  the  banking  sector  may  affect  the 
bank-client  relationship.94  According  to  a  survey,  50%  of  European  respondents  admit  that 
their confidence toward the banking industry has decreased over the past 12 months.95 Neither 
of the latter issues is within the scope of this impact assessment.   
To conclude this section, it is of note that a right of access to basic banking services is already 
recognised  in  some  OECD  countries.  In  2003  Canada  introduced  Basic  Banking  Services 
Regulations  to  ensure  that  basic  banking  services  are  available  to  all  individuals,  including 
foreigners who are legally resident in Canada.96 In order to open a basic payment account, a 
consumer  is  required  to  present  at  least  one  identity  document  from  a  list  provided  by  law. 
The bank can reject the consumer's request based on limited and clearly specified grounds and 
has to justify  the  reason in writing, and must inform the consumer as to how to contact the 
regulator. Apart from a basic payment account, under the Basic Banking Services Regulation, 
a consumer has access to basic payment means. 

3.2. 

Problems 

3.2.1.  Access to basic account services 

It is difficult to estimate the number of consumers without a payment account, since much of 
the  data  available  is  not  comparable,  though  research  estimates  the  number  of  EU  citizens 
with no payment account at between 30 and 68 million.97 Calculations based on World Bank 
data put the figure at 56 million.98 99 These figures probably underestimate how many citizens 
remain  unbanked:  the  data  is  survey-based,  and  national  data  confirms  that  many  unbanked 
consumers are unlikely to participate in such surveys. 

Table 2: Size of the problem (EUR, millions, 2011 data) 

Consumers with 
no payment 
account 

 don't have one 

EU 
Of which 
mobile 
Of which 
vulnerable 

56 

4 

53 

25 

2 

23 

have been 
refused 

Consumers who would like an account, but 
have been 
refused due to 
inadequate 
documentation 
0.56 

have been 
refused due to no 
regular income 

1.12 

2.80 

0.18 

2.63 

0.04 

0.53 

0.07 

1.05 

have been refused 
for other reasons 

1.12 

0.07 

1.05 

Sources: Commission calculations based on 2011 data from World Bank, Eurobarometer 2012 and Eurostat. 

Based on Commission calculations, there are almost 3 million EU consumers who requested a 
bank account but were refused one either due to irregular income (40% of them), inadequate 
documentation (20%), or other reasons (40%) (See Table 2). There are also many unbanked 
consumers (22.2 million) who would like a bank account but have not attempted to open one. 
This very high figure  results  from  the  fact  that many consumers, in particular less-educated 

94 
2012 Public consultation on bank accounts (see footnote 11), p. 19. 
95  Global consumer Banking Survey 2011, Ernst&Young, available at: 

http://www.ey.com/Publication/vwLUAssets/A_new_era_of_customer_expectation:_global_consumer_banking_survey/
$FILE/A%20new%20era%20of%20customer%20expectation_global%20consumer%20banking%20survey.pdf  

96  Department of Justice, Canada, http://laws-lois.justice.gc.ca/PDF/SOR-2003-184.pdf 
97 

Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 
for Strategy and Evaluation Services (CSES), July 2010, p. 14, estimated that 30 million Europeans over the age of 18 
do not have a payment account. Calculations based on the Special Eurobarometer on Retail Financial Services 
(European Commission, February 2012) put the number of Europeans over the age of 15 without a current account at 
more than 68 million. Differences between the 2010 and 2012 calculations can be attributed to the scope of the question 
asked by the surveys and divergences in the population sample. 

98  Commission calculations based on data on the number of unbanked consumers from Measuring Financial Inclusion, 

99 

The Global Findex Database, World Bank, April 2012. 
It should be noted that whereas there are few data on individuals’ access to a payment account, there is even fewer 
research and data on households, which make it a less reliable basis on which to base a policy. 

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parts  of  society,  believe  a  bank  account  is  not  accessible  for  consumers  living  on  a  low  or 
irregular income. They consider it a costly and complex product and refrain from attempting 
to  open  a  bank  account,  even  when  they  would  like  one.  Some  unbanked  consumers  are 
unaware  that  they  have  the  right  to  open  a  basic  payment  account  at  low  cost  (in  some 
Member States) because they are not informed about it. In Belgium, despite the fact that there 
is  a  legal  right  to  a  basic  account,  63%  of  those  without  an  account  surveyed  in  2011 
considered  that  the  bank  would  reject  their  application.  It  is  therefore  essential  to  reach 
unbanked consumers with public campaigns, as stipulated by the Recommendation on access 
to  a  basic  payment  account,  informing  them  about  the  availability  of  this  product,  which  is 
strongly  advocated  by  consumers'  representatives.  The  above-presented  figures,  however, 
most likely underestimate the size of the problem as they are survey based and many excluded 
consumers are unlikely to participate in such surveys. Available national data confirms this. 
According  to  a  recent  UK  Financial  Inclusion  Task  Force  research,  52%  of  the  unbanked 
consumers in the UK would like to have an account. The size of the problem varies between 
Member  States.  In  Romania  and  Bulgaria,  45%  and  53%  of  consumers  respectively  have 
current  accounts;  in  Scandinavia,  the  figure  is  close  to  100%  (see  Graph  V).100  In  terms  of 
volume, Italy and Romania have more than 13 million citizens aged over 15 without payment 
accounts between them, while Denmark and Luxembourg have few unbanked citizens.  
Although in the majority of Member States, representatives of the financial services industry 
argue that a very small percentage of consumers are unbanked, these figures can be higher in 
actual terms. In Germany, while just 2% of consumers are unbanked, this equates to almost 
1.5 million people.101 

Graph V: EU citizens with a payment account 

Source: Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012. 

The  low  levels  of  access  in  Romania  and  Bulgaria  may  be  caused  by  the  broader 
unavailability  of  basic  banking  services,  or  by  consumers'  preference  for  using  cash.102 
However, as mentioned in the analysis of problem drivers above, the share of cash in payment 
transactions  is  decreasing  steadily  and  this  downward  trend  is  likely  to  continue  in  the 
foreseeable  future.  In  those  EU  countries  with  more  developed  banking  systems,  such  as  in 
Scandinavia103 or Central Europe104, the share of cash payment transactions is decreasing, not 

100  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012. 
101  Commission calculations based on World Bank and Eurostat data. 
102  Basic banking services, London Economics for European Parliament's Committee on the Internal Market and Consumer 

Protection, November 2011, p. 11 

103  Costs of retail payment instruments for Finnish banks, Bank of Finland, 23.12.2011, p. 5. 

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just for consumers' convenience but also due to high cost of cash for providers. Some Member 
States also have limits in terms of the cash volume that merchants can accept; e.g. Slovenia, 
Belgium, Italy, France and the Netherlands.105 
Many of those without a payment account say they do not need or want one.106 These people 
are  predominately  older:  65%  of  unbanked  people  over  55  say  this,  as  do  69%  of  retired 
people.107  This  response  is  also  more  common  among  those  with  less  education,  including 
66% of people who left school aged 15 or under.108 Many in these groups are unaware of the 
potential  benefits  payment  accounts  can  bring,  e.g.  cheaper  payments  transactions,  lower 
security  risks,  easier  receipt  of  benefits  and  lower  risk  of  tax  fraud.  In  this  respect,  as 
underlined  by  the  recent  European  Parliament  Resolution,  "financial  education  pointing  out 
the advantages of financial inclusion is important"109, as a complementary measure to tackle 
financial  exclusion,  the  view  which  is  shared  by  the  financial  industry.110  Psychological 
factors may help explain the apparent reluctance of these groups to open an account, including 
perceptions  about  prices,  bureaucratic  complications,  etc.  This  is  confirmed  by  World  Bank 
data which finds that "a formal account is not costless in most parts of the world and may be 
viewed as unnecessary by a person whose income stream is small or irregular".111 
Sharing another's payment account is a further common reason why some consumers have no 
account, especially  for those who use 'household' accounts, particularly women.112  With  the 
changing structure of families and family roles, this is less likely to be the case in the future; 
for example, in countries such as Sweden and the Netherlands, consumers did not report the 
use of shared accounts.  
Finally, as many as one third of 15-24 olds believe that they are too young for an account.113 
These  consumers,  despite  stating  that  they  do  not  want  an  account,  could  still  potentially 
benefit  from  improved  access  and  cheaper  accounts.  Beyond  this,  managing  a  payment 
account has an important role in promoting independence and financial literacy. 

Graph VI: Reasons for not having a payment account 

104  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary, 

p. 96. 
Ibid. 

105 
106  56% of people without an account state that they do not need or want one. Special Eurobarometer on Retail Financial 

Services, European Commission, February 2012, p. 31, http://ec.europa.eu/internal_market/finservices-
retail/policy_en.htm. 

107  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p. 29, 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm  
Ibid. 

108 
109  European Parliament Resolution 2012/2055(INI). 
110  European Banking Federation response to the 2012 Public consultation on bank accounts (see footnote 11), p. 13. 
111  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 3. 
112  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p. 29 
113 

Ibid. 

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Source: Eurobarometer 

Despite a number of consumers believing that they do not need an account, it is estimated that 
around  half  of  those  without  an  account  would  like  one.114  33%  (10 million  consumers;  of 
which  almost  4 million  are  in  Romania)  of  those  without  an  account  in  EU12  and  55% 
(15 million consumers, of which more than 7 million are in Italy) of those without an account 
in the EU 15 would like one. As indicated above, 52% of the unbanked consumers in the UK 
would like to have an account.115Accessing an account is particularly difficult for two main 
population groups: 'vulnerable' consumers and 'mobile' consumers. This observation has been 
explicitly confirmed by the European Consumer Organisation BEUC in their feedback to the 
consultation on bank accounts.116 

• 

• 

Vulnerable consumers. Those with few economic resources (such as people on low 
incomes or the unemployed). This is a sizeable part of the EU population; in 2010, 
23.4%  of  the  EU  population  was  at  risk  of  poverty  or  social  exclusion.117  These 
consumers are more likely to be financially excluded than other groups.118 Based on 
Commission  calculations,  there  are  almost  3  million  EU  consumers  who  have 
requested  a  bank  account  but  have  been  refused  due  to  irregular  income  (40%), 
inadequate  documentation  (20%),  or  other  reasons  (40%)  (see  Table  2)  while 
according  to  the  World  Bank  report  "Inclusive  financial  systems  –  allowing  broad 
access  to  financial  services,  without  price  or  non-price  barriers  to  their  use  –  are 
especially likely to benefit poor people and other disadvantaged groups."119 

Mobile consumers. Consumers move cross-border for various reasons including for 
work, study or retirement. Migrant workers are probably the largest mobile group. In 
2010,  12.3 million  EU  citizens  resided  in  another  Member  State,  up  from  11.9 

114  Commission services calculations based on Eurostat, Measuring Financial Inclusion, The Global Findex Database, 

World Bank, April 2012, and Special Eurobarometer on Retail Financial Services, European Commission, 
February 2012. The World Bank data on the percentage of consumers ( > 15 years) without a payment account and 
Eurostat data on the size of the population (> 15 years), the number of consumers without payment accounts is 
calculated for each Member State. Eurobarometer data is then used to calculate the number of consumers in each 
Member State who would like an account. 

115  Banking services and poorer households, Financial Inclusion Task Force, December 2010, p.6. http://www.hm-

treasury.gov.uk/d/fin_inclusion_taskforce_poorerhouseholds_dec2010.pdf 

116  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 20. 
117  http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-08022012-AP/EN/3-08022012-AP-EN.PDF 
118  Financial Services Provision and Prevention of Financial Exclusion, European Commission, March 2008, 

http://ec.europa.eu/employment_social/spsi. Other 'vulnerable' factors are also indicated, such as being retired or unable 
to work, being a student as well as, to a lesser extent, age, gender and type of locality lived in. 

119  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 1 

EN 

26 

   EN 

 
                                                 
million  the  previous  year.  120  This  includes  more  than  half  a  million  students  (of 
which  over  210 000  are  Erasmus  students)121  who  study  in  other  Member  States, 
(foreign students are not normally considered residents).122 This population is rising, 
with  the  number  of  Erasmus  students  alone  increasing  annually  by  7.4%.123  This 
figure  also  excludes  all  other  non-resident  EU  migrants  such  as  seasonal  or 
temporary  workers.  The  number  of  non-resident  migrants  is  estimated  at  between 
1.9 and 3.8 million.124  Combined, 
is 
approximately  15.8  million.125  126This  excludes  20.2 million  migrants  from  outside 
the EU.127 

total  mobile  EU  population 

then, 

the 

• 

According  to  calculations  by  Commission  services,  the  mobile  population  with 
access  issues  amounts  to  3.5 million  people,  or  approximately  6.25%  of  those 
without a payment account. It can be estimated that 0.18 million mobile consumers 
who face difficulties in accessing basic account  services would  like an  account but 
have been refused (See Table 2), of which  around 70 000 of have been  refused for 
reasons other than inadequate documentation. 

The reasons why consumers cannot access an account vary across the EU. The consequences 
of  lack  of  access  are  significant  for  all  stakeholders  and  for  the  efficient  functioning  of  the 
single market as a whole. These consequences are described in Section 3.4 and in more detail 
in Annex II. 
Ineffective, inconsistent or non-existent regulatory framework 
The Commission asked Member States to comply with the provisions of the Recommendation 
by  January 2012.  The  Recommendation  also  stated  that  "the  Commission  will  monitor  and 
assess the Measures taken by 1 July 2012."128 To this end, in August 2012, the Commission 
published  a  report  presenting  an  overview  of  Member  States'  compliance  with  the 
Recommendation.129  The  Recommendation  stated:  "the  Commission  will  propose  any 
necessary  action,  including  legislative  measures  if  needed,  in  order  to  ensure  that  the 
objectives of this Recommendation are fully met."130 

Table 3: Size of the problem (millions) 

120  Eurostat data on total population and resident non-national population by group of citizenship 

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Migration_and_migrant_population_statistics  

121  Erasmus, facts, figures and trends, European Commission, 2011. 

(http://ec.europa.eu/education/pub/pdf/higher/erasmus0910_en.pdf) 

122  Eurostat data on tertiary education students studying in another EU country: there were 581 400 EU students enrolled at 

foreign universities in another EU Member State in 2010. 

123  Erasmus, facts, figures and trends, European Commission, 2011, p. 4. 
http://ec.europa.eu/education/pub/pdf/higher/erasmus1011_en.pdf. 
124  Commission staff working document Demography Report 2010, p. 86. 

http://epp.eurostat.ec.europa.eu/portal/page/portal/population/documents/Tab/report.pdf  

125  For the purposes for calculation, it is assumed that the number of non-resident migrants is 3 million people. 
126  http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Total_population_and_resident_non-

national_population_by_group_of_citizenship,_2010-de.png&filetimestamp=20120713140446 and Commission staff 
working document Demography Report 2010, p. 46. 
http://epp.eurostat.ec.europa.eu/portal/page/portal/population/documents/Tab/report.pdf 

127

  http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Total_population_and_resident_non-
national_population_by_group_of_citizenship,_2010-de.png&filetimestamp=20120713140446 

128  Commission Recommendation 2011/442/EU (see footnote 3), recital (19). 
129  National measures and practices as regards access to basic payment accounts. Follow-up to the Recommendation of 18 

July 2011 on access to a basic payment account. 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/followup_en.pdf  

130  Commission Recommendation 2011/442/EU (see footnote 3), recital (19). 

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27 

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No of people 
with no account 

No of people who 
would like an 
account (but don't 
have one) 

Belgium 

Bulgaria 

Czech Republic 

Denmark 

Germany 

Estonia 

Ireland 

Greece 

Spain 

France 

Italy 

Cyprus 

Latvia 

Lithuania 

Luxembourg 

Hungary 

Malta 

Netherlands 

Austria 

Poland 

Portugal 

Romania 

Slovenia 

Slovakia 

Finland 

Sweden 

0.27 

3.04 

1.71 

0 

1.42 

0.03 

0.21 

2.13 

2.74 

1.59 

15.12 

0.1 

0.19 

0.72 

0.02 

2.3 

0.02 

0.14 

0.22 

9.73 

1.72 

9.99 

0.05 

0.92 

0 

0.08 

0.19 

0.7 

0.58 

0 

1.08 

0.02 

0.05 

0.98 

1.04 

1.46 

7.71 

0.03 

0.04 

0.2 

0.02 

0.37 

0.01 

0.08 

0.18 

3.31 

0.81 

3.99 

0.02 

0.23 

0 

0.04 

United Kingdom 

EU 

1.55 

56.03 

0.97 

24.65 

Response by Member States to the Recommendation 

Action taken/to be taken 

Partial legal framework enough 
but review launched. 

Partial self-regulation under 
consideration. 

Law in line with 
Recommendation adopted 2012. 

Partial self-regulation adopted 
April 2012. 

Partial self-regulation under 
consideration. 
Guidelines exist but compliance 
is optional. 

Proposals for legislation 
forwarded to the Parliament. 

No intention to take further 
action 

Law in line with Recommendation 

No problem. 

No problem. 

Partial legal framework enough at 
present. 
Partial legal framework enough. 
Partial self-regulatory framework 
enough. 

No action planned. 

Law in line with Recommendation 

No problem. 

No problem. 

Partial legal framework enough. 

Partial legal framework enough. 

No problem. 
Partial self-regulatory framework 
enough. 
No problem. 

No problem. 

Partial legal framework enough. 
Partial self-regulatory framework 
enough. 
Partial self-regulatory framework 
enough. 

Source: Commission calculations based on data from World Bank, 2012 Eurobarometer and Eurostat. 

Although  representatives  of  the  financial  services  industry  argue  that  measures  have  been 
adopted and are adequately enforced,131 as illustrated by reports by the European Commission 
and  Parliament132  as  well  as  feedback  to  a  public  consultation133,  the  Recommendation's 
application  is  far  from  satisfactory.  A  legal  framework  exists  to  facilitate  access  to  basic 
account  services  in  Belgium,  France  and  Italy,  while  partial  regulatory  or  self-regulatory 
regimes  are  in  place  in  Portugal,  Denmark,  Estonia,  Finland,  Lithuania,  Luxembourg, 

131  2012 Public consultation on bank accounts (see footnote 11), p. 20.  
132  European Parliament Resolution 2012/2055(INI) p. 5, "not all Member States have taken adequate action required by 
Commission Recommendation 2011/442/EU of 18 July 2011 on access to a basic payment account and too many 
Member States still have no legal or voluntary requirement for providers to offer basic payment services". 

133  See consumer, civil society and some Member States' responses to the 2012 Public consultation on bank accounts (see 

footnote 11), p. 20. 

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28 

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Sweden,  Germany,  Hungary,  Ireland,  Netherlands, and the UK. Of these countries,  Estonia, 
Finland,  Ireland,  Lithuania,  Luxembourg,  Netherlands,  Sweden  and  the  UK,  (who  together 
account for about 2.8 million citizens without a payment account – equivalent to almost 5% of 
the  EU  total),  do  not  intend  to  take  any  further  action  arguing  that  their  partial  frameworks 
suffice.134  No  framework  exists  at  all  in  the  remaining  Member  States:  Austria,  Bulgaria, 
Cyprus,  the  Czech  Republic,  Latvia,  Malta,  and  Slovenia.  These  countries  do  not  plan  on 
taking any action in response to the Recommendation, arguing that there is no problem, even 
though they together account for about 5.3 million unbanked citizens which is equivalent to 
almost 10% of the total EU population without a bank account. Furthermore, in the Member 
States  where  only  self-regulatory  measures  have  been  or  are  planned  to  be  adopted,  i.e. 
Ireland,  the  Netherlands,  Finland,  UK,  Greece,  Hungary  and  Poland,  there  are  altogether  as 
many as 16.14 million consumers without a bank account. On the other hand, the example of 
Belgium which has a legal framework on access to basic bank accounts in place since 2003 
demonstrates  that  such  an  approach  efficiently  tackles  financial  exclusion.  According  to  the 
"Rapport Inclusion Financière 2011",135 following the adoption in 2003 of the law introducing 
the right to a basic bank account for every consumer who did not already hold an account, the 
number  of  unbanked  consumers  fell  from  40  000  to  only  10  000  in  2005.  Furthermore,  the 
number  of  persons  who  were  refused  basic  bank  accounts  in  the  country  decreased 
significantly  between  2007  and  2009  as  presented  in  the  table  below,  demonstrating  the 
efficiency of the measure.136   

Table 4: Number of refusals to open a basic bank account - Belgium 

Number of refusals to open a basic bank account  

2007 

290 

2008 

164 

2009 

82 

2010 

Not available 

Source: Réseau Financement Alternatif, Rapport Inclusion Financière 2011 

Whilst the financial services industry argues, (based on very heterogeneous data), that "there 
is  no  proven  correlation  between  the  existence  of  a  legal  obligation  to  provide  access  to  a 
bank  account  and  the  number  of  bank  account  holders"137,  a  legal  framework  presents  the 
definite advantage of being enforceable. 
One  nevertheless  needs  to  acknowledge  that  even  where  a  framework  on  access  to  bank 
accounts  exists,  it  is  not  necessarily  effective.138  In  particular,  consumer  and  civil  society 
representatives  in  the  most  recent  public  consultation,  underlined  that  self-regulatory 
initiatives  have  had  limited  success.139  Amongst  those  with  a  legal  framework,  only  six 
countries  comply  even  partially  with  the  Recommendation  (France,  Belgium,  Italy, 
Luxembourg, Portugal and Finland). Low effectiveness is caused by several factors including 
consumers lacking awareness of their rights (despite information obligations for providers and 
Member  States  under 
incomplete  and  divergent 
application  of  the  Recommendation  (e.g.  in  Belgium,  France,  Italy  and  Portugal  the 
characteristics  and  conditions  of  the  basic  account  are  defined,  in  others,  such  as  Denmark, 
Finland,  Luxembourg  or  Sweden  not,  creating  a  regulatory  patchwork  for  consumers  and 
business alike) and recent developments in the legal framework, e.g. Italy has only recently 
implemented a legal framework in line with the Recommendation. 

the  Recommendation), 

inadequate, 

134  Based on information provided to the Commission by Member States for the report on national measures and practices 
as regards access to basic payment accounts. Follow-up to the Recommendation of 18 July 2011 on access to a basic 
payment account. Figures calculated by Commission services based on World Bank and Eurostat data. 

Ibid, p. 20. 

135  Réseau Financement Alternatif, Rapport Inclusion Financière 2011, p. 16 
136 
137  European Banking Federation response to the 2012 Public consultation on bank accounts (see footnote 11), p. 13. 
138  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 25. 
139  Consumer/civil society responses, in Summary of responses to the public consultation on bank accounts, European 
Commission (http://ec.europa.eu/internal_market/finservices-retail/docs/policy/ba_summary-2012_07_25_en.pdf). 

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29 

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Limited bank profitability from certain groups of consumers 
Misaligned  incentives  between  the  payment  account  provider  and  the  consumer  can  lead  to 
the  rejection  of  a  consumer's  application  for  a  payment  account.  This  is  true  for  vulnerable 
consumers who may be perceived by banks as unprofitable and for many mobile consumers 
on whom there may be little information available. Current accounts are generally offered at 
low cost because they are considered as a gateway product that would allow the bank to earn 
additional  revenues.140  The  probable  duration  of  vulnerable  and  mobile  consumers' 
relationship with the payment services provider is difficult to estimate; hence it is uneconomic 
to make products available to them. In fact, some academics share this view.141  
Limited and more costly access to basic financial products and services 
Feedback from stakeholders, in particular consumer representatives, indicates that the cost of 
basic  payment  accounts  themselves  can  be  prohibitive.142  BEUC  reported  that  in  Italy,  five 
current  accounts  offered  by  banks  as  an  instrument  of  financial  inclusion  were  more 
expensive  than  standard  online  current  accounts.143  In  the  opinion  of  the  World  Bank, 
"worldwide, reducing withdrawal charges and balance fees could make formal accounts more 
attractive  to  more  than  500  million  adults  who  are  without  one."144  Moreover,  a  consumer 
without a payment account will find it more difficult and more expensive to purchase other 
financial products. Since payment accounts are often gateway products, unbanked consumers 
seeking  a  product  such  as  household  insurance  may  be  unable  to  obtain  the  best  value 
product.  The  remaining  services  available  may  be  easily  available  (e.g.  SMS  loans  in  some 
EU  countries)  but  also  more  expensive  (e.g.  high  interest  rates)145  and  may  not  provide  the 
same  level  of  consumer  protection.  Some  academics  argue  that  access  to  "basic  banking 
services….would  be  a  powerful  protection  against  irresponsible  lending  practices  and  […] 
overindebtedness."146 
These problems were underlined in a recent European Parliament Resolution: "access to basic 
payment  services  is  one  of  the  preconditions  for  consumers  to  benefit  from  the  internal 
market,  notably  from  freedom  of  movement,  money  transfer  and  the  purchase  of  goods  and 
services  at  reasonable  transaction  costs;  whereas  basic  payment  services  are  essential  for 
consumers  to  reap  the  benefits  of  e-commerce;  whereas  the  annual  opportunity  cost  of  not 
having  access  to  a  payment  account  is  estimated  at  between  EUR  185  to  EUR  365  per 
consumer; whereas access to basic payment services is, in particular, increasingly becoming 
a  prerequisite  for  social  inclusion  in  terms  of  access  to  employment,  healthcare  and 
housing."147 
Low awareness of availability of basic payment accounts 
In  the  Member  States  with  a  legal  right  to  a  basic  payment  account  (see  Section 3.2.1),  the 
accounts are not actively marketed due to misaligned incentives between the payment account 

140  See, for instance, Tying and other potentially unfair commercial practices in the retail financial service sector, Centre 
for European Policy Studies (CESP), 2009. Understanding and Combating Financial Exclusion and Overindebtedness 
in Ireland: A European Perspective, Georges Gloukoviezoff, p. 9. 

141  Understanding and Combating Financial Exclusion and Overindebtedness in Ireland: A European Perspective, Georges 

Gloukoviezoff, p. 9. 

142  2012 Public consultation on bank accounts (see footnote 11), p. 18.  
143  BEUC response to the Commission Consultation on access to a basic payment account, 25.01.2011, p. 18, 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm 

144  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 4. 
145  See for instance, UK poverty rip-off: The poverty premium 2010 briefing, p. 4; Financial Inclusion for the Roma: 

Banking As a Key to Social Progress, Open Society Foundations, March 2012, p. 3. 
http://www.soros.org/sites/default/files/roma-financial-inclusion-20120321.pdf 

146  Understanding and Combating Financial Exclusion and Overindebtedness in Ireland: A European Perspective, Georges 

Gloukoviezoff, p. 4. 

147  European Parliament Resolution 2010/2278(INI). 

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30 

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provider and the consumer. Providers have an incentive to first offer more expensive accounts 
to their clients.148 In Belgium, 30% of unbanked consumers refer to the excessive price of a 
payment account as the reason for not having one, despite the basic payment account's price 
being  legally  capped  at  around  EUR 14 per year.149  One  possible  explanation  could  be  that 
consumers  are  always  offered  the  more  expensive  product  first.150  In  other  cases,  the 
economic  advantage  of  having  access  to  an  account  and  the  means  of  payments  associated 
with it may not be clear for the consumer, particularly if high fees and penalties are charged 
where,  for  example,  overdraft  facilities  are  used.  This  problem  impacts  primarily  on 
vulnerable  consumers,151  which  is  why  consumer  organisations  advocate  for  clear,  concise 
and  comprehensible  information  on  basic  payment  account  fees  to  be  made  available  to 
consumers.152 
Discriminatory rules on accessing payment accounts 
Asymmetric  information  between  the  credit  institution  and  the  consumer  can  lead  to  an 
application being rejected because the consumer is considered riskier or because information 
on  the  client  is  not  readily  available.  The  lack  of  information  on  consumers  is  a  particular 
problem if the account offers credit related services (e.g. an overdraft facility) as access to the 
credit  history  of  a  foreign  customer  can  also  be  challenging  and/or  costly.  Consumers 
associations state that one of the reasons for consumers to be rejected access to an account is 
the absence of any regular income.153 As stated above, 40% of consumers who would like an 
account and were refused cited this as the reason.154 
An absence  of any regular income  is a key reason why banks reject applicants  for payment 
accounts.  Feedback  from  all  stakeholder  groups,  received  during  public  consultations  also 
identifies  this  as  a  common  problem.155  Examples  include  undischarged  bankrupts  who  are 
refused access to an account by most UK banks, insufficient income, poor creditworthiness, 
overdrawn  bank  accounts  or  the  failure  to  maintain  loan  payments  with  their  main  bank.156 
This  problem  affects  both  vulnerable  and  mobile  consumers  equally.  In  many  cases,  a 
payment account is required in order to be provided with an employment or rental contract. 
Without  an  account,  employment  or  accommodation  contracts  may  remain  unsigned. 
Consequently, consumers may be caught in a vicious cycle in which they cannot enter legal 
employment without an account, but they cannot open an account without a regular income – 
for which they must be employed.  
Another  common  ground  for  refusal  of  mobile  consumers  is  non-residence.  Despite 
increasing  intra-EU  migration,  recent  data  shows  that  only  3%  of  the  EU  population  has 
opened a payment account in another Member State157 though this represents the number of 
EU nationals resident in another Member State.158  In Estonia, France and Austria, one third of 

Ibid. 
Ibid., p. 10.  

148  Le point sur le service bancaire de base, cinq ans après son introduction, Réseau Financement Alternatif, 2008, p. 4. 
149  Rapport Inclusion Financière 2011, Réseau Financement Alternatif, 2011, p. 22. 
150  2012 Public consultation on bank accounts (see footnote 11), p. 18. 
151 
152 
153  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 20. 
154  Calculations by Commission services based on Measuring Financial Inclusion, The Global Findex Database, World 
Bank, April 2012, Special Eurobarometer on Retail Financial Services, European Commission, February 2012 and 
Eurostat population data. 
Ibid., pp. 18/19. 
Ibid., p. 18. 

155 
156 
157  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm. 

158  Commission calculation based on Eurostat data: 

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Total_population_and_resident_non-
national_population_by_group_of_citizenship,_2010-de.png&filetimestamp=20120713140446  

EN 

31 

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refusals were due to the consumer being non-resident. This figure was just over one quarter in 
Belgium and one fifth in Slovakia.159 Similarly, around 60% of Erasmus students who failed 
to  open  an  account  attributed  this  to  "not  being  a  national  resident".160  Feedback  to  the 
Commission during public consultations  also  indicate  that  in  most  cases,  the  legislative  and 
self-regulatory initiatives undertaken in Member States are mostly aimed only at residents.161 
Consequently,  the  residence  requirement  for  opening  an  account  represents  a  significant 
barrier to the internal market by impeding or prohibiting cross-border  activity, for  example, 
through  the  free  movement  of  persons  or  the  free  provision  of  goods  and  services  by 
businesses. 
In order to open an account in some Member States, it is necessary to present identification 
(e.g.  ID  card  or  passport).162  Around  half  a  million  consumers  across  the  EU  have  been 
refused  access  to  an  account  due  to  the  lack  of  appropriate  documentation.  In  some  cases, 
such  refusals  are  attributed  to  anti-money  laundering  legislation.163  In  fact,  users' 
representatives  have  reported  that  banks  often  use  anti-money  laundering  rules  abusively  to 
reject applications from unattractive consumers.164 
Low consumer confidence in the financial system 
A  general  mistrust  of  banks  may  also  explain  self-exclusion.  A  2010  study  reported  that 
unbanked  people  perceive  "banks  to  be  intimidating  and  untrustworthy,  interested  only  in 
making  money  out  of  people."165  This  negative  image  of  the  financial  industry  further 
dissuades  unbanked  consumers.  Some  vulnerable  consumers  may  refrain  from  opening  an 
account because of the risk that, if in debt, their balance will be seized. According to a 2010 
report, 10% of French poor households had had their balance seized.166 
Restrictions on the use of basic payment services 
The different characteristics of a basic payment account in different Member States create a 
barrier to the internal market. For example, in the Netherlands, a basic payment account can 
only  conduct  'domestic'  bank  transfers  and  use  'domestic'  ATMs  and  'domestic'  payment 
terminals.167  The  law  in  Belgium  specifies  that  a  basic  payment  account  need  only  permit 
domestic cash withdrawals and the domestic use of a debit card (when a card is provided).168 
In Hungary, credit transfers from a basic payment account can only be made to a Hungarian 
forint  denominated  payment  account  at  another  Hungarian  bank.169  For  mobile  consumers, 
vulnerable consumers and those living in border areas, this represents a significant problem. 
For example,  a  poor  person  or  a student living in Maastricht or Aachen would be forced to 
shop  locally  instead  of  being  able  to  travel  cross-border  to  purchase  cheaper  goods  or 

159  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm. 

160  Commission survey of Erasmus students, 2012. 
161  See, for instance, Feedback from consumer representatives, See feedback statement to the consultation, p. 19. 
162  Rapport Inclusion Financière 2011, Réseau Financement Alternatif. 
163  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 
for Strategy and Evaluation Services (CSES), July 2010, p. 44-45, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study. 

164  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 13. 
165  Financial Inclusion Evidence Review: the costs of banking exclusion and the benefits of access to bank accounts, Claire 

Whyley, 2010, p. 32. 

166  Les conditions d'accès aux services bancaires des ménages vivant sous le seuil de pauvreté, CREDOC, Février 2010. 

http://www.banque-france.fr/ccsf/fr/telechar/publications/ 
rapport_credoc_etude_conditions_acces_services_bancaires_pauvrete.pdf 

167  Based on information provided to the Commission by Member States. 
168 
169 

Ibid. 
Ibid. 

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services.  Moreover,  around  22%  of  newly  banked  consumers  had  shopped  by  telephone  or 
internet since opening their account, with an opportunity to make considerable savings.170 

3.2.2.  Presentation and ease of comparison of bank fees 

Providing clear  and  comparable  information on payment  account offers  is a  prerequisite  for 
the free operation of market forces. The problems discussed below show an inherent level of 
complexity in the features that define payment accounts as well as complex pricing structures, 
which lead to information asymmetries and hinder consumer choice and competition.  
Responses  to  the  public  consultation  indicate  a  general  consensus  among  all  stakeholder 
groups that bank fees are opaque and difficult to understand. While it is difficult to measure 
the  level  of  detriment  caused  by  non-transparent,  incomparable  fee  information,  it  is 
reasonable to assume that all consumers are adversely impacted by these issues. In addition to 
the inherent complexity of fees, which is the root cause of this set of problems, the available 
evidence  collected  focusses  on  two  main  aspects;  how  clear  and  comparable  is  information 
provided to consumers and; how aware consumers are of the fees they are charged. 
Action  to  remove  barriers  to  competition  within  the  internal  market  should  aim  towards  a 
level regulatory playing field for credit institutions and an equal level of consumer protection 
for European citizens. 
A wide range of services and fees 
Payment  accounts  cover  a  wide  range  of  services  and  therefore  charging  structures  may  be 
complex. Table 5 below divides fees into four main categories and provides examples of some 
of those fees.  The frequency  with  which these fees  are  charged  varies  between  one-off  fees 
(e.g.  exceptions  handling)  and  regular,  standard  charges  (e.g.  account  management),  while 
other  fees  are  charged  per  transaction  or  block  of  transactions  (e.g.  payments  and  cash 
utilisation).171  This  makes  bank  charges  difficult  to  foresee  and  monitor  over  a  given  future 
period.  
Understanding fees is vital for being able to compare different bank offers and key for making 
informed  decisions  as  to  which  account  is  most  appropriate  for  one's  needs.  The  evidence 
indicates  that  this  complexity  impacts  upon  a  consumer's  ability  to  understand  what  fees 
represent.  A  study  carried  out  by  the  UK  Office  of  Fair  Trading  in  2008172  concluded  that 
consumers were unfamiliar with key prices associated with their current account. Even when 
aware of prices, consumers had difficulty understanding when and at what level they would 
incur fees. It also appeared that consumers were not able to modify their behaviour when their 
account offered lower than optimal value for money. 
More recent research conducted for the Commission in 2012, aimed to assess how different 
approaches  to  enhance  information  provided  to  consumers  on  bank  offers  and  switching 
impact consumer behaviour.173 The study found that a quarter of respondents (25%) felt that 
they were not well-informed about the cost of their current account. Even though the majority 
of respondents felt they were well informed about prices, when questioned more closely, "six 
out  of  ten  (60%)  never  compare  their  current  account  charges  with  the  charges  of  other 
institutions.  More  interestingly,  29%  say  they  do  not  know  the  monthly  fee  on  their  current 
account fee. A third (32%) do not know how much it costs them to use other banks’ ATMs. A 
third  (33%)  do  not  know  how  much  they  pay  for  statements  sent  by  post.  Seven  out  of  ten 

170  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary, 

p. 27. 

171  Fee structures and frequency of charge may differ as explained in the paragraph "Pricing models" below. 
172  Personal Current Accounts in the UK – An OFT Market Study (2008), p.55. 
173  Bank fees behavioural study, 2012, TNS Opinion Ltd. 

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(70%) do not know the interest rate on their authorised overdraft and 85% do not know the 
unauthorized overdraft rate." 

Core day-to-day 
banking needs 
Account management 

Table 5: Core day-to-day banking needs and products/services
Twenty-three 
products and services 
Current account 
Online banking 
Call centre 

174

Payments 

Cash utilisation 

Exceptions handling 

Cheque 
Debit card 
Credit card 
Branch internal wire transfer 
internet internal wire transfer 
Branch external wire transfer 
internet external wire transfer 
Branch standing order 
internet standing order 
Direct debit 
internet direct debit 
Cash deposit at desk 
Cash deposit at ATM 
Withdrawal at desk 
Withdrawal at bank’s ATM 
Withdrawal at other banks’ ATMs 
Debit card stop payment 
Cheque stop payment 

Source: World Retail Banking Report, 2009 – Cap Gemini 

Pricing models 
The 2007 edition of the World Retail Banking Report175 defined four prevailing 'pure' pricing 
models for payment accounts. The characteristics of each model are summarised in Table 6 
below. Some pricing models appear to have simpler charging structures, (e.g. package based, 
indirect  revenue-based)  than  others  (transaction  based,  account-based).  However,  these 
simpler  pricing  models  –  due  either  to  a  lower  number  of  applicable  fees  or  a  unique  fee 
charge – are generally tied to other fee or interest generating products as is indicated in Table 
3.4, Annex III. 
Price  structures  may  cater  for  specific  socio-demographic  groups  (e.g.  for  students). 
Therefore, it is not surprising that although national markets often exhibit a prevalence of one 
pricing model over others, more than one prevailing model is in use in Belgium, Spain, Latvia 
and the United Kingdom. While this diversity provides a broader choice of products – and is 
not a negative feature in competitive markets – it further illustrates how charging structures 
may add to the complexity of choosing an appropriate product. 

Table 6: Description of 'pure' pricing models for payment accounts 

Account-based 
A range of fees is applied to account management: 
- Could be based on account balance to ensure relative stability or increase non-interest-bearing deposits. 
All other products and services are linked to the current account: 
- Must open a current account before getting day-to-day banking products and other financial products  (savings, credit, mortgages) 
Product and service pricing is based on current account balance. 

Transaction-based 
Fees are applied to transactions, often including any form of: 
- Debit (cheque, money transfer, point-of-service purchase, ATM withdrawal) or credit (deposit at desk, deposit at an ATM, etc.) 
- Fees consist of a fixed amount per transaction, a percentage of the transaction amount, or both: 
A free-of-charge limit may exist; transactions across service channels are aggregated for each statement cycle, and when the transaction limit 
is exceeded, the customer is charged accordingly. 
Package-based 

174  The table comprises the basket of services included in World Retail Banking Report's analysis of account price trends in 

constructing price indices. The list of services is provided above for illustration purposes.  
175  2012 World Retail Banking Report, Cap Gemini, available at: http://www.efma.com/wrbr      

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Similar to account-based model, except that the bank charges an annual fee for a suite of services, rather than just an account: 
- Fees/commissions are directly linked to the bank’s ability to increase cross-selling rates 

Indirect revenue-based 
A majority of day-to-day banking is free of charge 
Income is generated by other types of products, such as credits and savings: 
- Interest spread on credits, as well as a commission to set up credit 
- Interest spread on savings, as well as fees to manage savings account 

Source: World Retail Banking Report, 2007 – Cap Gemini 

Simplicity and transparency of fees 
The presentation of fees and terminology  used  to describe services contribute to the current 
complexity in the payment account market. The terminology used to describe services is part 
of a broader set of activities including branding and marketing and can differentiate a product 
from  those  of  other  market  participants.  The  use  of  different  terminology  by  banks,  while 
referring to the same type of services, may make it difficult to compare bank offers.  
A  study  by  the  European  Commission  published  in  2008,176  found  that  while  two  thirds  of 
financial institutions in the study sample provided fee information on their websites, 69% of 
banks did not provide clear information and further contact was needed to obtain clarifications 
on  the  fees  as  disclosed.  The  difficulties  in  understanding  fees  related  in  part  to  weak 
presentation. Fee terminology was complex; a coherent use of terminology was lacking, even 
on a single bank's website, and information was difficult to read or ambiguous. The lack of 
accurate  information  –  including  omission  of  free-of-charge  services,  incomplete  fee 
information, information that was insufficiently detailed and even different tariffs quoted for 
the same service – added to this difficulty.  
A  study  published  by  the  European  Commission  in  2009177  looked  into  current  account  fee 
structures in banks representing 81% of the market for customer deposits across all Member 
States.178  The  study  sought  to  analyse  and  compare  current  account  prices  and  attempted  to 
measure two dimensions that have an impact on the ability of a consumer to understand fees, 
i.e. simplicity  and transparency. The analysis  indicated that only 34% of banks  in the study 
provided  sufficiently  clear  public  information.  This  confirmed  the  findings  of  the  prior 
Commission study referred to above where the figure stood at 31%. At country level, 56% of 
Member  States  scored  above  average  in  terms  of  simplicity  and  transparency  of  tariffs. 
Thirteen  countries  reported  above  average  scores.179  Graph  VII  below  illustrates  the 
relationship between simplicity and transparency in Member States as measured in the study. 

176  Preparing the monitoring of the impact of the Single European Payments Area (SEPA) on consumers, Van Dijk 

Management Consultants, 2008, p. 17. 

177  Data collection for prices of current accounts provided to consumers, Van Dijk Management Consultants, 2009. 
178  2007 data. 
179  Belgium, Germany, Estonia, Finland, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Portugal, Sweden, Slovenia 

and Slovakia. 

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i
i

y
y
t
t
ci
ci
pl
pl
m
m
Si
Si

10
10

9
9

8
8

7
7

6
6

5
5

4
4

3
3

2
2

1
1

0
0

0
0

Graph VII: Country positioning on simplicity and transparency of tariffs 

LV
LV

LT-NL
LT-NL

BG-RO
BG-RO

BE
BE

SI
SI

EE-FI-MT-SE
EE-FI-MT-SE

AT
AT

UK
UK

IE
IE

DK
DK

LU-PT
LU-PT

CY
CY

DE
DE

SK
SK

CZ
CZ

Average
Average

GR
GR

FR
FR

HU
HU

IT
IT

PL
PL

SP
SP

e
e
g
g
a
a
r
r
e
e
v
v
A
A

1
1

2
2

3
3

4
4

5
5

6
6

7
7

8
8

9
9

10
10

Transparency
Transparency

Source: Data collection for prices of current accounts provided to consumers – Van Dijk Management Consultants (2009) 

It seems that inherent difficulties in understanding payment account features and their price 
structures are compounded by a lack of clear and comparable information on the product. 
Price dispersion in payment accounts within and across Member States 
Wide price variations have been observed for payment accounts180, calling into question the 
degree of price competition in the market. Apart from pure considerations about competition, 
price variations also feed the perception that payment accounts are not fairly priced, denting 
consumer  confidence  and  trust  in  the  sector.  This  is  apparent  in  France  where  only  52%  of 
bank clients consider that the fees charged by their bank are competitive and 68% of clients 
consider  their  fees  to  be  unfair.181  Furthermore,  73%  of  bank  customers  in  France  are 
dissatisfied with the level of transparency of bank fees, of which 22% are very dissatisfied.182 
Bank  fees  are  also  increasingly  an  important  factor  for  consumers  that  are  considering 
switching.  A  2012  report  found  that  fees  ranked  second  in  importance  (2012:  50%,  2011: 
50%) after quality of service (2012: 53%, 2011: 55%) as a factor that leads customers to leave 
a bank.183 The 2009 Commission study184 compared the prices for current accounts in the 27 
Member States, finding very significant variations in prices in absolute terms within, as well 
as across, Member States. 
Customer price discrimination 
Price discrimination occurs between different customers so that their cost for a product with 
comparable features is different. An example of this is the free banking model185 in the United 
Kingdom, which is partially financed through  net interest income arising from deposits, but 

180  The data sources supporting this statement are analysed in Annex III. The data collected is sourced mainly from a 

Commission study, "Data collection for prices of current accounts provided to consumers, 2009, Van Dijk Management 
Consultants", which assessed the degree of transparency in bank fees and provided a comparative analysis of fee levels 
within EU Member States. Additional evidence is provided from studies carried out by Member States (France, Italy). 

181  "Rapport de Georges Pauget et Emmanuel Constans sur la tarification des services bancaires", 07/2010, p.32 

(http://www.ladocumentationfrancaise.fr/var/storage/rapports-publics/ 104000365/0000.pdf)  
Ibid. 

182 
183  World Retail Banking Report, Cap Gemini, 2012. 
184  Data collection for prices of current accounts provided to consumers, Van Dijk Management Consultants, 2009. 
185  This model falls under the "indirect revenue-based" model described in Table 6 above. 

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also  from  fees  for  authorised  or  unauthorised  overdrafts.186  Introductory  pricing  is  another 
common  form  of  price  discrimination  that  weakens  the  relationship  between  the  cost  of 
providing  a  payment  account  and  its  price.  It  adds  another  barrier  to  clear  and  comparable 
bank  offers  and  makes  it  more  difficult  for  a  consumer  to  understand  longer-term  costs 
associated with holding an account.187 
Other forms of price discrimination arise from credit institutions seeking to modify modes of 
consumption,  which  favour  some  customers  and  may  disadvantage  others  both  in  terms  of 
price and convenience: "Banks appear to be using day-to-day pricing strategies to influence 
consumer behaviour rather than to increase revenues; banks cut online and call centre fees, 
for instance, and raised desk operation fees, pointing customers towards automated channels 
for common operations."188 
For the purposes of this impact assessment price discrimination is a factor that contributes to 
the  complexity  of  bank  fees  as  it  makes  fees  more  difficult  to  understand  or  to  compare.  It 
also  adds  another  variable  to  the  elements  that  determine  the  price  of  a  bank  account  and 
therefore  further  weakens  the  relationship  between  the  cost  of  providing  a  service  and  the 
price charged to a consumer. 
Ineffective, inconsistent or non-existent regulatory framework   
The  current  regulatory  framework  covering  presentation  requirements  and  the  ease  of 
comparison  of  fees  varies  widely  across  Member  States,  in  terms  of  their  scope  and  depth. 
While Member States  have  generally adopted requirements for  credit institutions to provide 
consumers with contractual terms and conditions when opening a payment account, many do 
not mandate specific presentation requirements. Specific presentation requirements, including 
standardisation of fee terms are foreseen in Belgium, Italy and Portugal and more recently in 
Spain.  Other  Member  States  have  established  requirements  governing  the  provision  of  fee 
information in the form of lists through legislation or self-regulation. These include Austria, 
Denmark,  Finland,  Germany  and  Luxembourg.  Ex-ante  fee  disclosure  requirements  in  the 
United  Kingdom  focus  on  overdrafts.  Even  in  more  highly  regulated  Member  States 
compliance seems to be problematic in some cases. A market study in France189, reported that 
up  to  42%  of  banks  within  a  sample  of  over  1  746  branches  did  not  make  fee  information 
readily available to consumers as required by French legislation.  
The approach of Member States to the provision of ex-post information also differs widely in 
terms  of  the  scope  of  regulatory  provision,  the  frequency  with  which  information  is  to  be 
provided and the level of detail. For example in France, the banking industry has committed 
to  providing  monthly  summary  statements  of  fees.  In  Austria,  monthly  fees  are  required  by 
legislation.  Detailed  annual  statements  are  required  in  Belgium  and  Germany,  while  in 
Denmark  the  frequency  of  summary  fees  statements  is  agreed  upon  between  the  credit 
institutions  and  client.  Meanwhile  in  Spain  the  requirement  to  provide  bank  statements 
detailing transactions (not fee summaries) has been adopted recently. In the Netherlands, there 
is  a  switching/redirection  service,  but  consumer  information  on  actual  fees  incurred  is 
provided as part of the list of transactions in bank statements, rather than in summary form. 
No  summary  fee  information  is  required  in  Italy.  No  requirements  are  found  in  Bulgaria, 
Latvia, Luxembourg or Portugal. 
Uncoordinated action on the part of Member States results in a non-level playing field within 
the  internal  market  and  further  market  fragmentation  in  retail  banking  within  the  EU. 

Independent Commission on Banking, Final report recommendations, 2011 
Ibid. 

186 
187 
188  World Retail Banking Report, Cap Gemini, 2007. 
189  Tarifs et mobilité bancaires: Le désolant palmarès des banques! UFC- Que choisir, 2010. 

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European  citizens  experience  different  levels  of  consumer  protection  because  of  the  lack  of 
action in some Member States.  
Impact of limitations to cross border mobility for both consumers and suppliers 
Market  fragmentation  in  payment  accounts  –  and  the  retail  banking  market  generally  –  is  a 
barrier  to  the  completion  of  the  internal  market.  Fragmentation  across  the  EU  prevents 
consumers  from  obtaining  the  best  deals  and  inhibits  the  efficiency  of  the  retail  banking 
market. 
The degree of price variation of payment accounts across Member States is discussed above, 
particularly  in  terms  of  its  impact  on  consumer  confidence.  Further  details  about  price 
differentials  across  the  EU  are  provided  in  Annex  III,  drawing  from  at  least  two  sources 
indicating  that  consumers  pay  significantly  different  amounts  for  comparable  services.  A 
Commission study190 also provides insight into the relationship between the cost of a payment 
account and the use of electronic or manual transactions in day-to-day banking, indicating that 
where over-the-counter transactions prevail, prices tend to be more expensive. This indicates 
differences  in  preferences  in  modes  of  banking,  also  points  towards  different  degrees  of 
development of banking infrastructures across the EU, and highlights potential for mobility on 
the supply side as well as on the demand side. 
Switching  is  the  manifestation  of  consumer  choice.  Accordingly,  restrictions  upon  cross-
border switching are closely related to the provision of comparable bank offer information in 
the  EU.  The  problem  section  dedicated  to  switching  describes  mobile  and  non-mobile 
citizens'  difficulties  in  exercising  their  freedoms  within  the  internal  market.  Establishing  a 
right to exercise these freedoms is important, and is dealt with in the dedicated section dealing 
with access to basic payment services. In particular section 3.2.1 above refers to difficulties 
non-residents encounter when seeking to open a bank account.  
While responses to the public consultation from the banking industry did not point towards a 
direct link between opaque fee structures and the challenges banks may face when seeking to 
enter  other  EU  domestic  markets,  a  representative  from  the  banking  industry  with  a 
significant  cross  border  market  presence  highlighted  opening  of  account  procedures  as  a 
major obstacle to the completion of the internal market for payment accounts. This respondent 
noted that opening of account procedures currently discriminate against non-residents in many 
cases. It considered that the need for action in the areas of fee comparison and switching were 
to be assessed once this major barrier to cross border bank account mobility was removed. 
The  issues  restricting  cross-border  switching  are  further  discussed  in  detail  in  Section  3.2.3 
below. Given the close relationship between bank offer information and switching, the trans-
national  aspects  of  mobility  cannot  be  differentiated.  In  a  fully  functioning  internal  market, 
comparable information on payment account prices across the EU would broaden consumer 
choice and facilitate domestic and cross-border switching.     

3.2.3.  Payment account switching 

What is a payment account switching service? 
Payment account switching is a process by which a payment account user changes/replaces his or her payment account. It 
involves  several  steps:  opening  a  new  payment  account,  transferring  all  recurrent  transactions  and  the  remaining  account 
balance, and closing the old account. It is a complex process as it involves different parties: the user, the two banks, and third 
parties such as utility companies and employers. 
The  payment  account  switching  service  is  not  meant  to  simply  enable  the  user  to  switch,  but  to  facilitate  the  process  of 
switching by providing the user with concrete assistance and adequate information on all steps of the switching process. This 
reduces  the  necessity  for  his/her  involvement  by  allowing  him  to  choose  the  'new'  provider  as  primary  contact  and  helps 
him/her  to  provide  the  new  account  details  to  relevant  third  parties.  Generally,  the  service  aims  to  make  the  switching  a 
smooth, easy and less time-consuming experience to the user. This is achieved by a clear definition of the roles of the two 

190  Data collection for prices of current accounts provided to consumers, 2009, Van Dijk Management Consultants. 

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banks involved, limitation of the maximum duration of the switching process and limitation of the costs of switching-related 
services.  

Potential  and  actual  customer  mobility  creates  competition  between  providers  encouraging 
them to offer better and cheaper products and services in order to maintain or increase market 
share.  Even  though  switching  rates  are  in  themselves  not  an  accurate  measurement  of 
customer  mobility  (as  they  only  capture  actual  switching),  if  such  rates  remain  low  despite 
high price (or low product) differentiation, they can indicate restricted mobility. 
In  nearly  all  Member  States,  price  dispersion  within  Member  States  is  'high'  (i.e.  standard 
deviation  of  average  price  of  above  20%).191  When  comparing  payment  accounts  across 
borders  price  dispersion  is  even  greater,  indicating  the  fragmentation  of  the  EU  payment 
account  markets.  Considering  this  high  price  dispersion  within  and  across  Member  States, 
even satisfied consumers could benefit from switching.  
When  comparing  payment  account  switching  rates  between  providers  to  those  in  other 
network  industries  (e.g.  phone,  electricity,  gas)  all  switching  rates  appear  comparably  high 
and show a slight upward trend.192 However, when considering overall product switches (i.e. 
with  the  same  provider  and  between  providers),  payment  account  switching  rates  are 
significantly  lower  than  those  in  internet  services  and  in  the  mobile  phone  sector.193  This 
could  be  attributed  to  lower  competitive  pressure  in  the  payment  account  markets.  EU 
consumers  typically  hold  their  current  account  for  approximately  10  years  with  the  longest 
being in Finland, Denmark, Sweden and the Netherlands.194 7% of EU account holders have 
switched  accounts  with  ease.195  Consumers  in  Denmark,  Sweden  and  Latvia  found  the 
switching  process  easiest  with  14%,  11%  and  11%  respectively  saying  that  it  was 
straightforward  to  switch.  In  contrast,  only  2%  of  Portuguese,  3%  of  the  Irish,  and  4%  of 
Cypriots  and  Maltese  found  switching  easy.196  Considering  the  high  price  dispersion  within 
and  across  the  Member  States,  even  where  a  consumer  is  'satisfied'  with  their  payment 
account provider, they could ultimately be more satisfied with another product. Therefore, it 
is  important  that  the  threat  of  a  potential  switch  creates  more  competitive  pressure  which 
automatically leads to greater and better product offers for consumers. 
It  would  be  insufficient  to  prohibit  the  tying  of  payment  accounts;  rather,  it  is  necessary  to 
facilitate the switching process by reducing/eliminating the obstacles set out below.  Many of 
these obstacles have been recognised by the banking industry and included within their self-
regulatory  "Common  Principles  on  bank  account  switching".  While  representatives  of  the 
financial  services  industry  indicate  that  they  have  complied  with  the  Common  Principles, 
consumer and civil society representatives argue that the service provided in practice remains 
ineffective.197 
Inadequate information 
The  Common  Principles  require  the  provision  of  information  on  the  switching  process.  In 
practice this information is not always provided. An extensive Europe-wide mystery shopping 

  See footnote 174. 

191
192  "Monitoring consumer markets in the European Union", GfK, 2011, 

http://ec.europa.eu/consumers/strategy/docs/EC_Market_Monitoring_2011_en.pdf  

193  Ibid. 
194  COM(2007) 33, 31.1.2007 and SEC(2007) 106, 31.1.2007 quoted in Tying and other potentially unfair commercial 

practices in the retail financial service sector, CEPS, November 2009, 
http://ec.europa.eu/internal_market/consultations/docs/2010/tying/report_en.pdf  

195  Special Eurobarometer on Retail Financial Services, European Commission, March 2012, p.85, 
http://ec.europa.eu/internal_market/finservices-retail/docs/policy/eb_special_373-report_en.pdf 
Ibid., p. 87. 

196 
197  http://ec.europa.eu/internal_market/finservices-retail/docs/policy/ba_summary-2012_07_25_en.pdf 

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exercise  conducted  in  2011198  found  that  in  86%  of  cases,  information  on  the  existence  or 
content of the switching service was provided either in a branch, online or by telephone,199 but 
the level of information varied widely. In one third of enquiries, no information on switching 
was available on the bank’s website. In 45% of cases, insufficiently detailed information on 
the process was provided online and no explanatory documentation was provided in 80% of 
cases. Even where information was available, it was incomplete in outlining the roles of the 
two banks, the fees to be paid, and the duration of the process. In a majority of cases, the new 
bank did not provide any explanation as to how recurrent payments would be transmitted to 
them (57%), how payments would be cancelled by the old bank (68%), and that the new bank 
would request the old bank to transfer the balance of the account (65%).  
Results  from  studies  conducted  independently  at  national  level  confirm  these  findings.  In 
France,  a  survey200  found  that  only  14%  of  branches  had  information  on  switching  freely 
available and information was provided without specific request in only 35% of cases where 
the  client  expressed  a  wish  to  change  bank.  Insufficient  information  was  also  a  common 
problem  identified  by  civil  society  and  Member  States  in  the  recent  public  consultation  on 
bank accounts.201 
Complexity of switching process 

• 

Fear  of  and  errors  resulting  in  delay  or  non-execution  of  recurrent  payments,  in 
particular direct debits.  

Difficulties transferring standing orders and direct debits represent one of the major barriers to 
account  mobility.  The  Common  Principles  aim  to  make  the  process  of  transfer  of  recurrent 
payments  easier,  yet  research  shows  that  processing  errors  remain  a  key  problem.  Surveys 
have  found  that  fear  of  these  problems  are  one  of  the  main  reasons  why  consumers  do  not 
switch. The 2011 Commission mystery shopping study mentioned above202 found that in two 
thirds of cases, consumers were told that the bank could not assist them with the transfer of 
standing orders. Only 19% successfully switched their payment account including a standing 
order. While the data for Member States differs significantly the overall low success rate must 
be attributable to a widespread problem.  

Graph VIII: Overview: % of successful switches including the transfer of a standing order 

198  Consumer Market Study on the consumers’ experiences with bank account switching with reference to the Common 

Principles on Bank Account Switching, GfK, January 2012, 
http://ec.europa.eu/consumers/rights/docs/switching_bank_accounts_report_en.pdf 

199  Mystery shopping is a technique used widely for checking the performance of traders or service providers towards 

consumers. It is a very useful technique to assess compliance with detailed rules and procedures and is often the only 
effective means to truly test compliance by traders. 

200  Tarifs et mobilité bancaires: le désolant palmarès des Banques, UFC Que Choisir, October 2010, p.14-15, 

http://image.quechoisir.org/var/ezflow_site/storage/original/application/961abc610b3b1f8bd82e9ad5ed117a5f.pdf  

201  http://ec.europa.eu/internal_market/finservices-retail/docs/policy/ba_summary-2012_07_25_en.pdf 
202  See footnote 192. 

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40 

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Source: EU-wide mystery shopping exercise on behalf of European Commission

203

The problem of potential misdirection of payments has been identified as the most prominent 
inconvenience  by  all  stakeholders.204  This  is  also  reflected  in  the  results  of  national 
studies/surveys. In France, a 2010 survey205 found that 61% of banks do not take charge of the 
entire  process;  26%  of  banks  stated  that  the  consumer  is  responsible  for  transferring  direct 
debits; and in 60% of cases, the new bank stated that it could not retrieve the list of recurrent 
payments  from  the  old  bank.  In  the  UK,  on  average  around  8.5%  of  direct  debits  that  are 
switched go to the wrong bank. There is, therefore, a 46% chance that at least one direct debit 
will be misdirected.206 Along with the high direct costs of switching, problematic direct debit 
transfers  have  been  identified  among  the  major  obstacles  for  switching  payment  account 
providers in the United States.207 

• 

Administrative burden of switching 

Although  the  Common  Principles  limit  customer  interaction  with  the  old  bank  and 
allow  the  consumer  to  deal  primarily  with  new  bank,  saving  time  and  effort,  their 
application is not uniform. For example, one French survey208 found that customers 
wishing to switch were not informed about the switching process by the new bank at 
their  first  visit  and  in  nearly  two-thirds  of  cases,  they  had  to  make  an  appointment 
with  a  specialist  agent  of  the  new  provider.  Similarly,  a  recent  mystery  shopping 
exercise in Ireland209 showed that one fifth of the mystery shoppers seeking to switch 
account  were  asked  to  make  an  appointment  with  a  specific  staff  member.  In 
responses  to  the  Commission  public  consultation,  inadequate  training  of  bank  staff 
was listed as an obstacle to switching by public authorities and civil society.210 It is 
estimated  that  in  2009  around  21  million  European  citizens  did  not  switch  current 
account due to the cost and effort involved.211 

• 

Uncertainty in the duration of the switching process 

Due to the involvement of several parties in the switching process, it is often unclear 
how long  the process will  take. The Common Principles set clear  deadlines for the 
parties  to  complete  their  respective  tasks:  the  whole  process  should  not  last  longer 
than  14  banking  days.  However,  research  demonstrates  that  in  practice  these 
deadlines are often not respected. EU research212 concluded that information on the 
duration  of  the  switching  process  was  not  provided  79%  of  the  time  and,  in  many 

Ibid. 

203 
204  2012 Public consultation on bank accounts (see footnote 11), p.15. 
205  Tarifs et mobilité bancaires: le désolant palmarès des Banques, UFC Que Choisir, October 2010, p.16, 

206 

http://image.quechoisir.org/var/ezflow_site/storage/original/application/961abc610b3b1f8bd82e9ad5ed117a5f.pdf 
ICB Final report recommendations, ICB, September 2011, p. 220, 
http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf  

207  Trapped at the Bank: Removing Obstacles To Consumer Choice In Banking, Consumers Union, May 2012, pp.6-8,  

http://defendyourdollars.org/wp-content/uploads/2012/05/TrappedAtTheBank-Complete.pdf 

208  Tarifs et mobilité bancaires: le désolant palmarès des Banques, UFC Que Choisir, October 2010, p.15, 

http://image.quechoisir.org/var/ezflow_site/storage/original/application/961abc610b3b1f8bd82e9ad5ed117a5f.pdf 

209  Central Bank Inspection and Mystery Shop Identifies Concerns about Information Provided on Current Account 

Switching, Central Bank of Ireland, December 2011, http://www.centralbank.ie/press-area/press-
releases/Pages/CentralBankInspectionandMysteryShopIdentifiesConcernsaboutInformationProvidedonCurrentAccountS
witching.aspx  

210  http://ec.europa.eu/internal_market/finservices-retail/docs/policy/ba_summary-2012_07_25_en.pdf 
211  Consumers' views on switching service providers, Eurobarometer 243, European Commission, p. 18. 
212  Consumer Market Study on the consumers’ experiences with bank account switching with reference to the Common 

Principles on Bank Account Switching, GfK, January 2012, 
http://ec.europa.eu/consumers/rights/docs/switching_bank_accounts_report_en.pdf 

EN 

41 

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cases,  the  information  provided  did  not  comply  with  the  Common  Principles.  For 
nearly  a  quarter  of  those  who  switched,  the  process  took  longer  than  14  days.  The 
situation  across  Member  States  differed,  but  in  nearly  half  of  the  Member  States, 
there  were  cases  where  the  deadlines  were  not  respected.  Findings  of  national 
surveys/studies confirm these results. In France,213 the switching process took longer 
than  two  weeks  in  the  large  majority  of cases  and,  in  more  than  40%  of  cases,  the 
switching process lasted for more than one month. In Austria,214 the time needed to 
transfer  recurring  payments  ranged  from  4  to  21  banking  days.  The  length  of 
switching  processes,  including  protracted  procedures  for  closing  an  account  (for 
example on average 35 days in Italy), were criticised by consumer and civil society 
stakeholders in the Commission public consultation.215 

Direct financial costs 
Consumers switching current accounts also bear direct financial costs. Correspondence costs 
depend  on  the  number  of  third  parties  the  consumer  has  to  inform  (exceptions  are  the 
Netherlands  and,  as  of  September  2013,  the  UK,  where  parties  will  be  informed  via  an 
automatic  redirection  service).  Consumers  also  face  the  cost  of  maintaining  two  payment 
accounts  for  the  duration  of  the  switching  process,  including  the  payment  of  an  account 
management  fee,  where  applicable.  This  cost  is  directly  proportional  to  the  length  of  the 
switching process. A final direct cost that may be incurred is an account balance transfer fee. 
In  France,  a  transfer  of  balance  fee  is  charged  by  40%  of  banks.216  The  costs  can  deter 
consumers  from  switching  especially  where  consumers'  view  the  potential  benefits  of 
switching  to  be  relatively  low.  In  2009,  8%  of  the  consumers  who  did  not  switch  current 
account stated that they felt the amount that could be saved by switching was too small.217 
Psychological factors 
Consumer  perceptions  can  deter  switching.  In  the  Netherlands,  switching  rates  are  low, 
despite there having been an account redirection system since 2004. One possible explanation 
is  the  perception  that  the  process  remains  difficult,  even  though  those  who  have  used  the 
service  found  it  easy.218  Moreover,  many  consumers  believe  that  there  is  no  significant 
advantage in switching. One UK survey found that only 10% of consumers have considered 
switching their personal payment account provider within the last year. This survey notes that 
the main reason for not considering switching was consumer satisfaction with their existing 
provider's  product.219  In  this  context,  the  widespread  (75%  of  the  UK  personal  payment 
account market) use of free-if-in-credit accounts contributed to the perception that all personal 
payment accounts were the same. 
Restricted cross-border switching  
The self-regulatory Common Principles did not introduce any cross-border switching services. 
There is therefore no common framework in place aiming to facilitate cross-border switching 
of  payment  accounts.  Although  there  is  a  significant  potential  demand  for  cross-border 
switching, consumers may be deterred by the complexity of the process in practice.  

213  Tarifs et mobilité bancaires: le désolant palmarès des Banques, UFC Que Choisir, October 2010, p.19, 

http://image.quechoisir.org/var/ezflow_site/storage/original/application/961abc610b3b1f8bd82e9ad5ed117a5f.pdf 

214  Kontowechsel: Wie funktioniert er?, VKI, March 2010. 
215  http://ec.europa.eu/internal_market/finservices-retail/docs/policy/ba_summary-2012_07_25_en.pdf  
216  ACP rapport sur la mobilité bancaire, ACP, September 2011  
217  Consumers' views on switching service providers, Eurobarometer 243, European Commission, p. 19. 
218 

ICB Final report recommendations, ICB, September 2011, p. 220, 
http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf   

219  OFT 1282 Review of barriers to entry, expansion and exit in retail banking, Office of Fair Trading, November 2010 , 
p. 127-130, http://www.oft.gov.uk/OFTwork/markets-work/othermarketswork/review-barriers/, The underlying OFT 
consumer survey was performed in July 2010, base: 932 PCA holders. 

EN 

42 

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Cross-border demand for payment accounts arises when individuals use their mobility rights 
and  move  temporarily  or  permanently  to  another  Member  State.  Currently,  there  are  about 
12.3  million  EU  citizens  above  the  age  of  15  that  reside  permanently  in  another  Member 
State.220  
However, since the establishment of the Single European Payment Area (SEPA), the mobile 
citizens  are  not  the  only  driver  for  cross-border  demand  for  payment  accounts.  The 
introduction of standardised payment instruments (transfers, direct debits) by SEPA marked a 
significant  step  towards  integrated  financial  markets.  The  SEPA  vision  is  that  consumers 
should  be  able  to  operate  in  the  European  market  as  easily  as  in  their  domestic  market. 
Therefore, the cross-border switching is also of high interest to the non-mobile citizens who 
could then easily accede to better products offered in another Member State. 
Considering  the  high  price  dispersion  of  payment  accounts  in  different  Member  States, 
consumers could significantly benefit from switching their payment account cross-border.  

Table 7: Average prices for bank account services in the EU in 2007 (four consumer profiles, prices in euro/year)  

Payment service user profile (average prices in EUR/year) 

Average 

140.47 

58.15 

26.94 

84.59 

95.37 

74.27 

50.51 

104.42 

154.11 

89.13 

53.98 

76.20 

81.85 

253.14 

115.24 

34.76 

56.64 

71.85 

45.95 

73.21 

44.89 

82.59 

73.68 

100.40 

178.21 

61.84 

103.20 

Basic 

83.95 

16.28 

9.30 

48.74 

54.81 

38.91 

46.98 

94.04 

91.21 

78.92 

45.06 

64.08 

37.17 

143.19 

107.33 

14.69 

25.64 

45.38 

28.85 

50.55 

13.19 

69.79 

55.59 

70.13 

134.06 

53.35 

28.34 

Passive 

99.54 

29.05 

17.14 

6.52 

39.65 

37.92 

25.57 

44.65 

91.35 

62.85 

14.81 

28.39 

56.40 

134.99 

63.26 

11.20 

40.37 

53.21 

30.13 

45.97 

26.01 

30.28 

44.49 

43.50 

104.72 

25.16 

94.99 

Active 

197.46 

82.07 

42.83 

184.99 

156.52 

128.41 

93.08 

206.56 

232.15 

114.71 

111.67 

144.42 

118.39 

401.72 

192.28 

112.92 

95.99 

99.47 

55.60 

114.01 

81.97 

141.90 

125.08 

200.76 

303.57 

128.21 

111.40 

Member State 

Austria 

Belgium 

Bulgaria 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

220 

See footnote 120 

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43 

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EU27 

111.62 

61.47 

74.41 

159.18 

Source: Van Dijk Management Consultants study for the European Commission, 2009 

Since  the  SEPA  provisions  refer  to  payments  in  euros,  this  would  mostly  concern  payment 
accounts within the Euro area, but would also apply to accounts in euros in any EU Member 
State.  As  can  be  inferred  from  the  table  above,  Italian  consumers,  for  example,  paying  on 
average EUR 250 yearly fee could save around EUR 100 a year when switching to a French 
account and more than EUR 200 by switching to a provider in the Netherlands.221 For active 
account users these savings would be even more important. An active Italian account holder 
could  save  EUR  170  per  annum  by  switching  to  a  comparable  account  offered  in  France  a 
EUR 346 per annum by switching to a provider in the Netherlands. 
As consumers may prefer to have their account with a provider with local presence, the cross-
border demand may be strongest in border regions, where citizens are prone to shop abroad.222 
However,  given  that  the  functionality  is  to  be  the  same  and  the  fact  that  consumers  are 
increasingly  using  internet  banking,  it  is  reasonable  to  expect  that  facilitation  of  switching 
payment  accounts  cross-border  would  significantly  increase  the  cross-border  mobility  in 
medium term.  
Due  to  the  fact  that  there  is  no  cross-border  switching  service,  the  process  continues  to  be 
characterised  by  separate  "opening  and  closing"  procedures  rather  than  "switching"  of 
payment  accounts.  Consumers  may  be  deterred  from  switching  account  providers  cross-
border  as  the  obstacles  to  switching,  described  in  the  previous  sub-sections  are  even  more 
important in such context. This is in particular true for the transaction costs arising from the 
switching  process.  In  a  purely  domestic  context,  transaction  costs  in  the  absence  of  a  well-
functioning  switching  service  are  conservatively  estimated  at  EUR  135  per  switch.223  They 
relate  to  administrative  costs  (time  spent  to  contact  the  providers,  money  spent  on 
correspondence  to  creditors  and  debtors  to  inform  them  on  the  new  account  details)  and  to 
costs linked to payment defaults (resulting from a lack of coordination between providers that 
may lead to errors linked to payment instruments, such as stopping a direct debit's payment, a 
payment refusal for lack of funds or an overdraft due to an unforeseen debit).  
In  the  case  of  cross-border  switching,  due  to  the  potential  geographical  distance  of  the  two 
providers,  the  consumer  may  need  much  more  time  and  potentially  incur  significant  travel 
costs to open the new account, carry out the transfer of all necessary payment transactions and 
the account balance and close the old account. With regard to the information of third parties 
about  the  new  account  details  for  recurrent  payment  transactions,  consumers  are  likely  to 
incur higher correspondence costs and bear higher costs resulting for delayed/missed recurrent 
payments  as  the  coordination  of  the  two  providers  may  be  more  burdensome  in  the  cross-
border context. Assuming that these additional costs would lead to an overall increase of 30% 
of the transaction costs, consumers would need to pay/forego on average around EUR 175 to 
switch payment account providers. 
Not only do the Common Principles not provide for a cross-border switching service, there is 
also  substantial  divergence  in  the  application  of  the  Common  Principles  by  Member  States 
and national banking communities. The Common Principles have been implemented through 
interbank  agreements.224  Legislative 
industry  codes,  recommendations,  guidelines  or 

221  Data collection for prices of current accounts provided to consumers, Van Dijk Management Consultants, 2009. 
222  Eurobarometer: Qualitative study on cross-border shopping in 28 European Countries, European Commission, 2004, 

p.9, and p.15. 

223  The estimates is based on a  study carried out by the French consumers' association UFC-Que Choisir.    La mobilité 
bancaire, UFC Que choisir, p.4, Juin 2006, http://www.industrie.gouv.fr/biblioth/docu/dossiers/sec/pdf/annexe12.pdf 
As the figures stem from 2004 a inflation rate of 2% p.a. used to update the figures to 2012 price level. 

224  Report on the implementation of the EBIC Common Principles on bank account switching, EBIC, 2009, Table 1, p.5ff 

EN 

44 

   EN 

                                                 
measures  have  only  been  taken  in  Ireland.225  The  result  is  that  not  all  account  providers 
comply  with  the  Common  Principles.  For  example,  adoption  of  the  Common  Principles  is 
restricted  to  members  of  the  national  banking  association  in  the  Czech  Republic.226  In 
Belgium, the transfer of payment cards and memo orders was included227 and the future UK 
redirection  service  is  expected  to  cover  direct  credits,  direct  debits,  standing  orders  and 
regular card payments. This creates an obstacle to efficient internal market for consumers and 
providers  alike.  For  providers  operating  in  more  than  one  Member  State,  the  differences 
across Member States often impose direct costs and costs in the form of foregone economies 
of  scale,  diminishing  competitiveness.  Due  to  the  consolidation  of  the  European  banking 
industry  in  recent  decades,  providers  operating  in  more  than  one  Member  State  service  a 
significant share of the market for payment accounts.228  
An  introduction  of  cross-border  switching  service  would  reduce  the  complexity  and 
uncertainty  of  the  switching  process,  make  it  less  costly  to  the  consumers  and  thereby 
facilitate  their  mobility.  All  consumers  –  mobile  and  non-mobile  –  would  also  have  the 
opportunity  to  shop  around  and  open  a  payment  account  in  another  Member  State.  The 
increased  consumer  mobility  would  increase  competitive  pressure  in  the  retail  banking 
markets. This would benefit consumers and providers who will be able to provide better/more 
suitable products and a better service, i.e. deliver value for the money to their clients. In this 
respect, it has been acknowledged by industry experts as well as academics, that "in order to 
maximise the potential benefits of SEPA, it is necessary to address the barriers to the cross-
border opening and switching of bank accounts."229  

3.3. 

Interlinks 

Access  to  a  payment  account  is  essential  in  the  modern  economy.  In  a  truly  functioning 
internal market, access should be available across domestic borders, anywhere in the EU. If an 
EU  citizen  from  Poland  moves  to  the  UK,  but  is  unable  to  open  an  account,  transparent 
information on fees and an effective switching process will be of no value to them. All EU 
citizens should be able to fully participate in economic life and benefit from shopping around 
for a payment account that best suits their needs. To shop around effectively and efficiently, it 
is necessary to be able to easily compare and switch products. Thus, efforts have to be made 
to facilitate customer mobility and consequently, competition. 
The  Commission  inquiry  into  the  retail  banking  sector230  found  that  low  levels  of  customer 
mobility  was  directly  related  to  higher  bank  profitability  and  that  the  impact  of  customer 
mobility in the payment account market on market power, (measured on total retail banking 
profitability),  was  such  that  a  1%  increase  in  market  churn231  gave  rise  to  a  corresponding 
similar  decrease  in  banks'  pre-tax  profitability  ratio.  While  the  relationships  found  in  the 
inquiry  do  not  take  account  of  a  certain  number  of  variables  that  influence  both  levels  of 

 http://www.ebf-fbe.eu/uploads/documents/publications/Reports/2%20march%202010%20-%20PUBLIC-
%20EBIC%20Implemenation%20Report%20(final)%20-
%20Common%20Principles%20on%20Bank%20Account%20Switching.pdf  

225  A statutory Switching Code replaced the Voluntary Switching Code as of 1 October 2010. 
226  Easy switching? – A long way to go; BEUC Monitoring Report of the 'Common Principles for Bank Account Switching', 

BEUC, January 2011, p. 6-12. 

227  Switching evaluation Belgium, Belgian Bankers' and stockbroking Firms' Association, 2010. 
228  EU Banking structures, ECB 2010, p.20; http://www.ecb.int/pub/pdf/other/eubankingstructures201009en.pdf 
229  Expert Group on Customer Mobility in Relation to Bank Accounts, Report, June 2007, p.12  
230  Report on the retail banking sector inquiry, SEC(2007) 106, European Commission, 31.1.2007; 

http://ec.europa.eu/competition/sectors/financial_services/inquiries/sec_2007_106.pdf 

231  Defined as the share of customers who change providers in a given year. 

EN 

45 

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switching  and  bank  performance,232  they  indicate  that  customer  mobility  impacts  market 
performance and the structure of the market in ways which encourages competitive rivalry. 
Opaque fee structures raise barriers to choice, affecting the extent to which consumers switch 
providers.  This  is  true  when  comparing  offers  within  domestic  markets  as  well  as  across 
borders. The actual switching of accounts can only take place once the consumer has made a 
choice of product, based on transparent and easy to understand fee and service information. 
Barriers to switching resulting from difficulties in the switching process itself can therefore be 
the final straw for many consumers at the end of a long process. However, cross-border fee 
transparency  and/or  switching  mechanisms  cannot  be  truly  effective  unless  barriers  to 
accessing markets across borders are removed for consumers, meaning that consumers are no 
longer  restricted  to  opening  a  payment  account  in  another  Member  State,  due  for  example, 
limitations imposed on non-residents. Combined, the problems identified in these three areas 
inhibit  consumer  mobility,  potentially  affecting  competition  and  efficiency  in  the  payment 
accounts market. In particular, where commercial practices or regulation hinder an EU citizen 
from acquiring an account cross border, any action to render bank offers more comparable by 
establishing common presentation requirements across the EU cannot be effective. Similarly 
action  to  improve  the  process  of  switching  between  providers  within  the  EU  cannot  have  a 
positive effect as long as access to providers situated in another Member State is restricted.   
Further, serious problems arise in terms of time, effort and financial costs for consumers and 
industry  alike  when  seeking  to  move  across  the  EU,  due  to  fragmented  markets  resulting 
among  other  things,  from  different  customer  information  requirements  and  procedures.  All 
consumers,  both  domestic  (not  just  vulnerable)  and  mobile,  who  are  unable  to  easily  shop 
around may end up with products that are unsuitable for their needs and/or at a higher price. 
All  consumers  would  be  restricted  to  their  domestic  markets  raising  the  risk  of  market 
capture.  The  financial  services  industry  is  equally  restricted  in  its  behaviour.  Facing  27 
different  rules  on  fee  transparency  and  domestic  switching  mechanisms,  certain  financial 
institutions  may  decide  that  cross-border  activity  is  simply  not  worth  the  sunk  costs, 
particularly given the limited customer mobility. The wider economy would also be affected. 
Enterprises  offering  their  goods  and  services  would  be  unable  to  sell  their  products  to 
consumers  with  inadequate  means  of  payment.  This  is  true  for  vulnerable  consumers  in 
domestic markets but has a larger impact when considering the potential of the single market 
for e-commerce.  
However, they also create very practical problems in terms of time, effort and financial costs 
for  consumers  and  industry  alike  seeking  to  move  across  the  EU,  creating  impediments  to 
growth and undermining the flexibility of the economy. 

3.4. 

Summary of consequences 

The  problems  identified  above  and  the  way  they  interact  impact  on  the  way  all  relevant 
categories of  stakeholder (including consumers, financial services providers,  Member  States 
and  the  economy  in  general)  operate  at  both  a  national  and  EU  level  in  the  retail  banking 
sector. These impacts are summarised below. 

3.4.1.  Consumers 

Inability to choose the best account for their needs 
Potential and actual customer mobility exerts a competitive pressure on existing and potential 
account  providers  to  improve  product  quality  and  reduce  prices.  The  lack  of  clear  and 
comparable  information  on  bank  fees  means  that  consumers  do  not  understand  how  much 

232  E.g. the direct effect of switching costs on customer mobility; levels of customer satisfaction in explaining customer 

mobility; or the impact of differing levels of banking sector stability on market performance. 

EN 

46 

   EN 

                                                 
they  are  charged  for  their  account  and  results  in  them  being  unable  to  compare  offers  and 
potentially switch providers for a better deal. The direct and indirect financial costs of actually 
switching create an opportunity cost, dissuading consumers from switching to a better product 
for  their  needs.  These  consequences  may  be  even  higher  when  viewed  in  a  cross-border 
context,  where  the  benefits  of  a  larger  market  and  more  competition  in  terms  of  product 
diversity and potentially lower prices could be even greater for consumers. 
Restricted choice of products and services 
Online shopping offers a wider choice and potentially lower prices for products and services; 
it also opens the potential of shopping throughout the internal market for consumers that may 
remain  geographically  local.  Consumers  without  a  payment  account  have  very  limited 
opportunities to make use of e-commerce as the majority of transactions require a credit card 
or  bank  transfer.  While  other  means  of  payment  can  also  be  used,  these  are  usually  more 
expensive and inconvenient.233 For instance, pre-paid cards can be used over the internet but 
the fee structure behind them is not transparent and access channels are limited.234 A report on 
access to retail banking services for the European Parliament referred to this as "the 'poverty 
premium',  i.e.  the  higher  price  poorer  families  have  to  pay  for  goods  and  services  because 
they  cannot  access  the  online  deals  that  are  available  to  households  with  payment  means 
accepted for e-commerce."235 Although it may appear unlikely that poor consumers, even if 
equipped  with  an  account,  would  massively  turn  to  online  shopping,  one  UK  study  on  the 
experiences of newly banked consumers found that 22% had shopped by telephone or internet 
since  opening  their  account.236  Problematically,  even  where  a  consumer  is  able  to  access  a 
basic payment account, its payment features may be restricted to the domestic market. This is 
the case, for example, in the Netherlands, Belgium and Hungary.  
Higher costs 
Restricted  customer  mobility  through  barriers  to  switching  has  an  adverse  impact  on 
consumers;  'locked-in'  customers  experience  higher  prices  and  a  reduced  level  of  services. 
Moreover, errors in the switching process have a short/medium term direct impact: bills may 
go unpaid during the switching process and the customer might have to bear extra costs and 
spend extra time trying to find out about missed payments. The potential long term indirect 
impact of such errors is equally important. Consumers may incur a black mark on their credit 
history, restricting their access to credit or certain services, e.g. rental accommodation. 
In  addition  to  the  'poverty  premium'  described  above  that  leads  to  consumers  paying  more 
because  of  the  smaller  market  that  they  can  access,  unbanked  consumers  also  face  several 
direct costs.  First,  having  a payment account gives consumers access to potential discounts, 
e.g.  those  offered  by  utilities  companies  when  payments  are  made  by  direct  debit  or  those 
provided through a bundle of products or services with the same provider. A 2011 report in 
the  UK  concluded  that  unbanked  families  pay  £253  per  year  extra  in  gas  and  electricity 
bills237  compared  to  families  that  pay  by  direct  debit  while  an  average  annual  income  per 
employee  in  the  UK  was  about  £24,000  in  2011.238  Second,  the  use  of  cash  rather  than 
alternative  means  of  payment  can  provide  a  direct  cost.  For  example,  in  Germany,  those  in 
receipt of social security benefits without a payment account receive a cheque which can be 

233  Financial Services Taskforce, Banking services and poorer households, December 2010. 
234 
235  Basic banking services, London Economics for European Parliament's Committee on the Internal Market and Consumer 

Ibid. 

Protection, November 2011, p. 19. 
Ibid. 

236 
237  The UK poverty rip-off, Save the children UK, January 2011. 

http://www.savethechildren.org.uk/sites/default/files/docs/UK_Poverty_Rip_Off_Brief_1.pdf  

238  UK Office for National Statistics (http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/ashe-

results-2011/ashe-statistical-bulletin-2011.html ) 

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cashed at a post office.239 In 2010, the average amount of benefit paid in Germany was EUR 
380,  and  the  recipient  was  charged  EUR  7  for  the  processing  of  the  payment;  costing  an 
average of EUR 85 per recipient per year.240 Similarly, buying an airline ticket face to face in 
cash rather than over the internet entails additional costs. Finally, cash can create a significant 
risk in terms of theft. 
Economic exclusion 
Unbanked consumers may also face difficulties in relation to employment or renting property. 
For  example,  at  some  German  universities  students  need  a  payment  account  since  rent  for 
student halls is paid by standing order.241 Regarding employment, having a payment account 
may  not  be  a  legal  requirement  to  take  up  a  position.  However,  in  some  cases,  "paying  out 
salaries  in  cash  or  by  cheque  may  simply  no  longer  be  possible."242  A  2010  study  reported 
that "having an account was perceived to be a necessity for securing employment among the 
unbanked."243 It is a frequent difficulty for migrant workers travelling, for instance, from new 
Member States to Western EU countries. The difficulties in accessing a payment account may 
actually  prevent  many  migrant  workers  from  seeking  employment  abroad  thus  creating  an 
important barrier to the free movement of persons. 
Low consumer confidence 
Insufficient  information  on  bank  fees  together  with  insufficient  information  on  switching 
reduces  consumer  confidence  in  seeking  an  account  more  suited  to  their  needs.  As  a 
consequence,  consumers  cannot  reap  the  benefits  of  an  efficient  and  competitive  market, 
which are even greater in the context of cross-border shopping around.  

3.4.2.  Effects on financial industry  

Restricted market entry/expansion 
Different  regulatory  frameworks  and  bank  infrastructures  established  along  national 
boundaries contribute to the fragmentation of the market and raise barriers to entry. Further, 
existing  credit  institutions  face  difficulties  expanding  their  existing  client  base.  In  general, 
green-field market entry into another Member State's banking market tends to be more risky 
and  less  successful  than  entry  through  M&A.244  Low  customer  mobility  could  be  one 
explanation. Since retail banking customers are relatively immobile it is difficult for a green-
field operation to win large numbers of customers through price competition and thus acquire 
significant scale in a commercially viable time-frame.245 Effective switching regimes are an 
important factor in deciding whether to enter retail banking markets in other Member States.  
Furthermore,  the  low  levels  of  cross-border  switching  can  also  endanger  efforts  to  improve 
cross-border  payments;  according  to  industry  experts,  removing  the  barriers  to  cross-border 
switching is essential to maximise the benefits of SEPA.246  

239  Bericht der Bundesregierung zur Umsetzung der Empfehlungen des Zentralen Kreditausschusses zum Girokonto für 

jedermann, Drucksache 17/8312, German Bundestag, 27.12.2011, p. 8 
Ibid. 

240 
241  Anecdotal evidence provided to the Commission. 
242  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 
for Strategy and Evaluation Services (CSES), July 2010, p. 44-45, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study. 

243  Financial Inclusion Evidence Review: the costs of banking exclusion and the benefits of access to bank accounts, Claire 

Whyley, 2010, p. 22. 

244  Report on the retail banking sector inquiry, SEC(2007) 106, European Commission, 31.1.2007. 
245 
246  Report of the Expert Group on Customer Mobility In Relation To Bank Accounts. 

Ibid. 

http://ec.europa.eu/internal_market/finservices-retail/mobility/bank_switching_en.htm  

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The  different  regulatory  frameworks  for  access  to  and  switching  of  payment  accounts  also 
create a significant barrier to cross-border entry. Credit institutions who offer their services in 
more than one Member State will need to create and/or integrate their systems into different 
switching  regimes  for  each  market  in  which  they  operate.  This  is  expensive  and  time 
consuming,  raising  sunk  costs  and  preventing  economies  of  scale,  hindering  cross-border 
business and the realisation of a single market. Alternatively, should the cross-border provider 
decide  against  investing  in  the  creation  of  a  switching  service  (for  instance,  where  the 
switching service is subject to self-regulation or access is conditional on being a member of 
the national bank association), they would face the same problems described above in terms 
of attracting new customers. They would therefore be faced with competing against domestic 
providers on an uneven playing field, distorting competition.  

3.4.3.  Non-financial services/products providers 

Higher administrative costs 
Consumers  lacking  a  payment  account  impose  higher  costs  on  enterprises,  as  they  face  the 
administrative and security cost of paying salaries in cash or by cheque. Enterprises have to 
insure the cash held and spend time depositing and collecting cash from a bank; they also face 
an increased risk of fraud through money laundering, fake notes and coins, etc. Accordingly, 
hiring employees without a payment account may be more expensive. To offset these costs, 
enterprises  may  increase  their  prices,  but  this  restricts  competitiveness  and  growth.  Higher 
administrative costs lead to lower profits, less money to invest, and missed opportunities. 
Bringing consumers into the financial system can also support efforts to fight corruption and 
the black economy. Broader access to means of electronic payments is a natural complement 
to  anti-fraud  measures.  This  was  a  reason  why  Italy  introduced  an  obligation  for  all 
consumers to hold a bank account.247 
Enterprises  encounter  costs  when  direct  credits  and  direct  debits  are  misdirected  during  a 
switch of their clients or employees. 
Missed business opportunities 
Restrictions on consumer access to payment accounts affect enterprises in other ways. There 
is  a  market  for  goods  and  services  that  they  either  cannot,  or  find  it  difficult  to,  sell  their 
goods  and  services  to.  The  European  market  as  a  whole  may  suffer  from  restrictions  on 
account services that limit users of payment accounts to 'domestic' transactions, particularly in 
the context of online sales.  
Small-  and  medium-sized  online  enterprises  develop  rapidly,  contributing  to  economic 
growth. They could grow even faster if more consumers had access to basic banking services. 
With the internet easily available (and commonly used on mobile phones), online enterprises 
have  huge  growth  potential.  Many  small-  and  medium-sized  enterprises  offer  products  or 
services online while acting as intermediaries for larger ones (e.g. websites offering clothes of 
different  brands,  or  others  selling  travel  arrangements).  Increased  access  to  online  payment 
mechanisms could increase sales for all enterprises.  

3.4.4.  Public administrations 

Higher administrative costs 
Member  States'  administrations  face  higher  costs  due  to  the  need  to  use  cash  to  pay 
consumers who do not have a payment account, e.g. when paying benefits. Therefore, almost 

247  Law 214 of 22 December 2011, Article 12(3) 

http://www.aitecweb.com/Portals/0/pubnoaut/varie/Legge%2022%20dicembre%202011,%20n.%20214.pdf  

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all of them recognise that it is crucial for consumers to be able to access a payment account.248 
In  a  number  of  countries,  the  payment  of  social  benefits  into  a  payment  account  has  been 
made compulsory (e.g. Denmark, France) or payments  made  in  cash  are  charged  extra  (e.g. 
Germany). Partly as a consequence of this, payment account penetration is close to 100% in 
these countries. However, in others, such as Ireland, only 40% of social benefits payments are 
made through a payment account, while 52% are made through a post office.249 In Ireland, the 
cost of using non-electronic payments systems was estimated at EUR 1 billion in 2007.250 In 
Hungary,  approximately  50%  of  pension  payments  are  made  by  money  orders  and  not  by 
credit transfer. If these payments could be made by transfer, approximately HUF 6.5 billion 
could be saved annually.251 More widespread use of electronic means of payment, instead of 
cash, would be very beneficial for public finances in Member States, especially in the current 
economic climate, and could further contribute to economic growth in the EU. 

3.4.5.  Wider economy 

A  reliance  on  cash  causes  the  unbanked  population  to  impact  upon  the  wider  economy. 
Studies undertaken by the payment industry252 suggest that the cost of cash in the EU for all 
currencies could be as high as EUR 84 billion per annum or EUR 130 per inhabitant. For the 
euro area alone this is estimated at EUR 40 to 45 billion, equivalent to around 0.4% of GDP. 
According  to  the  World  Payments  Report253,  an  increase  in  the  use  of  electronic  means  of 
payment and reduction of the euro cash in circulation to the level comparable with the USA 
would bring about savings of around EUR 20 billion annually in the euro area economies. In 
Hungary,  a  recent  study  estimated  that  the  complete  phasing  out  of  paper-based  orders  for 
welfare payments could produce savings of approximately HUF 85 billion annually.254 
Encouraging  electronic  transactions  would  also  support  efforts  to  fight  corruption  and  the 
black  economy:  transactions  in  cash  are  almost  untraceable.  This  would  help  a  number  of 
Member States who are currently trying to improve their public accounts.255 An increased use 
of  electronic  means  of  payments,  including  the  exchange  of  information  and  traceability, 
would  complement  EU  efforts  to  improve  tax  compliance,  thus  contributing  to  healthier 
public finances and economic growth. 

Increased access to basic banking services may also help combat unemployment in the EU as 
it would facilitate and encourage mobile workers to travel to other Member States. Moreover, 
some employers would find it easier and cheaper to pay salaries by bank transfer instead of 
via cash or cheque. 

248  2012 Public consultation on bank accounts (see footnote 11), p. 10. 
249  Strategy for Financial Inclusion, Final Report, 2011, p. 14. 

http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf 

250  Strategy for Financial Inclusion, Final Report, 2011, p. 11. 
251  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary, 

p. 94. 

252  Study on the cost of cash, European Payments Council, 2010; World Payments Report 2011, Capgemini, RBS,Efma, 

2011. 

253  World Payments Report 2011, Capgemini, RBS and Efma, 2011 
254  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary 
255  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 28. 

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4. 

OBJECTIVES 

The  over-arching  objective  of  this  initiative  is  to  create  an  efficient  and  competitive  Single 
Market (Article 114.1 of the Treaty) with a high level of consumer protection (Article 114.3 
of the Treaty) that promotes economic growth and financial inclusion. The general objectives 
of the three problem areas are to enhance consumer confidence; to improve consumer choice, 
both in terms of the quality and the price of products available; to facilitate customer mobility; 
to  facilitate  the  cross-border  activity  of  payment  account  providers;  and  to  ensure  a  level 
playing field between market actors. 
This will also contribute to achieving the objectives of the Banking Union by enhancing the 
functioning of the internal market and strengthening the banking conduct regime by removing 
the  remaining  barriers  to  the  internal  market.  As  national  measures  vary  significantly  in  all 
areas, the proposal lays the foundation for a more integrated EU-level treatment of banks and 
consumers and thus seeks to create a more level playing field for all stakeholders in relation to 
transparency of bank fees, switching and access, while enhancing consumer confidence. The 
objectives of this IA are described in Table 8 below.  

Table 8: Overview of objectives 

General objectives 

To enhance consumer confidence 
To broaden consumer choice both in terms of the quality of the products available and in terms of price reductions 
To facilitate financial inclusion and thereafter customer mobility 
To facilitate the cross-border activity of payment account providers 
To ensure a level playing field between market actors 

Specific objectives 

Operational objectives 

Access to basic account services 
To facilitate access to basic account services 
(not oblige everyone to have a payment account) 

(cid:131) 
(cid:131) 

(cid:131) 

(cid:131) 

Reduce the number of unbanked Europeans by 6.4 million by 2020
Ensure access to all basic payment means for all consumers with basic payment 
accounts 
Facilitate cross-border access to basic banking services for 3.5 million consumers by 

256

257

2020
Improve consumers' awareness on basic payment accounts 

Ease of comparison of bank fees and requirements covering presentation 
To ensure that EU consumers receive clear, complete 
and comparable information on bank fees 

(cid:131) 
(cid:131) 
(cid:131) 
(cid:131) 
(cid:131) 

Consumers are able to understand bank offers and assess value for money 
Payment account offers are easily comparable 
Help consumers choosing the offer best matching their needs 
Increase consumers awareness of charges actually paid 
The burden of switching to consumers is reduced 

Switching of payment accounts 
To ensure that EU consumers are able to switch 
payment accounts with ease and in a timely manner. 

(cid:131) 
(cid:131) 
(cid:131) 

(cid:131) 
(cid:131) 
(cid:131) 

Switching is a smooth and easy process 
Consumers are assisted and informed of the switching process in an adequate manner 
The number of misdirected/missed payments during switching process is reduced to 
less than 5% of recurrent transactions 
The direct financial costs of switching to consumers is reduced 
The duration of switching process is maximum 14 days 
The mobility of payment account users is increased 

5. 

NEED FOR EU ACTION 

Payment accounts represent the financial services product most likely to be purchased cross-
border.258 Yet persisting barriers to access, whereby mobile and vulnerable consumers cannot 

256  EU 2020 strategy aims to reduce a number of poor and socially excluded by at least 20 million by 2020 through, among 

others, improved access to essential services and tackling financial exclusion. 
http://ec.europa.eu/social/main.jsp?catId=751&langId=en 
Ibid. 

257 
258  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p. 31, 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm. 

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open an account, problems with the transparency and comparability of payment account fees 
and  charges,  and  difficulties  with  the  switching  process,  deprive  stakeholders  of  some 
opportunities offered by a fully-functioning internal market for payment accounts. The impact 
upon consumers, business and the wider economy is significant. 
The  fragmented  market  that  flourishes  in  the  absence  of  transparent  and  comparable 
information,  effective  switching  mechanisms  and  the  right  of  access,  distorts  competition 
within the internal market. Consumers experience higher prices, inferior products, and limited 
services – including accounts restricted to use in domestic markets – accordingly, they have 
low confidence in their banks. Moreover, a fragmented market of this nature makes it more 
difficult  for  citizens  to  move  to  other  Member  States.  Solving  these  problems  is,  therefore, 
crucial for consumers, business and the European economy.  
Since 2006, the Commission has repeatedly tried to improve the functioning of the payment 
account market, by promoting self-regulatory initiatives for account switching (the Common 
Principles259), account transparency and comparability, and by adopting a Recommendation to 
facilitate access to a basic payment account.260 Since these initiatives have failed to address 
the problems, the Commission considers it necessary to act.261 The Single Market Act (SMA) 
II adopted on 3 October 2012 identified a legislative initiative on bank accounts in the EU as 
one  of  the  12  priority  actions  to  generate  real  effects  on  the  ground  and  make  citizens  and 
businesses confident to use the single market to their advantage. 
According  to  the  principle  of  subsidiarity,  Community  action  may  only  be  taken  if  the 
envisaged aims cannot be achieved by Member  States alone.  Whilst it may be the case that 
EU  intervention  cannot  easily  address  some  of  the  more  intangible  features  of  cross-border 
take-up of banking services, such as language or distance, nevertheless, EU intervention can 
be justified to achieve the outlined objectives for several reasons: 

5.1. 

To  improve  the  proper  functioning  of  the  internal  market  and  avoid  the 
distortion of competition in the field of retail banking 

Different regulatory frameworks, or the lack thereof, raise barriers to entry across borders. An 
EU initiative will better address factors that prevent the pursuit of business or raise the cost of 
doing  business  in  another  Member  State  relative  to  the  costs  faced  by  domestic  providers. 
Credit  institutions  that  seek  to  operate  across  borders  not  only  need  to  meet  differing 
requirements but are also prevented from making full use of economies of scale in developing 
processes and in operations in areas such as back office activities.  

• 

• 

Low  customer  mobility  in  general  and  inefficient  switching  mechanisms  in 
particular, create obstacles to market entrants to gain new clients. Moreover, the low 
levels  of  cross-border  switching  can  endanger  the  development  of  cross-border 
payments  in  general,  as  raised  by  industry  experts.  The  non-level  playing  field 
between  market  actors  results 
in  reduced  competitive  rivalry  and  missed 
opportunities within the internal market. 

Inaction  or  action  from  Member  States  alone  is  likely  to  result  in  different  sets  of 
rules, leading to uncompetitive markets and unequal levels of consumer protection in 
the  EU.  Market  fragmentation  in  retail  banking  would  persist  or  become  further 
entrenched  threatening  long-term  market  integration.  This  may  take  the  form  of 

259  Common Principles on Bank Account Switching, European Banking Industry Committee, December 2008,  

http://www.eubic.org/Position%20papers/2008.12.01%20Common%20Principles.pdf 

260  Commission Recommendation 2011/442/EU (see footnote 3). It defines a 'payment account' as "an account held in the 

name of one consumer which is used for the execution of payment transactions". 

261  See for instance Recommendation on access to basic payment accounts (see footnote above). 

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• 

• 

5.2. 

• 

• 

significant investment in domestic redirection services that are technically difficult to 
connect  with  schemes  in  other  Member  States,  or  increasingly  divergent  national 
approaches to the development of payment account fees. 

Common  criteria  established  at  EU  level  for  the  functioning  of  the  retail  banking 
sector  would  provide  consumers  with  the  necessary  information  required  to  make 
informed choices. This will contribute to the strengthening of competition and to the 
efficient allocation of resources within the EU financial retail market to the benefit of 
businesses and consumers. Consequently, common criteria would reduce sunk costs 
on the part of the financial services industry. Easy-to-understand fees and switching 
possibilities combined with the right of access to basic account service will allow EU 
citizens to move and shop around more easily within the Union. It will also allow all 
consumers to fully benefit from the internal market (for example by participating in 
e-commerce and, therefore, in the digital market, including more competitive cross-
border goods and services). 

Initiatives  to  establish  common  presentation  requirements  and  encourage  fee 
comparability across borders cannot be distinguished from those in domestic markets 
without  creating  fragmentation  between  domestic  and  cross-border  markets.  To  be 
effective,  minimum  requirements  aimed  at  lowering  the  barriers  to  cross  border 
mobility  are  needed.  However  general  requirements  regarding  the  presentation  of 
payment  account  fees  that  only  target  cross  border  offers  would  not  eliminate 
difficulties  in  comparing  information  domestically  due  to  different  national 
requirements. In this sense, bank offers from providers in the consumers' country of 
residence  may  not  be  easily  comparable  with  offers  from  providers  set  up  in  other 
Member States. 

To empower consumers by enabling them to make informed choices and enable 
them to take advantage of the single market 

Around  56  million  consumers  in  the  EU  do  not  have  a  bank  account  and  cannot 
therefore  fully  enjoy  the  benefits  of  the  single  market.262  Around  10%  of  those 
unbanked persons, i.e. about 6 million adults have tried to open an account and have 
been  refused.  These  unbanked  people  are  missing  out  on  several  benefits  such  as 
greater  safety,  cheaper  electronic  payments,  and  easier  access  to  less  expensive 
products and services online. It has also been estimated that thanks to the realisation 
of  the  Single  Euro  Payments  Area  (SEPA),  from  2006-2012,  that  EU  consumers 
using  electronic  payments  will  have  saved  on  average  EUR  129263  on  payment 
transactions.  The  single  market  will  only  be  truly  inclusive  if  it  benefits  every  EU 
citizen.  

The lack of clear and comparable information on bank fees results in consumers not 
fully  understanding  charges  incurred.  In  a  competitive  and  efficiently-functioning 
single market with a high level of consumer protection, all EU citizens would be able 
to search for the best product offered for their needs, be it in their own country or in 
another  Member  State.  Customer  mobility,  and  the  possibility  of  easy  switching, 
exerts a competitive pressure on payment account providers to improve quality and 
reduce  prices.  Without  EU  action,  the  identified  problems  related  to  the  lack  of  an 
EU-wide market will continue to lead to consumer detriment.  

262  Commission calculations based on data on the number of unbanked consumers from Measuring Financial Inclusion, 

The Global Findex Database, the World Bank, April 2012. 
263  SEPA: potential benefits at stake, Capgemini Consulting, 2007. 

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5.3. 

Allow  all  European  citizens  access  to  essential  services  and  the  opportunity  to 
benefit from the single market by promoting economic and financial inclusion 

• 

• 

• 

• 

• 

Without EU action it will be difficult to bring the advantages of the single market to 
all EU citizens.  

The need to balance increased competition and the use of market mechanisms with 
the need to guarantee that every citizen continues to have access to essential services 
of high quality at prices that they can afford. 

A  level  playing  field  at  EU  level  will  help  consumers  reap  the  full  benefits  of  the 
integration  of  the  European  financial  sector  by  facilitating  financial  inclusion 
enabling  all  consumers  to  fully  benefit  from  the  internal  market  (for  example  by 
participating  in  e-commerce  and,  therefore,  in  the  digital  market,  including  more 
competitive cross-border goods and services).  
Access  to  essential  services  including  basic  account  services264  contribute  to  active 
inclusion strategies aimed at the reintegration of the people furthest from the labour 
market. Therefore, it forms part of the delivering actions identified by the European 
Platform  against  Poverty  and  Social  Exclusion,  one  of  the  flagship  initiatives  of 
Europe  2020  aimed  at  achieving  inclusive  growth  in  the  EU.  Society  at  large 
(including public administration and non-financial services/product providers) would 
benefit  from  the  improved  conditions  of  the  functioning  of  the  internal  market  of 
retail financial services, thus contributing to the objectives of financial inclusion.  

An initiative on bank accounts has also long been cited by all EU institutions as an 
important element to improve the functioning of the single market. The 2012 March 
European Council welcomed the Commission’s intention to propose a new round of 
measures  to  open  up  new  growth  areas  in  the  Single  Market.  Similarly,  a  recent 
European Parliament report with recommendations to the Commission on Access to 
Basic  Banking  Services265  asks  the  Commission  to  come  forward  with  a  legal 
proposal addressing access to basic banking services by January 2013. Most recently, 
the Commission underlined the importance  of an  initiative to improve  the  payment 
account market in the Single Market Act II,266 and announced proposals in the area 
of transparency and comparability of bank fees and bank account switching as part of 
the Commission Work Programme for 2013.267 

What will happen if no EU action is taken? 
If  no  action  is  taken  at  EU  level,  market  fragmentation  will  persist  in  payment  account 
services. Since it is unlikely that member States will implement the Access Recommendation 
in full, basic payment accounts will be restricted to use in domestic markets, restricting access 
across borders. Moreover, significant future investment in domestic redirection services that 
are  technically  difficult  to  connect  with  schemes  in  other  Member  States,  or  increased 
diverging  national  approaches  on  the  development  of  payment  account  fees  will  result  in 
market fragmentation becoming further entrenched, threatening long-term market integration.  
Against this background, and as described in previous chapters, action from Member States 
alone  is  likely  to  result  in  different  sets  of  rules,  which  may  undermine  or  create  new 
obstacles  to  the  proper  functioning  of  the  internal  market  and  create  unequal  levels  of 

264  Together with various enabling services, such as healthcare, childcare, social housing, or life-long-learning. 
265  European Parliament Resolution 2012/2055(INI). 
266  "Single Market Act II - Together for new growth", COM(2012) 573 of 3 October 2012, page 16. 
267  "Commission Work Programme 2013", COM(2012) 629 of 23 October 2012, Annex I, page 5. 

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consumer protection in the EU. For example, a law on basic account services currently being 
prepared  in  Slovakia  will  restrict  the  use  of  those  services  to  Slovakia  alone.268  Common 
standards at EU level are therefore necessary to promote efficient and competitive conditions 
in the retail banking sector for the benefit of EU consumers and businesses. EU intervention 
will result in the smoother functioning of the internal market, with consumers and the banking 
industry benefiting from enhanced information on payment account fees, improved mobility 
and universal access to payment accounts. 
Is there a legal basis? 
The  Treaty  provides  for  action  to  ensure  the  establishment  and  functioning  of  an  internal 
market  with  a  high  level  of  consumer  protection  and  the  free  provision  of  services.  Such  a 
market  for  payment  accounts  is  far  from  completion  as  several  obstacles  exist  to  the  free 
provision of services and the creation of an internal market. These obstacles restrict the level 
of  cross-border  activity  on  the  supply  and  demand  sides,  reducing  competition.  Payment 
account providers may be less efficient than they could be and consumers may suffer. 
The legal basis for action is in Article 114 of the Treaty. Article 114 allows for the adoption 
of  "measures  for  the  approximation  of  the  provisions  laid  down  by  law,  regulation  or 
administrative  action  in  Member  States  which  have  as  their  object  the  establishment  and 
functioning  of  the  internal  market."  In  doing  this,  according  to  the  Treaty,  the  Commission 
will  take  a  high  level  of  consumer  protection  as  a  basis  for  action.  A  payment  accounts 
initiative based on Article 114 of the TFEU represents a step towards the establishment of a 
properly-functioning internal market and avoids distortion of competition in retail banking.  
The  measure  will  respect  the  principles  of  subsidiarity.  For  the  reasons  set  out  above  the 
envisaged aims cannot be achieved by Member States alone. Moreover, and as explained in 
this  section,  the  Commission  has,  without  success,  previously  attempted  a  'light  touch' 
approach  through  self-regulatory  initiatives  and  Recommendations.  EU  intervention  in  the 
areas of payment accounts is therefore justified on this basis.  

6. 

POLICY OPTIONS 

Although  directly  interlinked, this chapter describes  the  policy options  for  each  of the  three 
areas  analysed  in  this  impact  assessment  separately,  in  order  to  address  the  problems 
identified in Chapter 3. The policy options are not necessarily mutually exclusive and should 
not  therefore  automatically  be  viewed  as  alternatives.  Their  separate  presentation  allows 
analysis and comparison of the Options in greater detail. 
Importantly, to meet the objectives identified in Chapter 4, a combination of Options across 
the  three  areas  is  needed.  Chapter  8  concludes  that  a  bank  account  package  combining  the 
preferred sets of Options in each of the three areas would better ensure a coherent approach to 
the problems.   

6.1. 

Options for access to basic account services 

Several  policies  can  be  considered  to  address  the  problems  identified  and  achieve  the  set 
objectives. 

6.1.1.  Option 1: No action 

No further action is taken at EU level. Member States would still be encouraged to implement 
the Recommendation and the Commission would continue to monitor implementation. 

268  http://www.nrsr.sk/web/Default.aspx?sid=zakony/zakon&MasterID=4018  

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6.1.2.  Option 2: Ensure application of the provisions of the Recommendation 

This would ensure that the provisions of the Recommendation are applied either through an 
enhancement  of  the  regular  monitoring  of  the  implementation  and  application  of  the 
Recommendation  in  Member  States  by  the  European  Commission  (e.g.  scoreboard)  or  by 
requesting  Member  States  to  adopt  binding  rules  based  on  the  Recommendation.  Option  2 
may be combined with the variants of Option 3 and 4. 

6.1.3.  Option 3: Modify the provisions of the Recommendation relative to the beneficiaries 

This Option may be combined with Option 2 and 4. 

• 

Variant A: Introduce a universal basic payment account 

This would introduce a universal right for every EU citizen to open a basic payment 
account  in  any  EU  bank.  The  basic  payment  account  would  have  the  features 
provided  for  in  the  Recommendation,  other  than  the  condition  that  the  consumer 
must not already have a basic payment account in that Member State, which will not 
be retained. 

• 

Variant B: Introduce a right to a basic payment account at least for national residents 

This Option is based on Option 2 but would, additionally, introduce a right to open a 
basic  payment  account  for  at  least  national  residents.  Providers  (all  or  some 
depending  on  the  approach  chosen  by  Member  States)  would  be  obliged  to  offer  a 
basic  payment  account  even  if  the  consumer  already  had  another  account  in  that 
Member  State  and  regardless  of  his  financial  situation.  The  basic  payment  account 
would have the other features provided for in the Recommendation.  

• 

Variant  C:  Introduce  a  right  to  a  basic  payment  account  at  least  to  those  non-
residents with a link to the country where they wish to open an account  

This is based on Option 2 but would, additionally, introduce a right to open a basic 
payment account for non-residents. They would need to demonstrate a link with the 
country where they would like to open a basic payment account. This would require 
the definition of a list of criteria. Such a list could be developed through delegating 
powers to the European Banking Authority. The basic payment account would have 
the other features provided for in the Recommendation. 

6.1.4. 

6.1.4  Option 4: Improve the features of payment accounts 

These variants may be combined with one another and those of Option 2 and 3. 

• 

• 

Variant A: Enlarge the list of basic payment services to include internet banking and 
online purchasing 

This is based on Option 2 but would also expand the list of basic account services. 
This list of basic account services would include a possibility for the consumer to use 
internet banking and to make online purchases. 

Variant B: Enlarge the list of basic services to include a small overdraft or a 'buffer' 
facility 

This is based on Option 2 but would add to the features of a basic payment account, 
e.g.  small  overdraft  or  a  'buffer'  facility  (the  consumer  could  withdraw  a  minimum 
allowed sum even if the balance on his account was insufficient). 

• 

Variant C: indicate a minimum account balance that cannot be seized 

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Member States would be required to introduce an indication of a minimum balance 
which could not be seized by any creditor. This would provide indebted consumers 
with  access  to  a  very  limited  amount  of  money  allowing  them  to  pay  for  the  most 
basic needs. 

• 

Variant  D:  Ensure  that  the  features  of  the  payment  account  are  not  of  a 
discriminatory nature 

This  is  based  on  Option  2  but  would,  additionally,  ensure  that  the  features  of  the 
basic payment account cannot be applied in a discriminatory manner, i.e. by limiting 
the use of a debit card to the country where the account was opened. 

6.1.5.  Other options not retained 

Articles  20  and  21  of  TFEU  ensure  the  right  of  all  European  citizens  to  move  between 
Member States, which Court of Justice interprets as meaning that everyone should be treated 
the  same,  irrespective  of  their  nationality.  In  theory,  it  would  be  possible  to  introduce  an 
infringement  procedure  against  Member  States  which  have  implemented  laws  on  access 
allowing  providers  to  discriminate  against  consumers  for  non-residence  and  to  offer 
discriminatory payment instruments.  
Nevertheless, infringements can only be launched against Member States which have laws in 
place causing or permitting discrimination against non-residents, contrary to the Treaty, which 
are very few in the area of access to basic payment accounts. This approach would therefore 
penalise those Member States which had acted (albeit in a nationally-focused manner), whilst 
many  others,  which  have  not  implemented  any  measures  at  all  in  this  area,  would  be 
unchallenged. Consequently, this Option is ruled out at this stage.  

6.2. 

Options for presentation and ease of comparison of bank fees 

Several  policies  can  be  considered  to  address  the  problems  identified  and  achieve  the  set 
objectives. 

6.2.1.  Option 1: No action 

No  EU  action  is  taken  to  address  presentation  requirements  and  enhance  comparability  of 
bank fees. 

6.2.2.  Option 2: A standard price list to be provided as part of account opening procedures 

Fees  common  to  all  Member  States  would  be  identified  at  EU  level  and  supplemented 
nationally  to  cover  the  20  most  representative  fees  or  at  least  80%  of  key  charges  incurred. 
Common presentation requirements, which could include the introduction of a single form for 
ex-ante  disclosure  of  payment  account  fees,  and  requirements  regarding  availability  of  fee 
information  and  selection  criteria  for  the  most  common  fees,  would  be  established  at  EU 
level. Credit institutions would need to ensure that fee information was readily available to the 
public and specifically to prospective customers during the pre-contractual stage. 

6.2.3.  Option 3: Introduce the requirement to develop glossaries for bank fee terms 

Member  States  would  be  required  to  develop  glossaries  for  payment  fee  terms  at  national 
level. These would aim to provide consumers with the tools to overcome possible difficulties 
in  understanding  the  terminology  used  in  contractual  texts  relating  to  the  provision  of 
payment accounts by credit institutions.  

• 

Variant A: Glossaries containing non-harmonised terminology 

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Member States would set up a glossary comprising payment account fee terminology 
in use by retail banks in their territory, maintained by a designated competent public 
authority. Credit institutions would be required to inform and update the competent 
authority of their own fee terminology. 

• 

Variant B: Glossaries not based on fully harmonised terminology  

Member  States  would  develop  single  definitions  for  services  and  related  fees  in  a 
glossary.  While  credit  institutions  would  not  be  required  to  make  use  of  standard 
terminology as part of marketing and operations, they would be required to provide 
references  between  terminology  used  for  commercial  terms  and  the  standard 
terminology contained in the glossary. 

6.2.4.  Option 4: Introduce the requirement to set up independent fee comparison websites 

at Member State level 

This  foresees  the  use  of  independent  fee  comparison  tools  as  a  means  to  promote 
comparability and enhance common presentation requirements for payment account offers. 

• 

Variant  A:  a  single  official  website  within  each  Member  State  managed  by  a 
competent authority 

In  each  Member  State  one  comparison  site  shall  fulfil  this  requirement  under  the 
supervision of the EU. This website could be run and funded by a public body, who 
would  define  requirements  on  the  frequency  with  which  credit  institutions  would 
need to provide up-to-date fee information. 

• 

Variant B: Comparison sites licensed under an accreditation scheme 

The  development  of  accreditation  schemes  set  up  by  Member  States  under  the 
supervision of the EU. Accreditation schemes will set out standards for operators of 
comparison websites and will include a quality charter defining rules concerning the 
completeness and timeliness of fee information that credit institutions would have to 
provide.  Member  States  will  nominate  competent  public  authorities  to  monitor  the 
compliance of website operators and credit institutions. 

6.2.5.  Option 5: Introduce the requirement to provide representative examples of the cost 

of holding a payment account 

Requirements  would  be  established  to  provide  representative  examples  when  advertising 
payment accounts which would present major fees associated with an account and the main 
conditions that influence the cost of holding an account. They would be tailored to different 
usage patterns, which may be subject to differing degrees of standardisation as described in 
the variants below. 

• 

• 

Variant A: Banks set up own representative examples 

This  variant  would  not  prescribe  specific  usage  profiles,  although  minimum 
requirements on the variables to include would be harmonised at EU level. 

Variant B: Member States prescribe representative examples 

Under  this  variant,  a  number  of  usage  profiles  for  banks  will  be  predetermined  at 
Member  State  level.  Member  States  will  be  able  to  add  specificities  that  would 
render examples more representative of usage profiles in national contexts. 

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6.2.6.  Option  6:  Set  up  customer  usage  profiles  and  provide  a  cost  simulation  to 

prospective personal current account holders 

This Option would provide an annual cost estimate to a customer seeking to open a payment 
account at the pre-contractual stage, though a simulator, based on the information provided by 
the customer on usage patterns. The aim of this Option is to provide a means of comparing 
bank  offers  in  a  single  monetary  value  estimate  understandable  by  the  average  customer. 
Common  presentation  and  structural  requirements  would  accompany  this  Option,  together 
with the requirement to provide an itemised cost simulation, including estimated information 
on transaction/service level volumes in a paper or downloadable format. 

• 

• 

Variant A: Banks set up own customer profiles 

This  variant  does  not  prescribe  specific  usage  profiles  when  setting  up  cost 
simulations. 

Variant B: Member State prescribe customer profiles 

Under this variant, a number of usage profiles for banks will be pre-determined. 

6.2.7.  Option 7: Introduce EU standardised forms for the provision of ex-ante information 

on fees 

The introduction of a single form for ex-ante disclosure of all personal payment account fees, 
developed at EU level (similar to the Standard European Consumer Credit Information). 

6.2.8.  Option 8: Introduce an obligation to provide ex-post information on fees incurred 

It  would  be  mandatory  for  banks  to  provide  consumers  with  ex-post  information  on  fees 
incurred. The ex-post information would cover the same fee items as the ex-ante information. 
If  this  were  combined  with  Option  2,  it  would  allow  consumers  to  verify  and  analyse  the 
actual charges applied to their payment account and see where savings can be made. Ex-post 
information  would  be  provided  on  a  quarterly  /  bi-annual  /  annual  basis.  As  with  Option  2, 
common presentation requirements, which could include the introduction of a single form for 
ex-post disclosure of payment account fees, would be established at EU level. 

6.2.9.  Option 9: Introduce EU standardised forms for the provision of ex-post information 

on fees 

Credit institutions would provide consumers with a monthly, bi-annual or annual summary of 
the cost of all personal payment account fees developed at an EU level, using a standardised 
form. The form would be designed to provide an easy to understand analysis of the charges 
and  interest  rates  that  have  been  applied  to  the  consumer's  personal  current  accounts.  The 
charges incurred would be broken down into categories so consumers can see where savings 
could be made. The form would be developed by the European Commission on the basis of 
market testing and in consultation with industry and consumer organisations. 

6.2.10.  Other options not retained 

The list of Options does not include policy initiatives aimed at enhancing financial literacy. 
The Commission has already sought269 to assist stakeholders improve financial education by 
raising  awareness  of  low  financial  literacy;  by  encouraging  and  promoting  the  provision  of 
high-quality financial education within the EU, including the sharing of best practice; and by 
developing  certain  practical  tools.  As  indicated  in  Section  3.1  above,  improved  financial 
literacy  is  unlikely  to  significantly  impact  upon  the  payment  account  market  and  would  not 

269  COM(2007) 808. 

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solve consumers’ problems. 

6.3. 

Options for payment account switching 

Several  policies  can  be  considered  to  address  the  problems  identified  and  achieve  the  set 
objectives.  

6.3.1.  Option 1: No action 

No further action is taken at EU level. Credit institutions should still apply the EBIC Common 
Principles  on  bank  account  switching  but  would  not  need  to  take  any  further  measures  to 
improve their functioning and/or quality. 

6.3.2.  Option 2: Ensure that switching services follow the Common Principles  

This would ensure that the Common Principles are applied by all payment account providers 
across the EU. This could serve as a basis for Option 3 and could be combined with Option 4. 

6.3.3.  Option 3: Improve the effectiveness of the Common Principles 

These variants could be combined with Options 2 and 4. 

• 

Variant A: Improve the existing Common Principles at domestic level 

The requirements of this Option would be based on the Common Principles, but the 
Common  Principles  would  be  improved  by  introducing  provisions  to  improve 
information  on  the  existence  of  switching  services  (e.g.  obligatory  display  on  bank 
websites  and  provisions  to  ensure  that  staff  are  adequately  trained).  This  variant  of 
Option 3 could be combined with Option 2 and Variant A of Option 4. 

• 

Variant  B:  Broaden  the  scope  of  the  Common  Principles  to  EU-wide  cross-border 
switching 

The  process  would  be  based  on  either  the  existing  Common  Principles  or  the 
'improved' Common Principles as defined in Variant A of this Option. The Common 
Principles  would  additionally  apply  to  cross-border  switching,  including  the 
standardisation  of  the  time-periods  set  for  the  'new'  and  the  'old'  bank  to  perform 
their respective tasks and inclusion of provisions to facilitate cross-border switching 
(for  example,  by  applying  the  rules  established  in  the  home  Member  State  of  the 
'new'  bank  to  the  whole  switching  process).  This  variant  of  Option  3  could 
theoretically be combined with Option 2 and Variant B of Option 4.  

6.3.4.  Option 4: Set up an automatic redirection service for all receipts and payments from 

an old to a new account 

All receipts and payments routed to the old account would be redirected to the new account. 
The redirection service would be temporary, following the switch, but would need to operate 
for  a  sufficient  period  of  time  to  capture  annual  payments.  The  redirection  service  would 
provide the parties whose payments have been redirected with the new bank information of 
the customer (where possible). This could be combined with Options 2 and 3. 

• 

• 

Variant A: Introduce a domestic automatic redirection service 

This service would apply when both the  old and new account provider were in the 
same Member State.  

Variant B: Introduce an automatic EU-wide redirection service 

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This service would apply when both the  old  and new account provider were in the 
same or different Member States.  

6.3.5.  Option 5: Introduce payment account portability 

This option could be combined with Options 2 and 4. 

• 

• 

Variant A: Domestic payment account portability 

Consumers could transfer their account to a new bank in the same Member State as 
their old account and retain the same account number. 

Variant B: EU payment account portability 

Consumers could transfer their account to the new bank, which may be established 
either in the same Member State as the old account or in another Member State, and 
retain the same account number. 

6.4. 

Choosing the most appropriate policy instrument 

Action at the EU level must respect the principle of proportionality. The proportionality of a 
proposed measure depends upon the following considerations: 

• 

• 

• 

The  choice  of  instrument.  It  is  crucial  to  find  an  appropriate  balance  between  EU-
level  action  and  national  action.  The  proportionality  of  the  measures  will  depend 
upon  whether  a  Regulation,  Directive,  Recommendation  or  self-regulation  is 
preferred. 

The combination of measures. If a legislative instrument (Directive or Regulation) is 
favoured,  the  right  combination  of  principles-based  measures  and  more  specific 
requirements must be chosen.  

It  is  vital  to  ensure,  to  the  largest  extent  possible,  that  consumer  protection  is  not 
reduced.  

For each policy option, a wide range of potential policy instruments were considered. These 
include  self-regulation,  non-binding  measures  (Communication  and  Recommendation)  and 
binding measures (Directive or Regulation).  
A Communication is a tool used to promote measures or behaviour to Member States. Legal 
instruments  by  contrast  make  it  compulsory  for  Member  States  and  market  participants  to 
comply. The idea of a Communication was discarded at an early stage for all policy options. 

6.4.1. 

Self-regulation 

As indicated in Section 2.4 above, attempts of EU level self-regulation to improve the clarity, 
comparability and transparency of account fees and to ensure that account fee information is 
easily  available  to  consumers  have  failed.  Moreover,  the  2008  Common  Principles  for 
payment  account  switching,  were  implemented  in  the  Member  States  to  varying  degrees. 
Generally,  the  application  of  the  Common  Principles  was  evidenced  to  be  unsatisfactory, 
which may, to a large degree, be the result of a lack of monitoring and enforcement measures 
contained within a self-regulatory approach.  
Given that transparency and switching have been the subject of unsuccessful self-regulatory 
measures in the past, further self-regulation would not be effective.  

6.4.2.  Non-binding measures 

The  Commission's  Recommendation  on  access  to  a  basic  payment  account  was  adopted  in 
July  2011.  Member  States  were  asked  to  "take  the  necessary  measures  to  ensure  the 

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application  of  this  Recommendation  at  the  latest  6  months  after  its  publication."  The 
Commission would "assess the measures taken by 1 July 2012" and on that basis, "propose 
any  necessary  action,  including  legislative  measures  if  needed,  in  order  to  ensure  that  the 
objectives of this Recommendation are fully met". The Commission services assessment of the 
measures taken by Member States to comply with the Recommendation270 confirms that many 
Member  States  took  insufficient  steps  to  ensure  its  implementation.  Furthermore,  it  is  clear 
that the short time frame permitted to comply with the Recommendation is not the reason why 
Member  States  have  not  yet  acted:  in  reporting  to  the  Commission,  several  Member  States 
specifically stated that they do not intend to take any measures to comply at national level. In 
any event, the Recommendation fails to address all the problems outlined in this analysis.  
Whilst  the  Recommendation  could  be  broadened  to  address  all  identified  problems,  a  non-
binding  instrument  does  not  guarantee  adequate  implementation  at  national  level.  Member 
States may express the same reluctance as previously, or be prevented from taking action by 
the  existence  of  contravening  national  provisions  and  a  lack  of  domestic  political  will  to 
amend  and/or  abolish  them.  EU  level  non-binding  measures,  such  as  a  Recommendation, 
could  be  used  also  in  the  field  of  transparency  and  comparability  of  fees  or  to  promote  a 
smooth  payment  account  switching  process  in  the  single  market.  This  approach,  however, 
would  leave  discretion  to  Member  States  and  market  operators  as  to  whether  and  how  to 
intervene, if at all. 

6.4.3.  Binding measures 

The introduction of a binding measure is the most effective and efficient way of achieving the 
set  objectives.  Binding  EU  measures  such  as  EU  legislation  in  the  form  of  a  Regulation  or 
Directive  could  be  established  to  different  degrees:  harmonisation  or  setting  of  specific  and 
directly applicable measures. 
Only a binding legislative instrument can guarantee that the policy options are introduced in 
all 27 Member States and that the rules are enforceable. For example, an analysis of the data 
on  average  account  penetration  shows  that  in  those  Member  States  where  there  is  no 
framework  in  place,  weighted  average  account  penetration  is  70%  (27%  in  Romania  and 
Bulgaria;  80%  in  other  Member  States)  compared  with  88%  in  those  Member  States  which 
have  industry  based  charters  and  96%  in  those  Member  States  with  a  legal  framework  in 
place.271 

7. 

IMPACT ANALYSIS AND COMPARISON OF POLICY OPTIONS 

The preferred set of policy options for each of the three areas is indicated in bold. The tables 
illustrate how each of the policy options contributes to meeting the objectives and their cost-
effectiveness in doing so when compared to the 'no action' option. The following scoring is 
used:  (cid:57)(cid:57)(cid:57)  (strong  positive  contribution),  (cid:57)(cid:57)  (moderate  positive  contribution),  (cid:57)  (weak 
positive  contribution),  (cid:56)(cid:56)(cid:56)  (strong  negative  contribution),  (cid:56)(cid:56)  (moderate  negative 
contribution),  (cid:56)  (weak  negative  contribution)  and  ≈  (neutral  contribution).  The  impact  on 
stakeholders follows a similar approach. 

270  Commission Staff Working Document: National measures and practices as regards access to basic payment accounts - 

Follow-up to the Recommendation of 18 July 2011 on access to a basic payment account, 22.08.2012 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/followup_en.pdf 

271  Calculations by Commission services on the basis of Member States' notifications, Special Eurobarometer on Retail 
Financial Services, European Commission, February 2012, p. 31, http://ec.europa.eu/internal_market/finservices-
retail/policy_en.htm. For the purpose of calculations, Italy has been included under "industry charters" as while the law 
entered into force on 28 December 2012, the convention setting out the conditions for access only entered into force as 
of June 2012. 

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For the purposes of this assessment, the same methodology had been used to assess costs and 
benefits  in  relation  to  the  ease  of  comparison  and  presentation  requirements  for  fees  and 
payment  account  switching.  The  analysis  of  the  access  to  a  basic  payment  account  uses  the 
methodology developed in an external cost-benefit analysis in 2010.272 
After analysing different options per area in Sections 7.4 to 7.6 below, the preferred sets of 
options are analysed on a cumulative basis in Chapter 8. This chapter addresses the impacts of 
different  combinations  of  options  on  a  package  basis  in  order  to  identify  the  best  overall 
approach to addressing the objectives in this initiative. 

7.1.  Methodology 

Quantitative data on retail financial services, particularly data that is comparable on a pan-EU 
basis, is often difficult to find. The report draws on a wealth of data sources including pan-EU 
studies  conducted  on  behalf  of  the  Commission  (e.g.  external  reports,273  Eurobarometers,274 
mystery shopping exercise275) as well as national sources (e.g. studies276 and surveys277) when 
considering  the  costs  and  benefits.  The  data  on  costs  and  benefits  provided  in  this  impact 
assessment and the methodology used for calculating them are based on two external studies: 
the Study on the costs and benefits of policy actions in the field of ensuring access to basic 
account  –  Final  Report  by  the  Centre  for  Strategy  and  Evaluation  Services278  and 
Quantification  of  the  economic  impacts  of  EU  action  to  improve  fee  transparency, 
comparability  and  mobility  in  the  internal  market  for  bank  personal  current  accounts  by 
GHK  Consulting  Limited.  Both  studies  used  desk  research  and  surveys  of  all  relevant 
stakeholders,  e.g.  the  financial  service  industry,  to  establish  the  regulatory  and  market 
baselines, qualitatively identify the relevant costs and benefits, and calculate where possible 
appropriate  monetary  estimates.  The  methodologies  used  to  assess  the  efficiency  of  options 
consider  both  quantified  and  non-quantified  costs  and  benefits  to  stakeholders.  Annex  VI 
provides a detailed summary of the calculation of costs and benefits, the assumptions used in 
calculations and a detailed cost and benefit table per option. 

7.1.1.  Access 

The  methodology  used  is  based  on  that  developed  in  the  Study  on  the  costs  and  benefits  of 
policy actions in the field of ensuring access to basic account – Final Report.279 This report 
was produced for the Impact Assessment on the Recommendation on access to basic payment 
services.280  This  provides  consistency  and  comparability  with  the  aforementioned  Impact 
Assessment.  

272  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study. 
Ibid. 

273 
274  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p. 29, 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm 

275  Consumer Market Study on the consumers’ experiences with bank account switching with reference to the Common 

Principles on Bank Account Switching, GfK, January 2012, 
http://ec.europa.eu/consumers/rights/docs/switching_bank_accounts_report_en.pdf  

276  Rapport de Georges Pauget et Emmanuel Constans sur la tarification des services bancaires", 07/2010 

(http://www.ladocumentationfrancaise.fr/var/storage/rapports-publics/ 104000365/0000.pdf) 
277  Tarifs et mobilité bancaires: le désolant palmarès des Banques, UFC Que Choisir, October 2010 
278  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study. 
Ibid. 

279 
280  SEC(2011) 906: Impact Assessment on the Commission Recommendation on access to a basic payment account. 

EN 

63 

   EN 

                                                 
Where  possible,  new  data  has  been  incorporated  into  this  document.  First,  the  affected 
consumer population is established (i.e. how many consumers could potentially benefit from 
each policy option). This calculation is based on 3 potential baseline scenarios: an optimistic 
scenario (10 million consumers open an account), a realistic scenario (6.4 million consumers 
open  an  account)  and  a  pessimistic  scenario  (2  million  consumers  open  an  account). 
Consequently,  a  range  of  costs  and  benefits  are  presented  in  this  report;  the  lower  range 
corresponds  to  the  pessimistic  scenario  and  the  top  of  the  range  corresponds  to  the  most 
optimistic scenario. For certain policy options, e.g. Options 3B and 4B, the baselines for the 
potential  number  of  consumers  affected  are  reduced  according  to  the  potentially  affected 
population  (e.g.  the  population  of  consumers  impacted  under  Option  3B  would  be  smaller, 
therefore  the  baselines  are  adjusted  accordingly).  Second,  the  costs  and  benefits  for  each 
stakeholder  under  each  option  are  established.  For  example,  the  cost  for  consumers  of  the 
annual  management  fee  is  identified.  Third,  these  costs  and  benefits  are  multiplied  by  the 
estimated  costs/benefits  to  achieve  a  total.  Finally,  the  results  are  discounted  to  take  into 
account  whether  all  Member  States  would  be  affected  or  whether  some  Member  States 
already apply the policy option. 

7.1.2.  Transparency of fees and switching 

The study Quantification of the economic impacts of EU action to improve fee transparency, 
comparability and mobility in the internal market for bank personal current accounts aimed 
to establish a baseline scenario that would comprise current regulatory and market conditions. 
This  baseline  scenario  was  to  serve  as  a  basis  to  assess  the  impact  of  the  policy  options 
considered in this Impact Assessment on stakeholders.  
It was necessary for the study to reflect the gradual nature of impacts expected from policy 
action  designed  to  create  a  coherent  framework  for  the  provision  of  information  on  bank 
account fees and for consumer mobility within the EU. For this purpose, the study builds the 
baseline  scenario  over  a  period  of  10  years.  Similarly,  monetised  costs  and  benefits  are 
expressed over a 10 year timeframe. 
Monetised costs and benefits are expressed as incremental amounts attributable to EU action 
under the assessed options. In order to isolate incremental costs the study applied a discount 
factor  to  the  amounts  computed,  to  reflect  the  distance  between  the  aggregate  of  regulatory 
and market frameworks within Member States and the proposed action within each option.  
The  study  fieldwork  made  use  of  desk  research,  stakeholder  surveys  and  a  standing  expert 
panel. It covered 16 Member States.281 
As  the  above  mentioned  study  did  not  provide  cost  estimates  for  two  switching  options 
(introduction of a redirection service and payment account portability), these were estimated 
by  Commission  staff  based  on  other  available  studies,  as  indicated  in  the  methodological 
annex (Annex VI). 

7.2. 

Costs 

The  costs  considered  are  those  incurred  by  payment  services  providers  (mainly  credit 
institutions), Member States and consumers.  
Payment services providers 
Since  the  options  under  consideration  generate  new  information  requirements  and  services, 
the  main  cost  to  account  providers  in  the  form  of  one-off  costs  adapting  IT  systems  and 
internal  processes  to  fulfil  such  requirements,  in  addition  to  changes  to  marketing  and 

281  Austria, Belgium, Bulgaria, Germany, Denmark, Spain, Finland, France, Italy, Lithuania, Luxembourg, Latvia, 

Netherlands, Poland, Portugal, United Kingdom. 

EN 

64 

   EN 

                                                 
promotional  material,  management  time  spent  reviewing  pricing  strategies  and  internal 
communication, and staff training. These cost items are common to most options but generate 
varying  cost  estimates  depending  on  the  time  and  resources  considered  necessary  to 
implement an option and on the nature of acquisition costs, e.g. in reconfiguring IT systems to 
collect  or  extract  new  information.  For  improved  access  to  account  services  there  would  be 
the  recurring  costs  of  managing  new  accounts,  a  proportion  of  which  may  be  recuperated 
through  account  management  fees.  Providers  would  also  potentially  face  lost  revenue  from 
consumers switching to cheaper or more appropriate accounts, although this may be offset by 
consumers switching in their favour. Non-quantifiable costs for providers include the costs of 
staff managing accounts that run into overdraft accidentally and an increased risk of fraud. 
Member States 
Generally,  overall  costs  to  Member  States  are  expected  to  be  less  significant  than  costs  to 
credit institutions. Member States would face one-off costs for introducing the policy options 
and  for  monitoring  compliance,  the  size  of  which  would  depend  on  the  instrument  chosen. 
Additionally, a number of options would result in specific costs to public authorities, such as 
operating  a  comparison  website  under  transparency/comparability  Option  4A.  Other  initial 
outlay for Member States could involve developing standard pre-defined bank usage profiles 
or  standardised  price  lists.  Where  Member  States  must  incur  set-up  and  development  costs, 
credit  institutions  (or  their  representative  organisations)  generally  contribute  to  the 
development process and bear a significant proportion of the costs, as stated above.  
Consumers 
Possible  costs  to  consumers  have  not  generally  been  quantified  for  switching  and  fee 
transparency.  For  options  relating  to  access,  it  is  assumed  that  consumers  will  pay  a 
'reasonable' annual (recurring) account management fee. 
In line with our individual assessment, 'no action' in each of the three areas is not considered 
to  contribute  towards  achieving  the  objectives  set  out  in  this  initiative.  As  a  result,  no 
financial costs associated with the 'no action' scenario were identified. 

7.3. 

Benefits 

Payment services providers  
Financial  services  providers  would  benefit  from  improved  access  to  payment  services  as  a 
result  of  a  reduced  reliance  on  cash  and  a  move  towards  cheaper  payment  services.  Non-
quantifiable  benefits  include  the  potential  benefits  of  being  able  to  market  other  goods  and 
services to a broader customer base, the reduced costs of managing cash, an increase in their 
capital base, and wider reputational benefits. 
Member States/society 
For access, the benefits to Member States would arise from government and public authority 
savings in terms of improved efficiency in the management and distribution of social security 
payments,  using  bank  transfers  rather  than  sending  cheques  in  the  post.  Non-quantifiable 
benefits include reduced benefit and tax fraud.  
Enterprises  would  also  be  able  to  use  cheaper  means  of  payments,  for  example,  utility 
companies would more easily be able to collect payments via direct debits rather than rely on 
cash  or  cheque  payments.  Enterprises  would  also  face  non-quantifiable  benefits  from  being 
able  to  sell  their  goods  and  services  to  consumers  with  basic  accounts  in  another  Member 
State through electronic payments, and from any consequent growth in the market. 
The  benefits  to  society  at  large  would  result  from  increased  awareness  about  bank  fees 
alongside the potential to switch easily. This would increase competitive rivalry among credit 
institutions,  leading  to  a  gradual  convergence  in  prices  for  payment  accounts  within  the 

EN 

65 

   EN 

internal market. Although not quantified for the purposes of this impact assessment, this is a 
broad, long-term impact that should affect the majority of consumers who are less active in 
seeking information about the cost of their payment account. 
Consumers 
Consumers would benefit from savings made due to the reduction of errors in the switching 
process; from the reduced direct cost of switching; from the use of cheaper means of payment; 
from discounts by using electronic payments; and from online savings through purchases of 
other goods and services, where relevant.  
Further benefits include changes to consumer switching behaviour and, where relevant, better 
account  management.  The  impact  of  benefits  accruing  to  consumers  through  better  account 
management is calculated for the options covering ex-post bank fee information requirements. 
This benefit is assumed to accrue due to availability of better information for consumers about 
charges incurred; this could change consumption patterns and bring about cost savings. 
The  impact  of  a  possible  convergence  in  prices  within  the  EU  caused  by  increased 
transparency  in  payment  account  pricing  –  and  thus  increased  competition  –  could  not  be 
included into the framework of quantified benefits without considering the possible impact of 
price changes to other financial services products. Such knock-on effects on prices could not 
be quantified. Other non-quantifiable benefits for consumers include more accessible funds, a 
reduced  risk  of  theft,  access  to  a  broader  range  of  products  and  services,  more  easily 
accessible accommodation and/or employment, and improved consumer confidence.  
In line with our individual assessment, the impacts of the 'no action' option in all three areas 
are not considered to contribute towards achieving the objectives set out in this initiative. As a 
result no benefits associated to the 'no action' scenario were identified. 

7.4. 

Comparison of options and assessment of their impact: access to basic account 
services 

While Table 9 assesses the effectiveness and efficiency of the individual policy options, it is 
important to underline that the options are not necessarily mutually exclusive: some may be 
combined  to  create  an  effective  and  efficient  set  of  measures  that  addresses  the  problems 
outlined  and  objectives  set.  It  is  equally  important  to  assess  which  policy  instrument  would 
best achieve the objectives. 

Table 9: effectiveness of the policy options for access to account services 

1. No action 
2. Ensure application of the provisions of the 
Recommendation 
3. Modify the provisions of the Recommendation relative to the 
beneficiaries 
3(A) Introduce a universal right to a basic payment account 

3(B) Introduce a right to a basic payment account at least for 
national residents 
3(C) Introduce a right to a basic payment account at least to 
those non-residents with a link to the country where they wish to 
open an account  
4. Improve the features of the basic payment account 

4(A) Enlarge the list of basic services to include internet 
banking and online purchasing 
4(B) Enlarge the list of basic services to include a small 
overdraft or a 'buffer' facility 

EN 

Specific 
objectives 

Facilitating 
access to 
payment 
accounts 
0 

(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

66 

Effectiveness in achieving the objectives below 
Efficient and competitive Single Market with a high 
level of consumer protection 

Reduce the 
number of 
unbanked 

Access to 
payment 
means 

Cross-
border 
activity 

Improved 
awareness 

Efficiency (cost 
effectiveness) in 
achieving all 
listed objectives

0 

(cid:57) 

0 

(cid:57) 

0 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:56)(cid:56)(cid:56) 

0 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

0 

(cid:57) 

(cid:57) 

(cid:56) 

(cid:57) 

(cid:56)(cid:56) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57) 

(cid:56) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:56) 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
4(C) Indicate a minimum account balance that cannot be seized 

4(D) Ensure that the features of the account are not of a 
discriminatory nature. 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:56) 

(cid:57)(cid:57) 

(cid:56)(cid:56) 

(cid:57)(cid:57) 

Impact on effectiveness and efficiency compared to the situation today, 

(cid:57)(cid:57)(cid:57) (Strong) – (cid:57)(cid:57) (Moderate) – (cid:57) (Weak) positive contribution  
(cid:56)(cid:56)(cid:56) (Strong) – (cid:56)(cid:56) (Moderate) – (cid:56) (Weak) negative contribution – ≈ neutral contribution 

It is crucial to ensure the right of access to a basic payment account to all EU citizens. Option 
1  assumes  that,  potentially,  a  few  additional  Member  States  may  implement  the 
Recommendation on access and the Commission would continue to monitor implementation. 
Since  the  adoption  of  the  Recommendation  by  the  Commission  in  July  2011,  only  one 
Member  State  (Italy)  has  taken  measures  to  comply  with  the  Recommendation,  while  two 
other Member States had already introduced measures (Belgium and France). Almost half of 
the Member States have failed to take any measures at all despite not having a framework in 
place  (Austria,  Bulgaria,  Czech  Republic,  Cyprus,  Greece,  Latvia,  Malta,  Poland,  Romania, 
Slovakia, Slovenia and Spain) and some have stated that it is unnecessary to take any action in 
the near future (Austria, Bulgaria, Czech Republic, Cyprus, Spain, Latvia and Malta) despite 
the fact that the Recommendation invited them to do so by the end of 2011. Consequently, it 
is unlikely that many Member States will implement the Recommendation. Furthermore, the 
potential alternative means of payment to a basic payment account, e.g. pre-paid cards, have 
proven to be insufficient since they lack features (such as access to certain payment services, 
like credit transfers) and are more expensive than a basic payment account (see Section 3.1). 
Option 1 would therefore be ineffective in ensuring better access to accounts for vulnerable 
and mobile consumers.  
In  terms  of  reducing  the  number  of  unbanked  consumers  across  the  EU,  Options  2  and  3A 
would be equally effective: they would both ensure that residents and non-residents alike had 
the right to open a basic payment account. Public authorities are divided about the merits of 
this  approach;  on  the  one  hand,  some  feel  that  any  initiative  to  ensure  access  to  a  basic 
payment  account  should  address  both  residents  and  non-residents,  on  the  other  hand,  other 
public  authorities  argue  that  the  initial  emphasis  should  be  ensuring  the  right  of  access  to 
residents  of  that  Member  State,  as  cross-border  access  is  not  significant  to  those  currently 
without  an  account.282  This  opinion  is  not  shared  by  consumers'  representatives  who  find  it 
equally important to provide mobile consumers with a basic payment account.283 However, as 
regards  access,  Options  3B  and  3C  would  not  be  as  effective  since  both  would  limit  the 
availability  of  a  basic  payment  account  compared  to  Options 2  and  3A;  further,  Option  3B 
excludes non-residents, and Option 3C excludes migrants who do not have any link with the 
country  where  they  apply  for  an  account.  According  to  the  European  Savings  Banks  Group 
migrant  consumers  should  be  required  to  demonstrate  "at  least  an  objective  economic  link 
with the country in which they want to open an account".284  
The effectiveness of these options would depend on the policy instrument chosen. Consumer 
representatives  argue  that  soft  law,  including  a  Recommendation,  would  not  help  solve  the 
problem of financial exclusion – a view supported by the inaction of the industry and Member 
States  as  illustrated  in  Section  3.2.1.  The  financial  services  industry  considers  that  non-
binding  measures  are  sufficient  and  that  the  problem  is  better  addressed  at  national  level  to 
take into account specificities of domestic markets. If an EU-measure is to be adopted, in the 
view  of  the  European  Association  of  Public  Banks,  it  "should  be  kept  as  general  as 

282  Summary of responses to the public consultation on financial inclusion: ensuring access to a basic bank account, 
14.09.2009. http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary_en.pdf 

283  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 14. 
284 

European Savings Banks Group response to the 2012 Public consultation on bank accounts (see footnote 11), p. 8  

EN 

67 

   EN 

 
                                                 
possible."285 Therefore an alternative relevant solution would be a legally binding instrument, 
e.g. a Directive, which would provide Member States with a certain degree of flexibility, thus 
recognising  differences  at  national  level,  while  at  the  same  time  ensuring  action.  Member 
States could, for instance, set a limit for the price of a basic payment account; choose whether 
or not to designate selected or all providers to offer basic payment accounts; and decide on the 
content and target of campaigns informing the public about access rights (as foreseen by the 
Recommendation).  This  flexibility  is  particularly  necessary  given  the  unequal  degree  of 
development  of  the  banking  sector  and  varying  price  levels  of  banking  services  in  Member 
States; due to different banking traditions (e.g. strong credit unions or regional banks in some 
Member  States);  and  because  of  divergent  levels  of  payment  account  penetration  across  the 
EU. For example, Option 3A obliges all the banks to provide basic payment accounts whereas 
under  Option  2,  Member  States  could  decide  who  should  provide  the  accounts.  Similarly, 
under  Option  3C,  Member  States  would  need  more  flexibility  because  they  would  need  to 
decide  on  the  criteria  or  documents  necessary  to  recognise  the  non-residents'  link  with  that 
country. Such criteria are likely to vary across the EU and it is not appropriate to standardise 
them. 
It  is  assumed  that  Options  4A,  4B  and  4C  could  attract  a  number  of  unbanked  consumers 
because  of  useful  additional  features  they  would  offer.  Option  4D  would  attract  many 
unbanked consumers, in particular mobile consumers, since it would allow for an account to 
be  used  identically  across  the  EU.  Potentially,  Option  4A  would  allow  consumers  to  save 
money through the purchase of cheaper products and services online. Option 4B would ensure 
access  to  a  small  overdraft  or  buffer  facility  while  Option  4C  would  guarantee  that  a 
minimum balance on the consumer's account is protected against seizure. Option 4A would be 
most  likely  to  attract  additional  consumers  relative  to  Option  2,  whereas  Option  4C  would 
only  attract  the  few  consumers  that  feared  account  seizure.  Option  4B  would  only  have  a 
minimal impact and might even increase unbankedness relative to Option 2: some, if not all, 
providers  may  assess  creditworthiness  in  line  with  responsible  lending  obligations,  which 
could  restrict  access.  Accordingly,  in  terms  of  ensuring  access  to  all  basic  payment  means, 
Option  4A  would  be  most  effective,  enabling  consumers  to  shop  and  conduct  their  banking 
transactions online.  
Again, a flexible instrument implementing these options (for instance a Directive) would need 
to  be  proposed  so  that  Member  States  can  ensure  that  banks  do  not  charge  consumers 
excessively  for  these  additional  account  features.  Stakeholders,  including  the  financial 
services industry, agreed that a basic payment account should be offered at reasonable cost.286 
A  flexible  instrument  could  also  ensure  that  providers  would  have  the  possibility  to  offer 
different  'online  purchase'  facilities,  envisaged  under  Option  4A,  and  it  could  help  better 
define unlawful discriminatory practices at national level (under Option 4D). Neither Option 
4B  nor  Option  4C  would  broaden  the  range  of  payment  services  that  are  available  to 
consumers  because  none  of  them  provides  for  any  additional  payment  services  with  a  basic 
payment  account.  Option  4A  would  additionally  be  in  line  with  the  European  Parliament 
recommendations  on  access  to  a  basic  payment  account,  which  states:  "[t]he  legislation 
should  enable  the  user  of  a  basic  payment  account  to  make  any  essential  payment 
transactions such as receiving income or benefits, paying bills or taxes and purchasing goods 
and services via both physical and remote channels using mainstream national systems."287 

285 

European  Association  of  Public  Banks  response  to  the  2012  Public  consultation  on  bank  accounts  (see  footnote 
11), p. 6 

286  Summary of responses to the public consultation on access to a basic payment account, 25.01.2011, p. 10, 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary-2010_en.pdf  

287  European Parliament Resolution 2012/2055(INI), Recommendation 3. 

EN 

68 

   EN 

                                                 
Options 2  and  3A  would  be  most  effective  in  ensuring  access  to  cross-border  banking 
services. Under both options residents and non-residents would have the right to open a basic 
payment account anywhere in the EU. Option 3C would also be somewhat effective, affording 
access to non-residents who have a link with the Member State in which they wish to open an 
account.  Finally,  Options  4A  and  4D  would  contribute  to  increased  cross-border  activity, 
facilitating cross-border trade in goods and services by opening the online market to all EU 
citizens  and  preventing  providers  from  restricting  the  use  of  the  basic  payment  accounts  to 
national  markets.  This  would  allow  consumers  to  use  the  features  of  their  basic  payment 
account in another Member State. Option 4D would not be as effective alone: for the cross-
border  and  domestic  right  of  access  to  be  equally  useful  to  consumers,  a  pan-European 
framework providing general rules for all Member States is most appropriate. It would allow 
mobile  consumers  to  understand  what  rights  they  have  in  terms  of  access  to  basic  payment 
accounts  both  at  home  and  abroad,  while  Member  States  would  still  have  the  flexibility  to 
adapt legislation to local conditions. This is considered essential by the financial industry288 
and public authorities.289 
All options would be equally effective in  improving  consumers’ awareness of the right to a 
basic  payment  account:  all  assume  better  implementation  of  the  Recommendation,  which 
mandates  that  Member  States  launch  public  awareness  campaigns  about  the  availability  of 
basic payment accounts. This is, in the opinion of consumers, crucial to promote access.290 
In  conclusion,  a  combination  of  binding  measures  that  allow  Member  States  flexibility  in 
implementing Options 2 and/or 3A, alongside Options 4A and 4D, would be most effective in 
tackling the problems in the market and achieving the objectives set. 

Table 10: Access to basic account services – costs and benefits of the policy options 

288  European Banking Federation response to the 2012 Public consultation on bank accounts (see footnote 11), p. 13. 
289  Summary of responses to the public consultation on access to a basic payment account, 25.01.2011, p. 3, 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary-2010_en.pdf  
290  BEUC response to the Commission Consultation on access to a basic payment account, 25.01.2011, p. 9, 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm  

EN 

69 

   EN 

                                                 
Total EU benefits (million EUR) 
Consumer benefits: 

One-off benefits 
Recurring annual benefits 

Payments services provider 
benefits: 
Recurring annual benefits 
Member State benefits: 

One-off benefits 
Recurring annual benefits 
Enterprises 

Recurring annual benefits 
Total EU costs (million EUR) 

Consumer costs: 

One-off costs 
Recurring annual costs 

Op. 2 
542-
2711 

542-
2711 
18-89 

18-89 
18-89 

0 
18-89 
32-160 

32-160 
Option 
2 
108-
542 

0 
108-
542 

Payments services provider costs: 

71-356 

610-3050 
(upper end) 
20-100 
(upper end) 
20-100 
20-100 

0 
20-100 
36-180 
(upper 
range) 
36-180 
Option 3(A) 

122-610 
(upper 
range) 
0 
122-610 
(upper 
range) 
80-400 
(middle end) 

Op. 3(A) 
610-3050 
(upper end) 

Op. 3(B) 
510-2548 
(mid- range) 

Op. 3(C) 
526-2630  
(mid- range) 

Op. 4(A) 
236-1179 
(upper end) 

Op. 4(B) 
-14 to -68 

Op. 4(C) 
45-226 

Op. 4(D) 

68-339 

Not quantified 

510-2548 
(mid- range) 
17-84  
(mid- range) 
17-84 
17-84 

0 
17-84 
31-150  
(mid-range) 

31-150 
Option 3(B) 

526-2630  
(mid-range) 
17-86  
(mid-range) 
17-86 
17-86 

0 
17-86 
31-155 
(mid-upper 
range) 
31-155 
Option 3(C) 

236-1179 
(upper end) 
2-11 
(upper end) 
2-11 
2-11 
(upper end) 
0 
2-11 
16-80 

16-80 
Option 4(A) 

105-526 

22-108 

-14 to -68 

45-226 

68-339 

-0.4 to - 2 

1-7 

-1.8 to -9 

-0.4 to - 2 
-0.4 to - 2 

0 
0 
-0,8 to -4 

1-7 
1.5-7 

0 
1.5-7 
3-13 

-0,8 to -4 
Option 
4(B) 
-11 to -57 

3-13 
Option 
4(C) 
9-45 

-1.8 to -9 
2-11 

0 
2-11 
4-20 

4-20 
Option 4(D) 

22-108 

0 
22-108 

0 
105-526 

0 
22-108 

0 
-11 to -57 

0 
9-45 

69-345 

15-74 

-2 to -9 

6-30 

19-94 

102-510 
(middle 
range) 
0 
102-510 
(middle 
range) 
67-334 
(middle 
range) 
0 

One-off costs 

Not  

0 

0 

0 

Recurring annual costs 

71-356 

80-400 

67-334 

69-345 

15-74 

Enterprise costs: 
Member State costs: 
One-off costs  
Recurring annual costs 

0 
3.02 
1.13 
1.89 

0 
3.40 
1.27 
2.12 

0 
3.02 
1.13 
1.89 

0 
3.02 
1.13 
1.89 

0 
0 
0 
0 

Not 
quantif. 
Not 
quantif. 
0 
0.25 
0.09 
0.16 

0 

6-30 

0 
0.25 
0.09 
0.16 

0 

19-94 

0 
0.38 
0.14 
0.24 

In  terms  of  efficiency,  there  would  be  no  one-off  costs  or  benefits  for  consumers  brought 
about by implementing Options 2, 3A, 4A or 4D. Annual recurring costs for consumers under 
Option 2 are estimated at between EUR 108-542 million; annual benefits would total between 
EUR  542-2711  million,  depending  on  the  number  of  consumers  who  opened  a  payment 
account. Benefits (and costs) would be slightly higher under Option 3A. Benefits from online 
account facilities (Option 4A) are estimated at between EUR 236-1179 million and benefits 
from  non-discriminatory  means  of  payment  (Option  4D)  at  between  EUR  68-339  million, 
while costs are estimated at between EUR 22-108 million for each of Options 4A and 4D. 
Overall,  then,  benefits  for  consumers  considerably  outweigh  the  costs.  The  costs  for 
consumers would primarily consist of account operation fees and occasional charges for failed 
transactions,  whereas  benefits  would  arise  from  discounts  from  reduced  use  of  expensive 
money  transmission  mechanisms  and  cheques,  in  addition  to  discounts  from  electronic 
payments and online purchases. 
For providers, under Option 2, there would also be no quantifiable one-off costs or benefits. 
Recurring  annual  costs  for  providers  are  estimated  at  EUR  71-356  million,  while  benefits 
would  total  EUR  18-89  million,  depending  on  the  number  of  consumers  who  opened  a 
payment  account.  Costs  incurred  by  providers  would  be  those  for  operating  basic  payment 
accounts. Benefits would result from fees imposed on consumers for the use of the accounts, 
as  well  as  an  increased  client  base.  The  costs  for  providers  would  increase  significantly  if 
Option  3A  were  introduced,  since  all  banks  would  be  obliged  to  offer  a  basic  payment 
account  to  any  consumer  even  if  he/she  already  holds  another  regular  account.  Such  costs 
would be disproportionate to the set objectives; even consumer representatives consider basic 
payment  accounts  should  only  be  provided  to  those  who  do  not  yet  have  another  payment 

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account  in  the  country  where  they  apply  for  one.291  Providers  would  also  incur  the  costs  of 
switching  consumers  who  wanted  to  change  their  regular  and  usually  more  expensive 
payment  account  to  a  basic  account.  These  additional  costs  for  providers  resulting  from  the 
introduction  of  Option  3A  would  be  substantial,  but  are  not  quantifiable.  The  costs  for 
providers  would  be  between  EUR 15-74  million  for  Option  4A  and  EUR 19-94  million  for 
Option  4D.  Costs  for  banks  under  Option  4D  would  be  slightly  higher;  they  would  need  to 
ensure that all the account features could be used identically by consumers domestically and 
cross-border.  The  benefits  from  Option  4A  would  only  be  EUR 2-11  million  while  the 
benefits from Option 4D would be negative. Consequently, it is likely that costs for providers 
would outweigh the benefits; the extent of this net loss would depend on the extent to which 
providers  could  recuperate  any  costs  from  fees  charged  to  consumers  and  other  non-
quantifiable  benefits.  The  potential  losses  would  be  substantially  greater  under  Option  3A 
than Option 2; accordingly, Option 2 is the more efficient option, since it would be equally 
effective and proportionate in addressing the problem identified. 
With  the  introduction  of  Option  2,  Member  States  would  incur  one-off  costs  of  EUR 1.13 
million  and  recurring  annual  costs  of  EUR 1.89 million.  This  includes  the  cost  of 
implementing, monitoring and enforcing new legislation. These costs would slightly increase 
if Option 2 were combined with Options 4A and 4D. The costs could, however, be lower than 
indicated  because  the  necessary  enforcement  mechanisms  already  exist  at  national  level  in 
some  Member  States  and  would  not  need  to  be  established  from  scratch.292  Member  States 
would  incur  recurring  non-cumulative  benefits  of  between  EUR 18-89 million  per  annum  if 
the three options were combined, since they could make more payments of social benefits by 
cost-effective  electronic  transfer.  It  is  assumed  that  Member  State  benefits  would  also  be 
slightly higher with a greater number of consumers opening a basic payment account because 
there  would  be  less  fraud  than  associated  with  paper  systems  and  tax  collection  would  be 
cheaper. These benefits are non-quantifiable. 
Option  2  would  bring  recurring  benefits  to  utility  firms  of  between  EUR  32-160  million, 
depending on the number of consumers who opened a payment account (pessimistic, realistic 
or  optimistic  scenarios).  Energy  and  water  providers  would  benefit  from  reductions  in 
transaction costs since newly banked consumers would switch to direct debit payments, which 
is a cheap payment collection method for utility companies. If Option 2 were combined with 
Options 4A and 4D, these benefits would increase – particularly Option 4A in particular when 
combined with Option 4A. Greater benefits may be unlocked if Option 3A replaced Option 2, 
since more consumers would open a basic payment account, but these benefits are unlikely to 
outweigh its high cost for providers. 
In conclusion, the preferred package is Options 2, 4A and 4D. This package would ensure the 
right of access to a basic payment account for both residents and non-residents and to all basic 
means of payment by providing the possibility to purchase online and use internet banking. 
Further,  a  better  implementation  of  the  Recommendation  under  Option  2  would  facilitate 
cross-border  access  to  basic  banking  services  and  would  raise  consumer  awareness  of  the 
availability of basic payment accounts. Finally, Option 4D prevents providers from restricting 
the  use  of  a  basic  payment  account  to  domestic  transactions.  Option  3A,  allowing  for 
universal access of consumers to a basic payment account, must be excluded since it would 
generate excessive and disproportionate costs for providers and Member States. 
It is highly unlikely that a non-binding instrument could be effective in ensuring consumers' 
right of access to basic payment account with all the features of the account envisaged under 

291  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 14. 
292  2012 Public consultation on bank accounts (see footnote 11), p. 11.  

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71 

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Options  2,  4A  and  4D,  though  the  financial  industry  favours  such  a  solution.293  It  has  been 
clearly demonstrated, following the adoption of the Recommendation on access in 2011, that 
non-binding  measures  cannot  deliver  results  in  this  area.  The  Recommendation  was 
implemented  by  just  three  Member  States  while  several  other  EU  countries  introduced 
legislations  or  self-regulation  only  partly  complying  with  the  Recommendation,  causing 
substantial divergences between Member States to develop. Some Member States also limited 
the use of the account exclusively to their national market. Such varying rules make it more 
difficult for mobile consumers to open a basic payment account abroad and, as a consequence, 
may prevent many of them from attempting to open one cross-border. On the other hand, it 
has been demonstrated (and is broadly supported by stakeholders294) that measures on basic 
payment accounts should allow Member States some flexibility allowing for the specificities 
of national markets.  
The costs to Member States imposed by EU-level measures on access would not depend on 
the number of unbanked consumers in a given country: administrative costs are likely to be 
similar regardless of account penetration. They will rather depend on whether rules on access 
have been implemented domestically. Benefits may differ depending on account penetration; 
the  more  banked  consumers,  the  more  social  benefits  can  be  paid  through  cheaper  bank 
transfer.  Therefore,  Member  States  with  currently  more  unbanked  consumers  are  likely  to 
benefit  more  from  measures  on  access.  Romania  and  Bulgaria,  with  the  highest  unbanked 
populations in the EU, would benefit most, but Poland, Hungary, Lithuania have almost 30% 
of their citizens above the age of 15 without a payment account.295  
The preferred package of options on access would be most costly for Member States which 
have  not  yet  introduced  any  legislation  in  this  area.296  They  would  need  to  implement 
measures from scratch and thereafter, monitor compliance and enforce it where necessary. It 
is assumed that monitoring and enforcement could be carried out by existing authorities which 
would substantially limit the costs. 
Belgium, France and Italy, which adopted legal measures in line with the Recommendation, 
would incur lower costs because they would only need to introduce the additional provisions 
provided by Options 4A and 4D, i.e. the possibility for consumers to purchase online and to 
use  internet  banking  as  well  as  provisions  on  non-discrimination.  Also,  monitoring  of 
compliance  and  enforcement  would  not  be  very  costly  for  them  because  it  can  be  assumed 
that  provisions  exist  under  their  current  legislation  and  that  there  are  national  authorities 
designated to this end. 
Member  States  which  have  introduced  legislation  or  self-regulation  not  complying  (fully) 
with  the  Recommendation  would  need  to  align  these  measures  accordingly.297  In  general 
terms,  it  can  be  expected  that  amending  the  existing  legislation  will  be  less  costly  than 
introducing a new law. It will be more expensive if self-regulation is to be replaced by a legal 
instrument. Member States which already have a law or self-regulation, even if not complying 
with  the  Recommendation,  would  obtain  fewer  benefits  because  some  previously  unbanked 
consumers will have already opened a basic payment account in these countries. Nevertheless 
more consumers may be attracted by the new features of the account which were not available 
earlier (e.g. online purchase facility or non-discriminatory provisions), and even more in the 

293  European Banking Federation response to the 2012 Public consultation on bank accounts (see footnote 11), p. 12. 
294  2012 Public consultation on bank accounts (see footnote 11), p. 4. 
295  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p.50-52, http://www-

wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2012/04/19/000158349_20120419083611/Rendered/
PDF/WPS6025.pdf 

296  Austria, Bulgaria, Czech Republic, Cyprus, Greece, Latvia, Malta, Poland, Romania, Slovakia, Slovenia and Spain   
297  Portugal, Denmark, Estonia, Finland, Lithuania, Luxembourg, Sweden, Germany, Hungary, Ireland, Netherlands, and 

the UK. 

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72 

   EN 

                                                 
Member States where some of the payment account features were limited to domestic markets 
(e.g. the Netherland and Hungary). 

Table 11: Options for access to basic account services – Impact on main stakeholders 

Consumers and society 

1. No action 
2. Ensure application of provisions of Recommend. 
3. Modify provisions of Recommend. (beneficiaries) 
3 (A) Universal right to a BP account 
3 (B) Right to a BP account at least for national residents 

3 (C) Introduce a right to a basic payment account at least 
to those non-residents with a link to the country where 
they wish to open an account  

4. Improve the features of the basic payment account 
4 (A) Enlarge the list of basic services to include 
internet banking and online purchasing 
4 (B) Enlarge the list of basic services to include a small 
overdraft or a 'buffer' facility 
4 (C) Oblige MS to have in their legislation an indication 
of a minimum account balance that cannot be seized 
4 (D): Features are not of a discriminatory nature. 

0 
(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

Financial services 
industry 
0 
(cid:56) 

(cid:56)(cid:56)(cid:56) 

≈ 

(cid:56) 

(cid:56)(cid:56) 

(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56) 

(cid:56) 

Member States 

0 
(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:56)(cid:56)(cid:56) 

(cid:57) 

Non-financial service 
product providers 
0 
(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

Impact on effectiveness and efficiency compared to the situation today, 

(cid:57)(cid:57)(cid:57) (Strong) – (cid:57)(cid:57) (Moderate) – (cid:57) (Weak) positive contribution  
(cid:56)(cid:56)(cid:56) (Strong) – (cid:56)(cid:56) (Moderate) – (cid:56) (Weak) negative contribution – ≈ neutral contribution 

7.5. 

Comparison of options and assessment of their impact: presentation and ease of 
comparison of bank fees 

Effectiveness of policy options 
This  analysis  assesses  the  efficacy  of  the  policy  options  under  consideration  in  light  of  the 
detailed  operational  objectives  identified.  The  problems  discussed  above  highlight  the 
complexity of this area, which raises barriers to consumers when they seek to understand and 
compare bank fees. Divergent approaches have been taken by Member States to address these 
issues;  moreover,  price  differences  across  Member  States  indicate  substantial  market 
fragmentation.  
Table  12  below  assesses  the  effectiveness  and  efficiency  of  the  individual  policy  options, 
which  are  not  necessarily  mutually  exclusive  and  may  be  combined  to  better  address  the 
problems outlined and achieve the set objectives, even though they aim to address the same 
set of weaknesses. 
The  'information  provision'  policy  options  can  be  broken  down  into  two  groups:  the  first 
focuses  on  the  ex-ante  provision  of  information  (mainly  during  the  advertising  and  pre-
contractual stages); the second focuses on the ex-post provision of information. The group of 
options dealing with ex-ante information can be further broken down into two broad groups. 
The first group focuses on fee information presentation while the second group analyses tools 
that would support comparison and clarity of information. 
Certain criteria must be taken into account when assessing the use of information as a means 
to  support  consumer  choice.  Proposals  must  be  capable  of  reaching  a  large  range  of 
consumers  and  must  be  effective  across  the  board.  It  is  also  vital  to  maintain  a  balance 
between  complete  and  comprehensive  information  and  providing  too  much.  The  OECD's 
Consumer  Policy  Toolkit  states  that:  "Long  and  overly  complex  information  risks  being  of 
little  value  to  consumers.  Moreover  excessive  information  can  lead  consumers  to  feel 
overwhelmed."298  A  Commission  study  that  aimed  to  measure  behavioural  responses  to 
different ways of presenting bank fee information to consumers indicated that highly detailed, 
mainly  numerical  information  may  lead  to  uncertainty  in  consumers  who  then  choose  to 

298  "Consumer Policy Toolkit" – OECD, Paris 2010, p.86. 

EN 

73 

   EN 

 
 
 
 
 
 
 
 
 
 
                                                 
ignore  that  information  as  a  consequence.299  The  proposals  should  additionally  provide 
common EU standards, in order to counter further market fragmentation as a result of isolated 
regulatory action in domestic markets. At the same time, it is also important that EU action 
takes account of domestic market specificities. 

Table 12: Effectiveness of the policy options for ease of comparison of bank fees and presentation requirements 
Effectiveness in achieving the objectives below 
Operational objectives 

Consumers 
receive clear, 
complete and 
comparable 
information 

Consumers  
enabled to 
understand 
bank offers and 
assess value for 
money 

1. No action 
2. Standard price list 

0 

(cid:57)(cid:57)(cid:57) 

3. National glossaries 
for bank fee terms  
3(A) non-harmonised 
terminology 
3(B) fully harmonised 
terminology  
4. Comparison websites  
4(A) Single national 
website 
4(B) Accreditation 
scheme 
5. Representative 
examples 
5(A) set-up by banks 
5(B) prescribed by M. 
States  
6. Cost simulation 
6(A) set-up by banks 
6(B) prescribed by 
Member States 
7. EU standardised 
forms for ex-ante 
information  
8. Banks obliged to 
provide ex-post 
information  
9. EU standardised 
forms for ex-post 
information on fees 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:56) 

(cid:57)/≈ 

(cid:56) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

0 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)/≈ 

(cid:57)/≈ 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

Payment 
account 
offers are 
easy to 
compare 

0 

Help 
consumer 
choice 
towards offer 
best 
matching 
needs 
0 

Increase 
consumers 
awareness of 
charges 
actually paid 

0 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57) 

(cid:57) 

≈ 

≈ 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

≈ 

≈ 

(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)/≈ 

(cid:57) 

(cid:57)/≈ 

(cid:57)/≈ 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)/≈ 

(cid:57)(cid:57) 

(cid:57)/≈ 

(cid:57) 

(cid:57) 

Efficiency (cost 
effectiveness) in 
achieving all listed 
objectives 

Reduce 
direct 
financial 
costs of 
switching to 
consumers 

0 

(cid:57)(cid:57) 

≈ 

≈ 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

0 

(cid:57)(cid:57)(cid:57) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

≈ 

(cid:57)/≈ 

≈ 

(cid:57)/≈ 

(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

Impact on effectiveness and efficiency compared to the situation today, 

(cid:57)(cid:57)(cid:57) (Strong) – (cid:57)(cid:57) (Moderate) – (cid:57) (Weak) positive contribution  
(cid:56)(cid:56)(cid:56) (Strong) – (cid:56)(cid:56) (Moderate) – (cid:56) (Weak) negative contribution – ≈ neutral contribution 

Without action (Option 1), the comparability and presentation of payment account fees would 
not be improved, remaining unclear to consumers. The current levels of market fragmentation 
would increase as Member States continued to take uncoordinated action to address the issues 
identified  in  the  problem  section.  From  a  policy  and  regulatory  point  of  view  this  option 
hinders regulatory convergence between Member States. It also prevents further integration, 
since  the  harmonising  impact  of  options  presented  below  and  in  Annex  III  –  albeit  with  a 
longer-term view – would not take effect. 
In the 2012 public consultation on bank accounts, all consumers supported the need for EU 
action on transparency and comparability of bank account fees in order to allow an EU-wide 
level playing field. More mixed views emerged from the Member States participating to the 

299  Bank fees behaviour study (2012, TNS Opinion Ltd), results of the multivariate analysis. 

EN 

74 

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consultation.300  Some  favoured  EU  level  initiatives  and  cross-border  coordination  (e.g. 
Estonia, Austria and relevant public authorities in other Member States, such as the Hungarian 
Financial Supervisory Authority, and the Central Banks of Ireland and Lithuania). A number 
of other Member States stressed the usefulness of EU level initiatives, while recognising the 
inherent difficulties of such an approach (Belgium, Spain and France). Others acknowledged 
the need for an intervention to tackle this issue, but advocated national action first (Hungary 
and  Poland).  The  UK  did  not  recognise  the  need  for  EU  action  in  this  field.  Most  financial 
services  industry  respondents  indicated  that,  if  EU  action  were  to  be  pursued,  it  should  be 
flexible and take account of efforts made at national level. It was also stressed that EU action 
in  these  areas  will  be  required  when  an  EU  retail  financial  market  is  truly  achieved,  thus 
tackling the existing differences among national rules governing these areas. 
If no action is taken then the payment account market would not benefit from the advances at 
EU  level  in  the  payments  market  achieved  through  SEPA.  Citizens  would  not  be  able  to 
clearly  distinguish  between  price  advantages  brought  about  by  SEPA  for  direct  debits  and 
credit transfers if the price of the underlying payment account remains opaque, continues to 
exhibit significant differences in prices for equivalent payment account offers, and remains a 
complex  product. Meanwhile  credit institutions wishing to establish  business  across  borders 
will have to continue to comply with different sets of rules and incur costs in adapting their 
processes  and  operations  to  different  national  requirements.  Consumers  living  in  Member 
States where bank infrastructure is less developed and the provision of daily banking services 
is  more  costly  would  not  benefit  from  the  arrival  of  new  market  entrants  who  operate  lean 
processes and provide good services at competitive prices. 
Options 2 and 7 focus on ex-ante fee presentation requirements, through standard form price 
lists. They foresee the definition and use of standard terminology for fee items. As discussed 
in  the  problems  section,  the  use  of  differing  terminology  by  credit  institutions  affects  the 
ability of consumers to compare offers. Both Options 2 and 7 can address this issue as they 
will  provide  fee  information  in  a  clear  and  comparable  way.  These  Options  have  similar 
characteristics  to  other  forms  of  EU  standard  pre-contractual  information  in  retail  financial 
services such as SECCI301 and ESIS.302 The use of an EU standard price list is essential both 
in  domestic  and  cross-border  contexts  as  it  establishes  the  same  requirements  for  the 
presentation of fees within Member States and across the EU.  
However  Options  2  and  7  differ  in  two  respects:  The  first  concerns  the  extent  of  fee 
standardisation; the second concerns whether standardisation occurs at EU or national level. 
Under Option 2, the price list would involve the ex-ante disclosure of payment account fees. 
Fees  common  to  all  Member  States  would  be  identified  at  EU  level  and  supplemented 
nationally  to  cover  the  20  most  representative  fees  or  at  least  80%  of  key  charges  incurred.  
Common presentation requirements, which could include the introduction of a single form for 
ex-ante  disclosure  of  payment  account  fees,  and  requirements  regarding  availability  of  fee 
information and selection criteria for common fees across the EU, would be established at EU 
level.  Option  2  allows  for  the  harmonisation  of  the  most  commonly  used  fees  at  EU  level, 
while  permitting  Member  States  flexibility  to  add  fee  items  more  relevant  to  domestic 
markets.  This  approach  was  supported  by  the  majority  of  responses  to  the  public 
consultation.303 Some Member States recognised that even with the aid of national initiatives, 
whether through legislation or self-regulation, bank fees often remain complex. Some of them 

300  As indicated in Section 2.2, public authorities from 14 EU Member States replied to the 2012 Public Consultation on 

Bank Accounts. 

301  Standard European Consumer Credit Information. 
302  European Standard Information Sheet. 
303  2012 Public consultation on bank accounts (see footnote 11). 

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supported EU level action on standardised terminology (EE and AT) and others agreed on the 
usefulness  of  EU  actions,  while  recognising  the  technical  difficulties  entailed  by  such  an 
approach  (BE  and  ES).  Consumers,  the  financial  services  industry  and  public  authorities 
indicated  that  the  full  standardisation  of  fee  terminology  could  bring  about  the  unintended 
consequence of standardising products. They also mentioned the risk of information overload 
to consumers. 
Option 7 approximates SECCI and ESIS more closely since it foresees full EU standardisation 
of fee terminology and corresponding disclosure requirements in an EU standard form price 
list.  However  the  types  of  fees  that  comprise  the  cost  of  a  payment  account  cannot  be 
combined  into  a  single  measure,  as  with  the  Annual  Percentage  Rate  of  charge  for  loans, 
which forms the basis for cost information in both SECCI and ESIS. 
Given the wide range of fees for payment accounts and their differing relevance to domestic 
markets, Option 7 would not achieve the stated objectives. Standardising all fee terminology 
at EU level would be complex; not all payment instruments are commonly used throughout 
the EU: cheques are common in France but not used at all in Belgium. The result could be that 
EU  standard  fees  would  not  only  be  overly  cumbersome  to  be  effective,  but  they  may  also 
lead  to  confusion  by  requiring  disclosure  of  fee  items  that  may  not  be  relevant  to  a  large 
number of EU citizens. 
Option  3  (Glossaries)  should  not  be  considered  as  a  stand-alone  option  since  it  does  not 
address information about bank offers as such, neither in terms of prices nor of the services 
offered.  Therefore  glossaries  are  not  able  to  fulfill  operational  objectives  without  being 
combined with other options. As with Options 2 and 7, glossaries are closely linked to the use 
of  standardised  terminology.  They  need  to  be  sufficiently  comprehensive  to  be  useful.  This 
Impact  Assessment  assessed  two  alternative  approaches  to  the  development  of  glossaries  as 
information  tools.  The  first  (Option  3A),  foresees  the  development  of  a  single,  reference 
glossary  within  each  Member  State  providing  standard  term  definitions,  while  the  second 
(Option 3B), is a single glossary that would  collect different definitions for fees in use within 
credit  institutions.  Both  alternatives  analysed  are  likely  to  result  in  an  overly-cumbersome 
document to be useful. This is particularly true for 3B that would contain a larger number of 
items  and  a  significant  degree  of  duplication  of  terms.  The  public  consultation  showed  that 
Member  States  have  diverging  views  on  the  role  of  glossaries.  Most  of  them  stressed  the 
usefulness of these tools when developed at  the national level. Some respondents supported 
EU  level  intervention  in  this  area,  while  noting  the  difficulty  to  accomplish  it;  others, 
considered  any  intervention  to  improve  glossaries  unnecessary.  However,  a  definition  of 
terms is essential to all other options under consideration where terminology is used. Yet it is 
inherent to Option 2, which foresees the use of standard terminology. 
Within  the  subset  of  options  comprising  tools  to  facilitate  comparison  and  clarity  of  fees, 
Option 4 (comparison websites) provides the means for consumers to review several payment 
accounts  in  a  single  place,  online.  This  lowers  search  costs  when  compared  to  all  other 
options  under  assessment  that  require  consumers  to  collect  separate  information  from 
different  credit  institutions  as  a  first  step.  Online  comparison  tools  have  other  positive 
attributes such as their ability to present large amounts of information in a structured way and 
to  balance  the  level  of  detail  provided  to  the  viewer  according  to  their  needs,  through  drill 
down or pop-up menus. They also lend themselves well to other forms of information, such as 
service  quality  or  convenience  indicators  for  different  service  providers.  The  use  of 
comparison sites is generally assessed positively  in other industries.304 For example,  in  July 

304  Commission Staff Working Paper: "The functioning of the retail electricity markets for consumers in the European 

Union", SEC(2010) 1409. 

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2012  the  European  Energy  Regulators  developed  guidelines  of  good  practice  for  price 
comparison  tools  in  the  field  of  energy  supply.305  The  recommendations  highlight  the  key 
requirements of price comparison tools (such as independence, transparency, exhaustiveness, 
clarity,  user-friendliness  and  accessibility),  which  can  ensure  neutral  and  objective 
information to consumers. 
In  the  2012  public  consultation  on  bank  accounts  this  was  the  preferred  tool  for  enhancing 
transparency  and  comparability  of  bank  fees.  The  financial  services  industry  generally 
supported  the  development  of  comparison  websites,  but  stated  that  they  should  remain 
voluntary,  in  particular  if  existing  initiatives  function  well.  A  few  respondents,  however, 
pointed  out  the  importance  of  public  intervention  on  these  websites,  in  the  form  of  a 
supervisory or management role (e.g. Banking Associations in the Czech Republic, Italy and 
the Netherlands). Member States generally acknowledged the importance of developing tools 
to enhance transparency and comparability, while stressing the need to carefully assess their 
costs and effectiveness. Some replies pointed to the possibility of binding requirements to set 

up  such  tools,  should  self‐regulatory  regimes  not  lead  to  satisfactory  results,  as  well  as  the 

need for public supervision. 
In order to be truly effective, comparison sites should provide unbiased, timely and accurate 
information.  This  impact  assessment  identified  two  approaches  to  address  the  issue  of 
independence. The first approach (Option 4A), would entail a single comparison website per 
Member State managed by the responsible public authority. As an alternative (Option 4B), a 
website  accreditation  scheme  could  be  established,  defining  quality  criteria  for  website 
operators  to  obtain  accreditation.  These  criteria  could  include  requirements  to  disclose 
potential conflicts of interest, ensure minimum market coverage and to ensure timeliness and 
accuracy of fee information. Participation on the part of credit institutions would be voluntary.  
In  our  view,  Option  4B  is  superior.  This  preference  recognises  the  fact  that  an  increasing 
number of comparison websites operate across the Union. EU action would aim to establish 
common  minimum  standards  for  accreditation,  which  Member  States  will  be  able  to  adopt 
without modifying the structures which have emerged naturally and without limiting access to 
private operators, whose adherence would be voluntary. The merits of accreditation schemes, 
though in other industry sectors are also supported by BEUC.306 
Options 5 and 6 are aimed at helping consumers make product choices that best match their 
needs. Both options take account of the variable nature of some categories of fees and could 
provide  a  better  understanding  of  the  costs  of  an  account  over  a  given  period  of  time  than 
other options that provide unit fee information alone, such as Options 2 and 7.  
Both representative examples (Option 5) and personalised cost simulations (Option 6) would 
need  to  establish  a  set  of  consumer  consumption  profiles  that  are  sufficiently  representative 
and  that  apply  to  a  broad  range  of  consumers.  We  explored  two  approaches  with  varying 
degrees  of  standardisation;  the  first  approach  would  allow  credit  institutions  to  tailor  usage 
profiles  to  the  individual,  while  the  second  approach  foresees  a  mandatory  set  of  standard 
usage  profiles  established  at  Member  State  level.  Stakeholder  responses  to  the  public 
consultation  highlighted  weaknesses  in  both  approaches.  While  according  to  consumers  the 

305  CEER (Council of European Energy Regulators): "Guidelines of Good Practices on Price Comparison 

Tools", 10 July 2012, available at: http://www.energy-regulators.eu  

306  BEUC's response to the CEER consultation "Energy: Price Comparison Tools" refers to successful accreditation scheme 

Confidence Code in the United Kingdom that is run by Consumer Focus. 

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first  approach  could  lend  itself  to  methodological  bias  and  hamper  comparison  between 
different bank offers, the financial services industry did not favour the second approach that 
would  generalise  the  use  of  representative  examples  and  risks  standardising  products.  In 
addition,  both  approaches  raise  concerns  as  to  whether  consumers  would  be  able  to  locate 
their own usage patterns within available profiles. 
Both representative examples and personalised cost simulations are better adapted to provide 
information on specific elements of cost. Their effectiveness varies depending on the way an 
account is priced. Representative examples are effective in providing concise information on a 
number of limited variables, such as overdraft cost information. Cost simulations are mostly 
adapted  to  variable  elements  of  fees  but  are  less  relevant  to  one-off  costs.  If  representative 
examples  are  adapted  to  different  usage  profiles,  their  use  as  advertising  tools  may  become 
cumbersome,  unless  they  are  tailored  to  specific  target  groups  of  customers.  Finally  cost 
simulations are not widely in use and only provided on a voluntary basis. All of these issues 
point against a generalised use of these tools as a means to ensure comparable information is 
provided in a structured form. 
Options  8  and  9  concern  the  provision  of  ex-post  information  on  fees  to  payment  account 
holders. The ex-post information options complement the options for ex-ante fee information 
assessed  above  and  allow  consumers  to  monitor  their  actual  expenditure.  Further,  they 
facilitate  the  comparison  of  continuing  fees  and  could  encourage  switching  of  payment 
accounts. Option 8 would provide the ex-post information on the same standardised fee terms 
as Option 2 does on an ex-ante basis. Option 9 complements Option 7 as it provides ex-post 
information on all fee items.  While credit institutions are expected to incur costs in updating 
their  information  systems  to  adapt  to  this  approach,  most  of  them  have  already  adopted  the 
practice  of  providing  consumers  with  fee  summary  statements  as  a  result  of  national 
regulation. In the public consultation, the industry also stressed the importance of striking a 
balance  between  transparency  with  customers  about  charges  and  the  risk  of  providing 
excessive  and  complex  information.  If  this  option  is  combined  with  Option  2,  the  greatest 
benefit would be achieved by providing a summary of information in standardised price lists 
that cover major fees. 
Options 8 and 2 combined would provide Member States with a degree of flexibility, allowing 
them to tailor the fees to national specificities. As Options 9 and 7 are based on all fees, they 
do  not  retain  this  flexibility.  Most  respondents  to  the  public  consultation  from  the  financial 
services industry recalled the current practices that have been already developed and used in 
terms  of  providing  consumers  with  statements  on  a  regular  basis.  Consequently,  Options  8 
and  2  are  considered  to  be  more  effective  in  providing  clear  and  concise  information  to 
consumers that is truly relevant to their needs. 
The analysis in this section and in Annex III indicate that Options 2, 4B and 8 are the optimal 
package of options for transparency/comparability when combined. Options 3, 5, 6, 7 and 9, 
demonstrate a number of weaknesses which risk the objectives not being met. Combined, this 
package  would  provide  consumers  with  relevant  ex-ante  and  ex-post  fee  information, 
presented  in  a  clear  and  comparable  format.  Consumers  would  understand  how  much  they 
would be, and actually were charged for key services. This provides an excellent basis for fee 
comparison across providers on a comparison website and could facilitate switching.  
Efficiency of policy options and impact on stakeholders 
This section describes the impact on stakeholders and focuses on Options 2, 4B and 8, as the 
package  of  options  that  were  considered  most  effective  above.  Table  13  below  provides  a 
summary of quantified costs and benefits for all relevant stakeholders. Annex III and Annex 
VI  provide  a  more  detailed  description  of  costs  and  benefits  for  all  options  for  presentation 
and ease of comparison of bank fees.  

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All options impose costs on stakeholders. These mostly fall on credit institutions. All options 
give rise to relatively similar types of costs. In the main, they relate to: adapting IT systems; 
marketing  and  advertising  materials;  internal  compliance;  the  cost  of  training;  and 
disseminating  material  to  consumers.  The  extent  of  costs  depends  on  the  time  and  effort 
required to implement the proposals within each option. The combined costs of Options 2, 4B 
and 8, amount to between EUR 737 million and EUR 1247.76 million. However some major 
items,  such  as  the  cost  of  updating  IT  systems,  internal  compliance  and  training  costs,  will 
generate cost synergies for the combined set of preferred options.  The impact on an aggregate 
basis  of  other  major  items  of  expenditure  is  expected  to  approximate  the  cost  estimates 
derived on an individual option basis. These comprise mainly recurring costs of disseminating 
standard  form  price  lists  and  fees  summary  statements  amounting  to  EUR  144.32  –  432.96 
million from 2013 to 2022. Other relevant non-cumulative costs are one-off costs in adapting 
marketing  as  a  result  of  the  introduction  of  standard  fee  lists  (EUR  83.21-138.69  million); 
adapting account statements to provide ex-post information (EUR 13.62 - 27.25 million); and 
total one-off costs attributed to website operators to comply with accreditation requirements 
(EUR 5.09 -10.18 million). 
As indicated in Table 13, long-term costs to Member States are not expected to be significant. 
Synergies are expected in the recurring costs of monitoring and enforcement, although there 
will be partial cumulative costs arising from different monitoring requirements for each of the 
three options.  

Table 13: Presentation requirements and ease of comparison of bank fees – costs and benefits of the policy options 
Option 3.A 

Option 4.A 

Option 3.B 

Option 4.B 

- 
- 

- 
- 

584.87 

Total EU Benefits (million EUR)  Option 1  Option 2 
Consumer benefits: 
Change to switching behaviour 
Better account management 
Credit institution benefits: 
Cross-border cost savings 
Business opportunities 
Total EU costs (million EUR) 
Credit institution costs: 
one-off 
recurring 
Comparison website operators 
One-off 
recurring 
Member State costs: 
one-off 
recurring 

0.05–0.08 
0.60-1.17 

- 
- 

- 
- 

- 
- 

- 
- 

95.95-163.03 
183.17-255.79 

Not quantifiable 

Not quantifiable

Not quantifiable 

731.08 

731.08 

Not quantifiable 

 Not quantifiable 

Not 
quantifiable 

Not 
quantifiable 

11.66-23.58 
149.67-192.32 

40.35-72.76 
334.11-442.78 

13.75  –  21.81 
49.36  –  98.72 

- 
- 

- 
- 

- 
- 

- 
- 

0.02–0.05 
0.82-1.56 

0.08-0.11 
0.99-1.95 

0.76-2.86 
14.04-20.95 

0.32-0.65 
4.77-9.53 

0.36-0.66 
3.48-6.74 

Total EU benefits 
(million EUR) 
Consumer benefits: 
Change switching behaviour 
Better account management 
Credit institution benefits: 
Cross-border cost savings 
Business opportunities 
Total EU costs (million EUR) 
Credit institution costs: 
one-off 
recurring 
Member State costs: 
one-off 
recurring 

Option 5.A 

Option 5.B 

Option 6.A 

Option 6.B 

Option 7 

Option 8 

Option 9 

146.22 

146.22 

219.32 

219.32 

438.65 

1462.16 
2702.57 

292.43 
954.48 

Not 
quantifiable 

Not 
quantifiable  

Not 
quantifiable  

Not 
quantifiable  

Not quantifiable 

 Not 
quantifiable  

 Not 
quantifiable  

265.44-463.30
323.68-347.76

299.71-522.34 
362.97-390.94 

420.77-691.71 
2 572.48- 3 682.59

461.21-757.51 
2 821.51-4 036.32

148.89-252.07 
224.89-297.51 

192.42-326.31 
260.37-492.45 

345.71-681.55 
587.74-1100.48

0.02-0.03 
0.71-1.40 

0.08-0.12 
0.94-1.85 

0.02-0.03 
0.71-1.40 

0.08-0.12 
0.99-1.95 

0.01-0.02 
0.33-0.64 

0.07-0.11 
0.81-1.59 

0.03-0.05 
0.71-1.40 

Consumers  are  expected  to  derive  the  greatest  benefit  from  this  package  of  options.  The 
package  will  provide  a  regulatory  basis  to  facilitate  comparison  of  bank  offers  and  ensure 
clear  information  is  provided  both  before  and  after  acquiring  a  payment  account.  This 
package also takes into account differing levels of regulation currently in Member States and 
is  expected  to  provide  comparable  consumer  protection  to  all  EU  citizens  in  the  payment 

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account  market.  Although  benefits  for  the  three  options  are  not  cumulative,  the  impact  on 
consumer  switching  behaviour  is  expected  to  hover  around  the  higher-level  estimate 
calculated  for  Option  8,  amounting  to  EUR  1462.16  million  from  2013  to  2022.  Similarly, 
potential benefits as a result of improved account management (as per Option 8) are expected 
to be EUR 2702.57 million from 2013 to 2022.  
Benefits would accrue to credit institutions, though these are not quantifiable. They would be 
better able to operate cross-border, within the internal market, as a result of more transparent 
pricing information and the same information requirements across the EU. Better comparison 
and  clarity  will  also  favour  more  efficient  credit  institutions  and  are  expected  to  encourage 
competition not only on price but also in terms of service, to the benefit of consumers. 
This  section  focuses  on  the  preferred  package,  comprising  Options  2,  4B  and  8.  A  policy 
instrument  can  be  analysed  by  its  effectiveness  in  implementing  and  ensuring  compliance 
with  the  proposed  measures.  This  assessment  of  policy  options  is  primarily  based  on  these 
criteria.  
As  described  above,  previous  attempts  by  the  industry  to  provide  clarity,  comparability  and 
transparency  of  fee  information  through  EU-wide  self-regulation  has  been  unsuccessful  and 
raises concerns as to the appropriateness of future self-regulation in this area. 

Table 14: Impact on main stakeholders for options on ease of 
 comparison of bank fees and presentation requirements 

1. No action 
2. Standard price list 

Consumers 
and society 
0 

Financial services 
industry 
0 

(cid:57)(cid:57)(cid:57) 

(cid:57) 

3. Glossaries for bank fee terms in 
Member States 

3(A) non-harmonised terminology 
(cid:57) 
3(B) fully harmonised terminology   (cid:57) 

4. Comparison websites  

4(A) Single national website 

4(B) Accreditation scheme 

5. Representative examples 
5(A) set-up by banks 
5(B) prescribed by M. States  

6. cost simulation 

6(A) set-up by banks 
6(B) prescribed by M. States  
7. EU standardised forms for ex-ante 
information (price list) 

8. Banks obliged to provide ex-post 
information  

9. EU standardised forms for ex-post 
information on fees 

(cid:57) 

(cid:56) 
(cid:56)(cid:56) 

(cid:56) 

(cid:56)(cid:56) 
(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56)(cid:56) 
(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)/≈ 
(cid:57)/≈ 

(cid:57)/≈ 
(cid:57)/≈ 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57) 

Member States 

(cid:56)/≈ 

0 

(cid:57) 

(cid:56) 
(cid:56)(cid:56) 

(cid:56)(cid:56) 

(cid:56) 
(cid:56)(cid:56) 

(cid:56) 
(cid:56)(cid:56) 

(cid:56) 

(cid:57) 

(cid:56) 

Impact on effectiveness and efficiency compared to the situation today, 

(cid:57)(cid:57)(cid:57) (Strong) – (cid:57)(cid:57) (Moderate) – (cid:57) (Weak) positive contribution  
(cid:56)(cid:56)(cid:56) (Strong) – (cid:56)(cid:56) (Moderate) – (cid:56) (Weak) negative contribution – ≈ neutral contribution 

The  package  foresees  the  partial  standardisation  of  EU  fee  terminology  and  cross-border 
comparability  of  payment  accounts.  The  effectiveness  of  this  package  is  contingent  upon 
consistent application across Member States and therefore is more appropriately implemented 
through binding measures. In addition, higher levels of compliance can be achieved through 
binding measures due to monitoring and enforcement provisions. A certain level of flexibility 
would  be  beneficial  for  Member  States  in  implementing  the  package  to  allow  for  national 

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specificities. This accords with the wishes of stakeholders, who in response to the 2012 public 
consultation,  stated  that  there  is  a  need  for  a  balance  between  ease  of  comparison  and 
excessive  standardisation  affecting  differentiation,  qualitative  aspects  and  particularities  of 
national markets. 

7.6. 

Comparison  of  options  and  assessment  of  their  impact:  payment  account 
switching 

Table  15  assesses  the  effectiveness  and  efficiency  of  the  individual  policy  options  for 
switching.  These  are  not  necessarily  mutually  exclusive  and  may  be  combined  to  better 
address the problems outlined and achieve the set objectives. 

Table 15: effectiveness of the policy options for payment account switching 

Effectiveness in achieving the objectives  
Operational objectives 

Smooth and 
easy 
switching 
process with 
max duration 
of 14 days 

1. No action 
2. Ensure that the switching services 
follow the Common Principles (CP) 
3. Improve effectiveness of the CP 
3 (A) Improve existing CP 
3 (B) Broaden the scope of CP to 
EU-wide cross-border switching 
4. Set up an automatic redirection 
service for all receipts and payments 
from an old to a new account  
4 (A) Domestic automatic redirection 
service 
4 (B) EU-wide redirection service 
5. Payment account portability 
5 (A) Domestic payment account 
portability 
5 (B) EU payment account portability 

0 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

Number of 
misdirected/missed 
payments during 
switching process is 
reduced to less than 
5% of recurrent 
transactions  
0 

≈ 

≈ 

≈ 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

Consumers are 
assisted and 
informed of the 
switching process 
in an adequate 
manner 

Reduced  
direct 
financial 
costs of 
switching to 
consumers 

Increase the 
mobility of 
payment 
account users 

Efficiency (cost 
effectiveness) in 
achieving all 
listed objectives

0 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

0 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

0 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

0 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56)(cid:56) 

The 'no action' option (Option 1) would not address the problems identified in Section 3.2.3; 
nor  would  it  achieve  the  objectives  outlined  in  Section  4.  If  'no  action'  were  taken,  the 
different  level  of  consumer  protection  across  the  EU  –  arising  from  differing  application  of 
the Common Principles across the EU – is likely to be amplified. Even though the financial 
services industry argues that there is no need for new measures, consumer and civil  society 
representatives  have  voiced  clear  discontent  with  the  status  quo  and  consider  the  voluntary 
character  of  the  Common  Principles  to  be  a  major  reason  why  switching  services  remain 
inadequate.307  If no action is taken, switching will likely remain burdensome, unpredictable 
and costly to consumers, ultimately restricting their mobility. Option 1 is therefore rejected.  
Option 2  would  ensure  that  switching  services  follow  the  Common  Principles.  This  would 
have a positive effect on the ease of switching payment accounts and ensure that the switching 
process  does  not  last  for  more  than  14  days.  The  direct  cost  of  the  process  to  consumers 
would  also  fall  due  to  a  slight  increase  in  competitive  pressure.  Even  though  the  financial 
services  industry  argues  that  new  measures  ensuring  the  application  of  the  Common 
Principles  are  unnecessary,  consumer  representatives  strongly  oppose  this  view.  They  argue 
that while the Common Principles have been in place for three years, they are insufficient, as 

307  2012 Public consultation on bank accounts (see footnote 11), p.10-11. 

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demonstrated  by  the  results  of  national  surveys  and  mystery  shopping  exercises.308  In 
comparison to 'no action', this option would better meet the stated objectives, but it would not 
address all obstacles to switching. Accordingly, while this option amounts to a good first step, 
additional measures are explored and analysed below. 
Section 3.2.3 stated that the Common Principles briefly address some of the shortcomings of 
the  switching  process  encountered  during  mystery  shopping  exercises,  but  do  not  explicitly 
provide for solutions. Adding explicit provisions to address these deficiencies, as proposed in 
Option 3A,  would  help  define  providers'  obligations  clearly,  ensuring  a  minimum  level  of 
quality  in  switching  services  across  Member  States.  A  provision  that  all  account  providers 
should have information on switching services on their websites (displayed in an easy to find 
and  easy  to  understand  manner)  would  go  beyond  the  current  requirement  of  the  Common 
Principles  that  only  foresees  information  be  made  available  "on  a  durable  medium  and 
supplied by banks and national banking associations". At present, there are no explicit bank 
staff  training  requirements  regarding  the  switching  process.  Such  provisions  would  provide 
for a more streamlined approach by providers, improving assistance to consumers. As such, 
Option 3A (incorporating the application of the Common Principles as set out in Option 2) is 
considered more effective than Option 2 on its own.  
Option 3A would be flexible enough to take into account national specificities and thus ensure 
nationally effective switching. The new provision for staff training could specify that staff are 
to be adequately trained on the functioning of the switching service, leaving the possibility for 
Member States to decide how this is to be applied in practice.  
Disadvantages would remain: Option 3 would not eliminate a risk of an uneven playing field 
between providers wishing to enter new markets. Such an approach would be contrary to the 
internal  market.  Moreover,  this  option  would  not  help  develop  a  cross-border  switching 
service.  
In response to the 2012 Commission consultation on bank accounts309, representatives of the 
financial  services  industry  argued  that  there  is  low  demand  for  cross-border  switching  and 
therefore no need for cross-border switching provisions. It can be argued that demand is low 
because  there  are  difficulties  in  opening  payment  accounts  cross-border,  in  comparing 
products  from  different  Member  States,  and  as  there  is  no  dedicated  cross-border  switching 
service in place. Consumer representatives are strongly in favour of the development of cross-
border switching services; some noted that this option will become particularly relevant once 
the  Single  European  Payment  Area  is  fully  implemented.  Following  implementation, 
consumers  should  be  able  to  conduct  payment  transactions  from  anywhere.  Considering  the 
potential  benefits  from  cross-border  switching  to  consumers  in  particular  due  to  SEPA 
implementation, there is reason to expect that the potential cross-border demand for payment 
account services will increase and has the potential to grow in future.310 
By  standardising  certain  provisions  (e.g.  establishing  a  common  duration  for  the  switching 
procedure),  Option 3B  would  complement  Options  2  and  3A  and  help  create  a  cross-border 
switching  service  within  the  EU.  It  is  therefore  more  effective  than  Option 3A.  Yet  even 
though Options 2 and 3 facilitate switching, they do not fully address the problem of potential 
errors  occurring  when  in/out  payments  by  third  countries  are  credited/debited  to  the  wrong 
account, resulting in delayed/missed (recurrent) payments.  

308  Consumer Market Study on the consumers’ experiences with bank account switching with reference to the Common 

Principles on Bank Account Switching, GfK, January 2012, http://ec.europa.eu/consumers/rights/docs/ 
switching_bank_accounts_report_en.pdf. For further detail please refer also to Section 3.2.3 of this report. 

309  2012 Public consultation on bank accounts (see footnote 11), p. 14. 
310

  Please refer to the "Restricted cross-border switching" analysis of Section 3.2.3, p.38. 

EN 

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This issue is only addressed by Options 4 and 5. Option 4 proposes redirection of payments. 
Option 5 envisages the introduction of account number portability, so that an account number 
is kept when switching accounts. Consequently, payments credited/debited to an account will, 
by  default,  be  sent  to  the  correct/active  account.  Both  options  can  be  implemented  at  a 
domestic  (Variant A)  or  European  level  (Variant B).  The  introduction  of  either  of  these 
options at a national level would not facilitate cross-border mobility of consumers and would 
have fewer positive impacts for payment account providers than if implemented at a European 
level.  Furthermore,  the  implementation  of  these  options  only  domestically  could  be 
counterproductive  to  any  future  steps  at  the  European  level  to  further  standardise  switching 
services.  Significant  resources  would  be  deployed  nationally  to  create  infrastructure  that 
might then be costly to adapt to make it compatible with a pan-European system. Thus, the 
more effective options – as well as those with potentially the greatest benefit to stakeholders – 
would be European level implementation of these options.  
Even  though  both  options  would  to  a  great  extent  reduce  or  even  eliminate  misdirection  of 
payments,  account  number  portability  would  completely  eliminate  consumer  inconvenience 
arising  from  the  need  to  communicate  the  new  account  details  to  third  parties,  rendering 
switching  more  straightforward  for  consumers.  Therefore,  when  comparing  Options  4B  and 
5B, the introduction of account number portability (Option 5B) would be more effective.  
In terms of meeting the objectives, Option 5B would be the most effective long-term option. 
Due to its technical nature, this option could be implemented through either a self-regulatory 
initiative  or  a  legally  binding  approach  with  a  number  of  regulatory  technical  standards.  At 
present  there  are  no  laws  in  Member  States  that  could  prevail  over  any  self-regulatory 
agreement,  leaving  the  door  open  for  a  self-regulatory  approach.  However,  due  to  the  high 
one-off  costs  of  this  option  and  the  fact  that  the  significantly  less  costly  and  burdensome 
Common  Principles  were  not  sufficiently  applied  on  a  voluntary  basis,  a  legal  obligation 
might be necessary to achieve effective results. Table 16 assesses the impact of the individual 
policy options. 

Table 16: Options for payment account switching – Impact on main stakeholders 

Consumers and 
society 

Financial services 
industry 

Member  
States 

1. No action 
2. Ensure that the switching services follow the 
Common Principles 
3. Improve the effectiveness of the Common 
Principles 
3 (A) Improve the existing Common Principles 
3 (B) Broaden the scope of the Common 
Principles to EU-wide cross-border switching 
4. Set up an automatic redirection service for all 
receipts and payments from an old to a new 
account  
4 (A) Introduce a domestic automatic redirection 
service 
4 (B) Introduce an EU-wide redirection service 
5. Introduce payment account portability 
5 (A) Domestic payment account portability 
5 (B) EU payment account portability 

0 

(cid:57) 

(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 

(cid:57)(cid:57)(cid:57) 
(cid:57)(cid:57)(cid:57) 

0 

(cid:56) 

(cid:56) 

(cid:56) 

(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56) 

(cid:56)(cid:56)(cid:56) 
(cid:56)(cid:56) 

0 

(cid:56) 

(cid:56) 

(cid:56) 

(cid:56)(cid:56)(cid:56) 

(cid:56)(cid:56) 

(cid:56)(cid:56)(cid:56) 
(cid:56)(cid:56) 

Non-financial 
service product 
providers 
0 

≈ 

≈ 

(cid:57) 

(cid:57) 

(cid:57)(cid:57) 

(cid:57) 
(cid:57)(cid:57) 

Table 17 provides an overview of the estimated the costs and benefits of the assessed policy 
options where the Commission was able to provide an estimate (even if a broad one). Some 
types  of  costs/benefits  have  not  been  quantified  or  are  not  quantifiable.  A  more  detailed 
description of the methodology used and assumptions made is provided in the methodological 
annex (Annex VI). 

Table 17: Options for payment account switching - Comparison of costs and benefits 

EN 

83 

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Total EU benefits 
(million EUR) 
Consumer 
benefits: 
Changes in 
switching behaviour 
Reduction 
direct/indirect costs 
Credit institution 
benefits: 
Cross-border cost 
savings 
Business 
opportunities 
Total EU costs 
(million EUR) 
Credit institution 
costs: 
one-off 

recurring 

Member State 
costs: 
one-off 

recurring 

Option 1 

Option 2 

Option 3A 

Option 3B 

Option 4A 

Option 4B 

Option 5A 

Option 5B 

0 

0 

0 

0 

1 462 

1 680 

3 655 

Marginal 

Marginal 

Marginal 

5 849 

1 284 

6 580 

1 427 

8 773 

1 284 

9 504 

1 427 

Not 
quantifiable 

Not 
quantifiable 

Not 
quantifiable 

Not 
quantifiable 

Not 
quantifiable 

Not 
quantifiable 

Not 
quantifiable 

Option 1 

Option 2 

Option 3A 

Option 3B 

Option 4A 

Option 4B 

Option 5A 

Option 5B 

0 

0 

0 

0 

17-33 

37 - 73 

67 - 129 

229-396 

853 -1 214 

2 041-2 649 

500-22 734 
Not 
quantified 

500-22 734 
Not 
quantified 

14 700 
Not 
quantified 

14 700 
Not 
quantified 

3 

19 

3 

19 

3 

19 

3 

19 

3 

19 

3 

19 

3 

19 

Option 5B (EU-wide payment account portability) is the most effective, and if implemented 
via a legal instrument, is likely to produce greatest benefit to consumers and wider society in 
terms  of  cost  efficiency.  It  would,  however,  also  impose  significant  initial  costs  on 
stakeholders,  as  it  would  necessitate  either  a  renumbering  of  all  account  numbers  or  the 
introduction of a comprehensive database linking  each  account  number  to  a  virtual  portable 
number. Consequently, one-off changes would need to be made not only to payment account 
provider  infrastructure,  but  potentially  also  to  other  payment  infrastructures  linked  to  it. 
However, once the initial renumbering was completed, consumer switching would no longer 
be  an  issue  and  long-term  consumer  mobility  within  the  retail  financial  sector  would  be 
facilitated. Moreover, any subsequent switches would not cause third parties to incur costs in 
as  their  customer  records  would  not  need  to  be  updated.  Given  that  the  use  of  direct 
debits/credits is growing all over Europe, Option 5B is the best long-term option. Its benefits 
would  need  to  be  weighed  up  carefully  against  the  technical  issues  behind  modifications  to 
payment  infrastructures.  For  the  time  being,  however,  an  immediate  implementation  of  this 
option seems disproportionate to the identified problems.  
Option  4B  introducing  the  EU-wide  redirection  service,  which  would  be  the  next  most 
effective  option,  would  be  potentially  less  efficient  and  proportionate  that  Option  5B.  Not 
only are its estimated benefits lower – mainly due to the fact that it does not achieve the same 
level  of  consumer  mobility,  it  may  lead  to  even  higher  overall  costs  to  industry.  For  both 
options,  in  order  to  correctly  assess  all  potential  implications  of  these  complex  measures, 
further research should be undertaken, analysing the opportunities and risks related to them. A 
mandate could be given to the EBA to engage in further analysis with a view to it elaborating 
a  technically  feasible  and  efficient  way  to  introduce  this  policy  within  the  next  three  years. 
This  would  nevertheless  meet  consumer  demands  for  the  Commission  to  conduct  a  deeper 
analysis before reaching any decision.311 
As  for  the  domestic  variants  of  portability  and  redirection  services,  an  analogous  analysis 
applies. It leads to the conclusion that the next most effective option is Option 3B, as it aims 
to  ensure  the  cross-border  application  of  the  Common  Principles,  by  specifying  explicit 
provisions making their application more consistent and consumer-friendly. If implemented, 

311

  2012 Public consultation on bank accounts (see footnote 11), BEUC response, p.18.  

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84 

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they  are  outweighed  by 

consumers would be better informed and better assisted by staff with regard to the switching 
process, in time gaining the confidence to ask a 'new' bank to provide them with a switching 
service.  This  increased  confidence  could  encourage  consumers  to  shop  around  for  a  better 
product  to  meet  their  needs.  Consumers  would  also  find  it  easier  to  switch  provider  cross-
border.  
Payment account providers will incur one-off costs in adapting their IT systems and business 
processes  to  comply  with  Common  Principles,  in  complying  with  the  new  cross-border 
dimension  of  the  switching  service,  and  in  monitoring  internal  compliance.  They  will  incur 
costs  in  acquiring  an  understanding  of  the  new  provisions,  in  training  staff  on  switching 
process,  and  in  updating  website/branch  information  to  include  information  on  switching. 
Overall  these  one-off  costs  are  estimated  at  between  EUR 67-129 million.  Providers  would 
incur recurrent costs relating to running the switching service and to monitoring and reporting 
on  compliance.  Calculated  on  a  10-year  basis,  these  recurrent  costs  would  be  EUR 2 041-
2 649 million.  
Even  though  the  overall  costs  of  this  option  are  substantial  and  are  likely  passed  on  to 
consumers, 
the  benefits.  The  benefits  are  estimated  at 
EUR 3 655 million  and  are  calculated  as  the  potential  cumulative  cost  savings  by  those 
consumers  who  actually  decided  to  switch.  These  benefits  do  not  include  the  potential 
benefits to wider society. These benefits will take the form of savings for consumers who do 
not  switch,  since  they  will  also  benefit  from  a  more  competitive  environment.  Furthermore, 
payment account providers will benefit from potential economies of scale realised within their 
cross-border  operations.  They  would  also  benefit  from  increased  consumer  mobility  and  a 
more level-playing field if they wish to expand their client base and/or enter new markets. 
Option  3B  is  likely  to  benefit  consumers  more  than  it  will  negatively  impact  upon  other 
stakeholders.  By  significantly  improving  the  functioning  of  the  Common  Principles, 
improving  these  in  areas  that  have  been  identified  as  problematic312  and  broadening  their 
scope  to  cross-border  switching,  customer  and  provider  mobility  would  increase,  and 
competitive within retail financial markets would be significant enhanced. Its implementation 
would represent an efficient step towards better-functioning switching services across the EU 
and  would  lead  to  a  better  integrated,  functioning  internal  retail  banking  market  that  would 
allow for more growth in the European economy.313 
The  effectiveness,  impact,  costs  and  benefits  of  this  option  will  depend  on  the  policy 
instrument via which it is implemented. If a self-regulatory approach is chosen, all effects and 
impacts  are  likely  to  be  significantly  lower:  there  is  a  risk  that  the  measures  will  not  be 
implemented  or,  once  implemented,  not  sufficiently  applied  in  practice  due  to  a  lack  of 
enforcement.  As  with  the  self-regulatory  Common  Principles  (in  place  for  three  years),314  a 
self-regulatory  approach  would  not  guarantee  satisfactory  application;  therefore  a  legally 
binding  approach  is  preferable  in  meeting  the  defined  objectives.  This  conclusion  was  also 
drawn  in  Australia,  where  a  voluntary  switching  code  was  recently  made  obligatory  within 
broader banking reform.315  

312

  For detailed problem analysis please refer to Section 3.2.3 of this report. 

313

  The  detailed  description  of  methodology  of  the  calculation  of  the  potential  costs  and  benefits  including  related 

assumptions are presented in Annex VI. 

314  See Section 3.2.3 for further details. 
315  Account Switching, Australian Government, July 2012, 

http://www.bankingreforms.gov.au/content/Content.aspx?doc=switching.htm; 12-139MR ASIC implements new bank 
account switching rules, June 2012, http://www.asic.gov.au/asic/asic.nsf/byHeadline/12-
139MR%20ASIC%20implements%20new%20bank%20account%20switching%20rules?opendocument  

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Due to the generally principle-based wording of the Common Principles, on which this option 
is  based  upon,  even  a  binding  instrument  could  leave  Member  States  with  considerable 
flexibility in implementing this option. Member States could define for example the extent of 
necessary staff training, the layout of information on the switching service, the exact content 
of  the  information  that  needs  to  be  submitted  from  the  'old'  bank  to  the  'new'  one,  and  its 
format.  A  more  standardised  approach  across  the  Member  States  would  be  necessary  for 
certain provisions (such as maximum length of the switching procedure) relevant in particular, 
to the functioning of the cross-border switching service.  
As  this  option  would  introduce  provisions  facilitating  cross-border  switching,  many 
stakeholders in all Member States would be affected.  
The extent of the impact would be dependent on how far the Common Principles are already 
applied in practice. Furthermore, the cost of implementing this option is directly linked to the 
number  of  credit  institutions  which  need  to  apply  its  provisions.  Consequently,  other  things 
being  equal,  Member  States  with  a  higher  number  of  credit  institutions  would  be  likely 
impacted  more  in  total  terms  than  those  with  fewer  ones.316  On  this  basis,  it  has  been 
assessed317  that  the  Member  States  affected  most  would  be  Bulgaria,  Germany,  Finland, 
Luxemburg,  Poland,  Portugal,  and  the  United  Kingdom.  Denmark,  Estonia,  Malta  and  the 
Netherlands  would  be  affected  to  a  relatively  small  extent  whereas  the  remaining  Member 
States would be affected to a medium extent. 

8. 

THE PREFERRED POLICY OPTION AND ITS IMPACT 

The previous chapter presented the analysis of the policy options' likely impact for the three 
areas  this  report  covers.  It  considered  the  policy  options  for  access,  transparency/ 
comparability  and switching  separately, determining the sets of preferred options in each of 
the areas. In this chapter we analyse different combinations of options for all the three areas 
together as a 'package'. 
As illustrated in Chapter 3, the rationale for selecting a 'package' is strictly and fundamentally 
linked to the general objectives. Only a combination of actions in these areas can establish the 
right  to  a  basic  payment  account  to  EU  citizens,  provide  common  standards  to  ensure 
transparent  and  comparable  bank  account  fees  and  make  (cross-border)  switching  of  bank 
accounts easier. This package would enhance the functioning of the internal market, ensure a 
high degree of equivalent consumer protection to all EU citizens and foster economic growth 
alongside greater financial inclusion. 
As  presented  in  Section 3.3,  the  stated  objectives  (see  Chapter  4)  are  strongly  interlinked. 
Improved access would contribute to the development of a single market for every EU citizen. 
Transparency  and  comparability  of  fees  are  necessary  to  support  improved  access,  but  they 
also  facilitate  demand  for  account  switching.  A  properly  functioning  switching  service  will 
enable citizens to reap the benefits of broader access and better fee information. Combined, 

316

317

  For further detail please refer to Table 22, in Section 8.2.2  

  Data for AT, BE, BG, DE, DK, ES, FI, FR, IT, LT, LU, LV, NL, PL, PT, UK is derived 
from  the  study;  Quantification  of  the  economic  impacts  of  EU  action  to  improve  fee 
transparency,  comparability  and  mobility  in  the  Internal  Market  for  personal  current 
accounts",  ICF  GHK,  2012;  for  the  other  MS  the  category  of  impact  was  assessed  by 
Commission staff. 

EN 

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these objectives can enhance competition and lower the barriers to cross-border demand. Yet 
no single policy option is able to meet them all.  
A package that omits even one of these elements may risk creating a single market that is not 
accessible to all EU citizens, entrenching market fragmentation, endangering competition, and 
restricting efficiency gains. Action at EU level to facilitate cross-border switching of payment 
accounts without accompanying measures to enhance transparency/comparability or establish 
the right to access in the Member States would be inefficient. Accordingly, there is a need for 
a combined approach to the problems identified in this Impact Assessment. 
The  preferred  approach,  combining  the  optimal  solutions  that  emerged  from  the  analysis  of 
three areas covered, will constitute one of the key actions to re-launch the Single Market. It 
will  strengthen  cohesion  and  consumer  confidence,  ensuring  inclusive  growth  and  offering 
opportunities based on fair, robust and equitable rules for citizens and businesses.318  

8.1. 

Comparison of different sets ("packages") of policy options 

The  table  below  presents  distinct  packages  of  policy  options,  which  do  not  comprise  all 
possible combinations of individual options. In particular none of the packages is composed 
exclusively  of  options  that  were  discarded  in  the  individual  analysis.  The  set  of  packages 
presented  below  was  determined  by  grouping  options  that  reflect  different  degrees  of  EU 
intervention. The first represents the 'no action' scenario; Package 2 focuses on action solely 
targeting  regulation  in  Member  States'  domestic  markets;  Package  3  brings  together  the 
combination  of  preferred  options  identified  in  each  of  the  three  areas  when  analysed  on  an 
individual basis; and Package 4 combines options that would result in the greatest degree of 
EU harmonisation.  

Table 18: Packages of policy options addressing access, fee transparency and switching 

1.  No action options 
(No further action is taken 
at EU level.) 

=>  Encourage  Member  States 

to 

implement 

the  Recommendation; 

Commission would continue to monitor implementation; 

=>  No  EU 

intervention  on  presentation  requirements  and  enhanced 

comparability of bank fees; 

Package 2 

Package 3 

Package 4 

=>  EBIC  Common  Principles  will  continue  to  apply;  (possible)  voluntary 

initiatives to improve functioning and/or quality. 

=>  Binding measure ensuring the right of access to a basic payment account 

for national residents only (Option 3B); 

=>  Binding measure ensuring common quality requirements for transparency 
and  comparability  of  bank  account  fees  and  comparison  web-tools 
(Options 2, 4B and 8); and 

=>  Binding  measure  ensuring  that  switching  services  follow  the  Common 

Principles (Option 2). 

=>  Binding measure ensuring the right of access to a basic payment account 

for both residents and non-residents (Options 2, 4A and 4D); 

=>  Binding measure ensuring common quality requirements for transparency 
and  comparability  of  bank  account  fees  and  comparison  web-tools 
(Options 2, 4B and 8); and 

=>  Binding  measure  ensuring  quality  principles  for  payment  account 

switching, including cross-border (Option 3B). 

=>  Binding measure ensuring the right of access to a basic payment account 

for both residents and non-residents (Options 2, 4A and 4D); 

=>  Binding measure introducing EU standardised forms for the provision of 

ex ante and ex post information on fees (Options 7 and 9); and 

=>  Binding  measure  setting  up  an  automatic  redirection  service  or  EU 

318  "Single Market Act II, Together for new growth", COM(2012) 573, key action 12. 

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87 

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payment account portability (Options 4B and 5B). 

The  'no  action'  scenario  was  discarded  in  the  analysis  of  each  area  (see  chapter  7).  As  a 
result no further assessment is made in this section.  
Package 2 would foresee a combination of options including the establishment of a right of 
access  to  a  basic  payment  account  limited  to  national  residents  (3B  on  "Access")  and  the 
proposal  to  render  the  Common  Principles  legally  binding,  retaining  their  current  focus  on 
domestic markets (2 on "Switching"). While this package may result in improved compliance 
with  the  recommendation  on  access  and  the  provisions  of  the  Common  Principles,  it  omits 
cross  border  provisions  in  the  areas  of  access  and  switching.  This  would  not  tackle  the 
problems  identified  in  this  report  and  would  be  contrary  to  the  stated  objectives  of  this 
initiative.  The  full  potential  of  the  single  market  would  not  be  unlocked.  In  addition,  the 
combination  of  options  would  not  be  consistent  with  each  other,  given  that  the  options  for 
bank fee comparison and presentation requirements do have a cross border element. Package 
3  contains  the  policy  options  identified  in  each  area  as  the  most  effective  and  efficient 
approach in addressing the problems analysed in this report (see Sections 7.4, 7.5 and 7.6). On 
a cumulative basis the three sets of options are complementary and do not result in diverging 
impacts. This package does not suffer from the  weaknesses of  Package  2,  since  it  enhances 
the internal market, while allowing specificities in domestic EU markets.  
Compared  with  Package  3,  Package  4  proposes  a  higher  level  of  EU  harmonisation  in  the 
areas  of  bank  fee  comparison  and  switching,  proposing  full  EU  harmonisation  of  bank  fee 
terminology and an EU-wide bank account portability or an EU-wide redirection service. In 
this case, the EU approach would be disproportionate to the problems identified and difficult 
to implement in practice. 
As a result Package 3 represents the sets of preferred policy options, as outlined in the table 
below,  to  tackle  the  problems  identified  in  this  report.  These  options  do  not  overlap,  but 
would be complementary, creating the synergies described below. The binding nature of the 
proposed instruments would nevertheless permit flexibility to take account of the differences 
in  retail  financial  markets  and  would  allow  for  monitoring  across  the  Member  States.  The 
replies  to  the  public  consultation  have  favoured  a  balanced  approach  to  addressing  the 
problems  identified.  Most  notably,  all  categories  of  stakeholders  have  underlined  that  a 
gradual approach would be more effective to achieving European harmonisation. 

(1)  Access 

Table 19: The preferred package of policy options 

-  Ensure application of the provisions of the Recommendation; 
-  Improve  the  features  of  payment  accounts,  by  enlarging  the  list  of  basic  payment 
services  to  include  internet  banking  and  online  purchasing  and  by  ensuring  that  the 
features of the payment account are not of a discriminatory nature; and 

(2)  Presentation and ease of comparison of bank fees 

-  A  standard  price  list  to  be  provided  as  part  of  account  opening  procedures,  by 
identifying  at  EU  level  and  supplementing  nationally  fees  common  to  all  Member 
States in order to cover the 20 most representative fees or at least 80% of key charges 
incurred; 

-  Introduce the requirement to set up independent fee comparison websites at Member 

State level, which should fulfil specific quality requirements; 

-  Introduce  an  obligation  to  provide  consumers  with  ex-post  information  on  fees 
incurred.  The  ex-post  information  would  cover  the  same  fee  items  as  the  ex-ante 
information; and 

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(3)  Switching 

-  Improve  the  effectiveness  of  the  Common  Principles  and  Broaden  the  scope  of  the 

Common Principles to EU-wide cross-border switching. 

8.2. 

Cumulative impacts and impacts on stakeholders 

Different methodologies were used for the analysis of the different areas. The use of different 
methodologies enabled the analysis to focus more closely on the relevant issues in each of the 
three areas and permitted the interpretation of the data in a rigorous manner. The consequence 
of this approach is that it is more difficult to aggregate the impacts of the individual options 
and thus calculate the costs and benefits for the package. Yet a fully integrated assessment of 
costs  and  benefits  would  have  deprived  the  analysis  of  necessary  detail,  particularly  with 
regard to how the options impact on stakeholders.  
Although it is not possible to fully integrate the analysis of costs and benefits, some degree of 
integration was possible. For example, a large number of cost items are common to more than 
one option. Synergies in terms of time or resources for stakeholders may result where all three 
options  are  introduced  simultaneously,  particularly  with  transparency/comparability  and 
switching taken together. Several types of cost generated by the preferred package for credit 
institutions and Member States are expected to be less onerous on a cumulative basis than the 
aggregate  amounts  estimated  for  each  option,  (e.g.  updating  of  IT  systems  and  cumulative 
recurring costs of additional compliance staff).  
Benefits are more clearly interlinked. There is limited benefit to better fee information (e.g. in 
terms  of  enhanced  competition),  unless  it  leads  to  switching,  which  requires  efficient 
switching mechanisms. Switching cross-border can only be effective if EU citizens' rights of 
access to a basic payment accounts are guaranteed. 
The  methodology  used  to  assess  the  efficiency  of  the  options  considers  both  quantified  and 
non-quantified  costs  and  benefits  to  stakeholders,  as  described  in  the  ensuing  section. 
Moreover, as regards access, a prudent estimation of costs and benefits has been maintained. 
While  the  size  of  the  problem  of  access  to  a  basic  payment  account  is  larger  than  was 
estimated in the previous Impact Assessment,319 the assumed scenarios (pessimistic, realistic, 
optimistic) remain at the levels of the previous assessment. 
The  tables  below  provide  a  disaggregated  overview  of  costs  and  benefits  for  the  preferred 
approaches in the three areas.  

Table 20: Access to a basic payment account 

Total EU benefits 
(million EUR/year) 
Consumer: 
One off benefits 
Recurring annual benefits 
Payments services provider: 
Recurring annual benefits 
Member State: 
One off benefits 
Recurring annual benefits 
Enterprises 
Recurring annual benefits 

Option 2 

Option 4A 

Option 4D 

542-2711 

542-2711 
18-89 
18-89 
18-89 

18-89 
32-160 
32-160 

236-1179 
Non quantifiable 
236-1179 
2-11 
2-11 
2-11 
Non quantifiable 
2-11 
16-80 
16-80 

68-339 

68-339 
-1.8 to -9 
-1.8 to -9 
2-11 

2-11 
4-20 
4-20 

Total EU costs  
(million EUR/year) 
Consumer: 
One off costs 
Recurring annual costs 
Payments services provider: 
One off costs 
Recurring annual costs 
Member State: 
One off costs  
Recurring annual costs 
Enterprise: 

Option 2 

Option 4A 

Option 4D 

108-542 
0 
108-542 
71-356 
Not  
71-356 
3.02 
1.13 
1.89 
0 

22-108 
0 
22-108 
15-74 
0 
15-74 
0 
0 
0 
0 

22-108 
0 
22-108 
19-94 
0 
19-94 
0.38 
0.14 
0.24 
0 

319  SEC(2011)906. 

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Table 21:  Ease of comparison of bank fees and requirements covering presentation and payment account switching 

Total EU benefits 
(million EUR 2013-2022) 
Consumer benefits:   
Change switching behaviour 
Better account management 
Credit institution: 
Cross-border cost savings 
Business opportunities 
Total EU costs  
(million EUR 2013-2022) 

Credit institution: 
one-off 
recurring 

Member State: 
one-off 
recurring 

Option 2 

Option 4B 

Option 8 

584.87 

731.08 

1 462.16 
2 702.57 

Not 
quantifiable 

Not 
quantifiable 

Not  
quantifiable 

95.95-163.03 
183.17-245.40 

0.32-0.65 
4.77-9.53 

192.42-326.31 
260.37-492.45 

0.05-0.08 
0.06-1.17 

0.36-0.66 
3.48-6.74 

0.07-0.11 
0.81-1.59 

8.2.1. 

Impacts on stakeholders 

Total EU benefits 
(million EUR 2013 -2022) 
Consumer: 
Change switching behaviour 
Reduction direct/indirect costs 
Credit institution: 
Cross-border cost savings 
Business opportunities 
Total EU costs 
(million EUR 2013-2022) 

Credit institution: 
one-off 
recurring 

Member State: 
one-off 
recurring 

Option 3B 

3 655.4 
Marginal 

Not  
quantifiable 

67 – 129 
2 041 – 2 649 

3 
19 

The preferred package should improve consumer welfare in the EU. 
The measures on access (ensuring access to a basic payment account and to all basic payment 
means for both resident and non-resident consumers) would reduce the number of unbanked 
citizens. Consumers would benefit from improved access to different methods of payment that 
reduce  transaction  costs  and  open  the  internal  market  (providing  the  possibility  of  making 
purchases  online  and  using  internet  banking  services).  They  would  be  able  to  access  their 
funds more quickly, regardless of their geographic location; experience an increased level of 
security through lower levels of cash transactions; an increased choice of goods and services 
where  electronic  payments  are  obligatory;  the  possibility  to  access  employment  and 
accommodation more easily, and a reduced sense of financial, economic and social exclusion. 
Those  willing  to  identify  the  most  appropriate  product  would  be  able  to  obtain  clear  and 
comprehensible information from any EU payment account provider, helping them compare 
and evaluate offers. If they chose to move accounts, domestically or cross-border, they would 
have  a  switching  service  their  disposal.  The  framework  to  ensure  clear  and  comparable  fee 
information,  together  with  a  pan-European  switching  service,  would  create  an  efficient  and 
competitive internal market for payment accounts. This would lead to a general reduction in 
prices, meaning that consumers could access the best product for them at the best price.  
A  strong  positive  effect  on  consumer  confidence  would  underpin  demand  for  payment 
accounts  and  encourage  consumer  mobility  both  at  national  and  cross-border  level.  These 
lasting effects cannot be quantified due to the difficulty of modelling consumer behaviour. 
At  present,  recurring  costs  for  consumers  usually  consist  of  account  management  fees  and 
charges  for  misuse  of  account  facilities.  In  light  of  this  initiative,  which  would  introduce 
enhanced  transparency  and  comparability  and  a  facilitated  switching  process,  consumers 
should understand the charges that exist for different services and choose products that better 
fit their needs. 
The  expected  effects  of  competition  would  include  cost  efficiencies  for  credit  institutions 
(since they could implement the same IT systems, processes, staff training procedures etc. in 
all Member States within which they operate, resulting in economies of scale), easier market 
entry  for  foreign  providers,  and  greater  potential  for  market  expansion  of  competitive 

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providers.  Non-quantifiable  benefits  for  credit  institutions  would  include:  an  increased 
customer base to which to market other products (e.g. home insurance); the reduced cost of 
and  risks  from  cash  based  payments;  and  the  benefits  from  a  contribution  to  capital  and 
funding. 
The preferred package would, however, impose costs upon credit institutions. Unique one-off 
cost  items,  where  no  change  is  expected  when  options  are  assessed  on  a  cumulative  basis, 
include costs incurred in filtering fee information and aggregating summary fee information 
for the purposes of developing ex-post summaries of bank charges, and the cost of developing 
standard fee lists. One-off costs may also arise due to lost revenue where consumers switch to 
another  provider.  However,  a  large  number  of  cost  items  are  common  to  more  than  one 
option: these include costs of updating IT applications, internal communication and training 
costs, and compliance costs for legal departments.  
Providers are projected to incur more costs – or at least quantifiable costs – than benefits, in 
the short term. These costs would be limited by several factors. First, some of the preferred 
options have already been implemented in several Member States. For many banks, efforts to 
adapt to the new framework would be limited; moreover, France, Belgium and Italy already 
comply  with  the  basic  provisions  of  the  Recommendation  on  access  to  basic  payment 
accounts.  Second,  substantial  synergies  are  expected  between  the  different  options.  Each 
option’s  estimated  costs  include  training  expenditure,  but  in  practice  this  training  can  be 
combined into one session. Third, banks would be able to cover their costs by adjusting prices 
of payment accounts. Competition, promoted by transparency and switching, could keep this 
adjustment  to  a  minimum;  it  would  also  open  market  perspectives  to  credit  institutions 
throughout  the  Internal  Market.  Fourth,  the  more  accounts  opened  over  time,  the  lower  the 
incremental costs of access, switching and transparency. 
Member  States  and  society  as  a  whole  would  benefit  from  lower  costs  for  social  security 
payments or less fraud related to benefit and tax (potentially implying lower taxes, e.g. less 
costly  local  tax  collection).  More  generally,  promoting  competitive  banking  markets  would 
improve  the  efficiency  of  the  single  market,  which,  at  a  time  of  economic  crisis,  would  be 
particularly  valuable.  These  benefits  would  reinforce  each  other  improving  and  stimulating 
consumer and business confidence thus stimulating growth. 
Member States would incur costs of (potentially) legislating or implementing the elements of 
the new framework (e.g. managing the accreditation process for comparison websites would 
cost  from  EUR  3.8  -  7.4  million  from  2013  to  2022).  These  only  need  to  be  accounted  for 
once  (for  the  one-off  costs).  The  recurring  costs  of  supervising  and  monitoring  would, 
however, be cumulative: more people would be required to supervise various different aspects 
of the package. That being said, some synergies are likely.  
EU budget 
This proposal has no implication for the budget of the EU or those of EU agencies.. 
EU businesses 
This package would benefit EU businesses significantly. They are unlikely to incur any costs 
but  could  benefit  substantially  from  improved  access  to  payment  accounts.  The  preferred 
options  would  create  the  conditions  for  a  bigger  market  for  their  goods  and  services. 
Moreover, non-discriminatory instruments and online facilities in relation to payment account 
services would trigger a potential increase in cross-border trade. 

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8.2.2.  Geographical impacts 

The  impacts  of  the  preferred  package  would  be  spread  across  the  territory  of  the  EU.  The 
extent of these impacts would depend on the actions required. Table 22 provides a summary 
of the expected impact of each preferred option on Member States.  
Concerning fee transparency and switching, this assessment is based on a comparison of the 
current regulatory and market conditions in Member States. Each preferred option is assessed 
by  itself:  the  impact  on  Member  States  does  not  consider  the  relative  weight  of  any  option 
relative to another. For example, while the impact of introducing an accreditation system for 
comparison  websites  represents  the  lowest  value  within  the  package  of  preferred  options  in 
terms of quantified costs to Member States, its impact is expected to be high in Luxembourg 
where no comparison websites are currently in operation.   
In terms of access to basic payment accounts, the assessment  of the  geographical impact of 
option 2 depends on whether Member States have already introduced a framework on access 
and to what extent it complies with the Recommendation on access. It can be assumed that 
three Member States which already comply with the Recommendation (FR, BE, IT) will not 
be  impacted  upon  by  the  measures  introduced  under  Option  2.  The  greatest  impact  will  be 
observed  in  the  Member  States  which  have  not  adopted  any  measures  on  access  at  all  (AT, 
BG, CZ CY, GR, LV, MT, PL, RO, SK, SL, and ES), and a slightly smaller impact in those 
countries where an industry charter or self-regulatory rules exist (DE, HU, IE, PT, NL, UK). 
The Member States which have already introduced legislation on access – although it does not 
fully comply with the Recommendation (DK, FI, LU, EE, LT, SE) – will experience a smaller 
impact,  since  they  will  only  need  to  adapt  existing  rules  to  the  provisions  of  the 
Recommendation. 
Since  the  account  features  provided  under  Options  4A  and  4D  do  not  exist  in  any  Member 
State access  framework, it is assumed that all the  Member  States  will  be  impacted  upon  by 
these features to the same, substantial, extent. 

Policy options 

Impact on Member States 

Table 22: Assessment of the impact of the preferred package on Member States 

Large 

Medium 

Small 

No Impact 

Access 
Option 2: Ensure application of 
the provisions of the 
Recommendation 
Option 4A: Enlarge the list of 
basic services to include 
internet banking and online 
purchasing 

AT, BG, CZ CY, GR, LV, MT, 
PL, RO, SK, SL, ES 

DE, HU, IE, PT, NL, 
UK 

DK, FI, LU, EE, LT, 
SE 

FR, BE, IT 

AT, BG, CZ CY, GR, LV, MT, 
PL, RO, SK, SL, ES, DE, HU, 
IE, PT, NL, UK, DK, FI, LU, 
EE, LT, SE, FR, BE, IT 

Option 4D: Ensure that the 
features of the payment account 
are not of a discriminatory 
nature. 

AT, BG, CZ CY, GR, LV, MT, 
PL, RO, SK, SL, ES, DE, HU, 
IE, PT, NL, UK, DK, FI, LU, 
EE, LT, SE, FR, BE, IT 

Ease of comparison of fees and requirements covering presentation
Option 2: Standard price list for 
20 or most representative fees 

EE, UK 

Option: 4B: Comparison web-
site with accreditation scheme 

LU 

320

AT, BG, CZ, FI, IE,  
LU, LV, MT, NL, PL, 
RO, SE, SI, SK, 
EE, FI, FR, HU, PT, SI 

Option: 8: Ex-post information 

BG, CY, CZ, EE, HU, 

BE, CY, DE, DK, EL, 
ES, FR, HU, IT, LT, 
PT 
AT, BE, BG, CY, CZ, 
DE, DK, EL, ES, HU, 
IE, IT, LV, MT, NL, 
PL, RO, SE, SK, UK 
AT, BE, DE, DK, 

320  Data for AT, BE, BG, DE, DK, ES, FI, FR, IT, LT, LU, LV, NL, PL, PT, UK is derived from the study "'Quantification 
of the economic impacts of EU action to improve fee transparency, comparability and mobility in the internal market for 
bank personal current accounts' by ICF GHK, 2012; for the other MS the category of impact was assessed by 
Commission staff. 

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provided by banks 

Switching3200 
Option 3B: Broaden the scope 
of the Common Principles to 
EU-wide cross-border 
switching 

IE, IT, LT, LU, LV, 
MT,  NL, PL, PT, RO, 
SE, SI, SK  

EL,ES, FI, FR, UK 

BG, DE , EL, FI, LU, PL, 
PT,RO, UK 

AT, BE, CY,  ES, FR, 
IT, LT, LV, MT, SK, 
SL 

CZ, DK, HU, IE, EE, 
NL, SE 

8.2.3. 

Social impacts 

Society as a whole should benefit from economic development and growth since "people with 
access  to  savings  accounts  or  simple  informal  savings  technologies  are  more  likely  to 
increase productivity and income."321 Facilitating access to and use of banking services in a 
universal and habitual manner in the near future would also ensure further economic growth, 
particularly  in  less  developed  EU  countries  where  the  retail  banking  sector  must  advance. 
Discounts  from  reduced  use  of  cash  and  cheques  together  with  an  increase  in  electronic 
payments  and  online  purchases  would  benefit  public  administrations,  the  private  sector  and 
consumers.322 Other positive impacts may include less fraud and tax avoidance since payment 
transactions would increasingly take place through electronic (and traceable) channels. 
Access and efficient use of basic payment accounts is a key enabling service contributing to 
the  overall  success  of  the  EU  active  inclusion  strategy.  In  this  context,  access  to  basic 
payment  accounts  would  enable  the  most  disadvantaged  to  better  use  services  that  are 
provided through the banking system (such as receipt of social assistance, purchase of certain 
goods, etc.), as indicated in the European platform against poverty and social exclusion, the 
Europe 2020 flagship initiative for inclusive growth. 

8.2.4.  Administrative burden 

Administrative  costs  are  the  costs  incurred  by  enterprises,  public  authorities  and  citizens  in 
meeting legal obligations to provide information on their activities either to public authorities 
or  to  private  parties.  They  are  different  from  costs  stemming  from  the  substantive 
requirements  of  the  legislation,  i.e.  those  setting,  for  instance,  social  and  environmental 
standards requiring changes in products or processes. 
No  obligations  are  imposed  upon  citizens  in  terms  of  reporting  or  providing  information  to 
other  parties.  The  preferred  access  options  do  not  include  any  provisions  relating  to  the 
provision  of  information;  rather,  by  ensuring  that  consumers  have  a  right  to  a  payment 
account as set out in the Recommendation, it should actually reduce the administrative burden 
placed  on  consumers  who  would  no  longer  need  to  provide  as  much  documentation  and 
evidence to open an account.  
For  credit  institutions,  the  main  administrative  burden  would  arise  from  an  obligation  to 
provide  information  to  both  consumers  (particularly  potential  customers)  and  authorities 
(particularly  supervisory  authorities  in  the  context  of  legal  compliance).  An  impact 
assessment  accompanying  the  Recommendation  on  access  to  basic  payment  accounts 
previously  estimated  the  administrative  burden  for  providers  at  between  EUR  0.34-0.66 
million  in  one-off  costs  (including  the  preparation  of  information  materials)  and  recurring 
costs  of  EUR  6.4-12.8  million  (including  providing  consumers  with  information  and 
providing authorities with information on practices). 

321  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 5. 
322  Strategy for Financial Inclusion, Final Report, 2011, p. 14 

http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf  

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The administrative burden on the financial services industry may be reduced in some respects, 
since  it  would  not  need  to  collect  and  analyse  information  from  consumers  before  deciding 
whether or not to provide an account. 
The administrative burden faced by Member States is considered to be limited and is therefore 
assessed  together  with  the  general  costs  of  monitoring  and  supervising  enforcement  by  the 
relevant national authorities.  
The  preferred  options  for  transparency  and  comparability  of  fees  focus  on  establishing 
standards  and  setting  requirements  regarding  the  provision  of  information,  which  would 
inevitably generate administrative costs.  
The main administrative burden would arise from the internal processes of credit institutions 
being adapted to cater for information requirements for both consumers and authorities. This 
comprises mainly the cost of adapting information systems and materials.  There would also 
be  a  cost  for  Member  States  of  organising  and  running  public  information  campaigns 
concerning  consumer  awareness  of  the  right  to  access.  Administrative  costs  would  not  be 
incurred by credit institutions or Member States in the absence of legislation; consequently, 
all administrative costs identified are treated as part of the administrative burden. 
When  expressed  as  a  percentage  of  total  compliance  costs,  the  administrative  burden 
represents  24%  -  29%.323    Credit  institutions  would  incur  between  95%  and  96%  of  this. 
While  the  nature  of  the  proposals  inevitably  gives  rise  to  an  administrative  burden,  all 
possible means and available tools have been employed within the analysis in order to remain 
consistent  with  the  Commission's  proactive  approach  to  reducing  the  administrative  burden 
upon citizens, businesses and public bodies. 
A description of the methodology used to determine the administrative burden is provided in 
Annex VI to this impact assessment, together with a detailed breakdown of relevant activities 
and corresponding costs. Table 23 below provides a summary of the amount of administrative 
burden per stakeholder group.   

Table 23: Summary Administrative burden expressed in terms of total compliance costs 

Total EU costs (million EUR) 

Credit institution costs: 
 One-off:  
 Recurring: 
Total credit institution costs: 
Website operators costs: 
 One-off:  
 Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
 Recurring: 
Total Member State costs: 

Grand total 
Share of total: 

Total 
compliance 

Min 
Administrative 
Burden 

% 

Total 
compliance 

Max 
Administrative 
Burden 

% 

355.59 
2,251.01 
2,606.60 

0.32 
4.77 
5.09 

3.63 
23.65 
27.28 

253.55 
354.61 
608.16 

0.32 
4.77 
5.09 

2.32 
22.77 
25.08 

638.33 

2,638.97 
Credit institutions: 
Comparison website  
operators: 
Member States: 

71 
16 
23 

100 
100 
100 

64 
96 
92 

24 
95 

1 
4 

618.78 
3,163.54 
3,782.32 

428.69 
651.28 
1,079.97 

0.65 
9.53 
10.18 

4.00 
28.26 
32.26 

0.65 
9.53 
10.18 

2.65 
26.52 
29.17 

3,824.76 

1,119.32 

  Credit institutions: 

Comparison website 
operators: 
Member States: 

69 
21 
29 

100 
100 
100 

66 
94 
90 

29 
96 

1 
3 

323  Total compliance costs in this case exclude costs of compliance related to access given that the analysis did not identify 
any significant administrative costs in this area. As a result the table compares relevant administrative burden in the 
areas of presentation requirements for bank fees and switching with total compliance costs in these two areas. 

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8.2.5. 

Impact on small and medium-sized enterprises 

As  noted  in  Chapter  1,  this  Impact  Assessment  focuses  on  payment  accounts  held  by 
consumers. It does not cover payment accounts held by small and medium sized enterprises 
(SMEs),  though  it  is  likely  that  SMEs  would  benefit  substantially  from  this  package  while 
facing minimal, if any, costs. Some SMEs, in particular sole traders or one person companies, 
may not hold business accounts but rather run  their businesses from their personal payment 
accounts. No statistical data on the number of such companies exists. Such enterprises would 
fall  under  the  scope  of  this  proposal  and  would  accordingly  reap  the  related  benefits.  As 
reported by the World Bank: "without inclusive financial systems, poor people must rely on 
their  own  limited  savings  to  invest  in  their  education  or  become  entrepreneurs—and  small 
enterprises must rely on their limited earnings to pursue promising growth opportunities. This 
can  contribute  to  persistent  income  inequality  and  slower  economic  growth."324  The  costs 
faced by such consumers/enterprises would most likely be limited to an account management 
fee;  however,  given  the  increased  competitive  pressures  in  the  market  resulting  from  this 
package, this is likely to fall long-term. Further, as described in Section 7.1, businesses could 
potentially  benefit  significantly  from  improved  consumer  access  to  electronic  payments,  in 
particular  from  consumers  being  able  to  shop  throughout  the  EU.  Moreover,  non-
discriminatory instruments and online facilities in relation to payment account services would 
trigger a potential increase in both domestic and cross-border trade. Small and medium-sized 
internet  businesses  are  likely  to  benefit  considerably  from  a  higher  number  of  banked 
consumers: there is a huge growth potential if more people are able to pay online.  
The  further  development  of  this  sector  could  also  help  tackle  unemployment  problems  in 
Member States, especially where many young people are unemployed (e.g. Spain). Growing 
internet use will also mean greater profits for larger companies who have already established 
online  sales  channels.  Finally,  for  businesses  of  all  sizes,  it  would  be  cheaper  to  employ 
people, since more salaries could be paid by electronic bank transfer, thus avoiding costs of 
expensive cash or cheque transactions.   

8.2.6.  Other impacts 

With  regard  to  the  impact  on  third  countries,  the  introduction  of  rules  in  these  three  areas 
would  not  lead  to  discrimination  against  credit  institutions  from  third  countries  willing  to 
offer  their  services  in  the  EU,  as  they  would  need  to  comply  with  the  same  rules.  If  the 
proposed  options  were  extended  to  the  three  European  Economic  Area  countries  which  are 
not  members  of  the  EU,  the  same  impacts  as  described  above  would  affect  stakeholders  in 
Iceland,  Liechtenstein  and  Norway.  No  direct  impact  on  the  environment  can  be  expected 
from the policy proposals. Indirectly, a reduction in the level of cash in circulation resulting 
from  increased  use  of  electronic  means  of  payment  via  payment  accounts  could  bring 
environmental benefits: an ECB study found that the environmental impact of euro banknotes 
during their complete lifecycle was the equivalent of each European citizen driving a car for 
one  hour  or  leaving  a  60  watt  light  bulb  on  for  half  a  day.325  Similarly,  there  would  be 
reduction in the use of those chemicals used to print euro banknotes. 

8.3. 

Proportionality of the preferred options 

The actions entailed by the EU level intervention are limited to those necessary to achieve the 
stated  objectives.  The  elements  of  the  package  are  complementary  and  provide  the  right 
balance  between  effectiveness  in  ensuring  a  fully  functioning  internal  market  for  retail 
financial services with a high level of consumer protection and due regard to efficiency. 

324  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 1. 
325  http://www.ecb.int/euro/html/environment.en.html  

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Only  binding  legislation  would  ensure  a  level  playing  field  throughout  the  EU,  minimising 
costs  and  maximising  the  scope  for  economies  of  scale  for  account  providers  seeking  to 
operate cross-border.  
Adopting binding legislation imposes an implementation burden for stakeholders in terms of 
time  and  money.  Member  States'  administrations  would  incur  costs  for  designing, 
implementing, transposing (in case of a Directive) and enforcing legislation. However, while 
providers  would  face  one-off  and  recurring  implementation  costs,  these  would  be  similar  to 
those incurred under a Recommendation or self-regulation, if properly applied. The burden on 
Member States resulting from the preferred package is most proportionate since the objectives 
would  be  met  without  duplication  of  expenses  or  unnecessary  administrative  encumbrances 
(see paragraphs 8.2.1, 8.2.2 and 8.2.4). 
A  Directive  permits  flexibility  in  implementation  at  national  level  and  thus  risks  market 
fragmentation.  However,  it  enables  tailor-made  solutions  to  be  designed  to  address  national 
market specificities. Moreover, Commission guidance or implementing measures may be used 
to  limit  variations  in  implementation.  A  Directive  could  also  allow  for  maximum 
harmonisation  in  some  areas  and  minimum  harmonisation  in  others  providing  further 
flexibility.  
A  Regulation  allows  for  quick  implementation  of  fully  harmonised  measures.  This  would 
ensure  a  level  playing  field  for  both  consumers  and  businesses  throughout  the  EU.  It  also 
offers  a  greater  potential  for  private  enforcement  as  Regulations  can  be  directly  invoked  by 
businesses and citizens before national administrations and courts, whereas this can only be 
done in very limited circumstances with Directives.  
While  a  non-binding  approach  would  probably  be  less  expensive  for  industry  and  Member 
States,  its  value  could  be  limited  considering  the  current  weaknesses  in  self-regulatory  and 
non-binding approaches attempted within the three areas, as described above in Section 3.2. 

9. 

MONITORING AND EVALUATION 

The  proposed  legislative  package  would  include  a  provision  stating  that  a  review  of  its 
appropriateness and effectiveness in meeting the stated objectives should be carried out. This 
review should take place a few years after implementation. 
For transparency of fees and switching, Member States may be asked to provide information 
on  the  number  of  switches  on  an  annual  basis  as  well  as  details  on  possible  customer 
complaints.  
Specifically for access, the Commission will invite Member States to provide, on an annual 
basis:  the  number  of  basic  payment  accounts  opened;  the  number  of  applications  for  basic 
payment  accounts  refused,  including  the  grounds  for  refusal;  the  number  of  terminations  of 
such accounts; and the associated charges. The Commission will monitor the features of basic 
payment  accounts  and  verify  that  Member  States  have  undertaken  adequate  consumer 
information campaigns. Finally, the Commission will evaluate whether cross-border access to 
basic payment accounts is easily available to consumers without any unnecessary barriers at 
national level.  
In order to assess the implementation and effectiveness of the measures, it will be necessary 
to  improve  the  quantity  of  data  available  in  the  three  areas.  This  could  be  achieved,  for 
example, through a public consultation, research, mystery shopping exercises, questionnaires 
to stakeholders, and the monitoring of consumer complaints. These would be conducted ahead 
of the scheduled review. 

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ANNEX I 
POLICY BACKGROUND 

1. 

1.1. 

EUROPEAN COMMISSION STUDIES AND RESEARCH 

Quantification of economic impacts of EU action to improve fee transparency, 
comparability  and  mobility  in  the  internal  market  for  bank  personal  current 
accounts. 

This study was carried out in 2012 on the Commission’s behalf by GHK. The study quantifies 
the economic impacts in terms of costs and benefits of different policy options and presents 
them  as  net  changes  to  the  baseline  scenario.  The  tasks  for  analysis  are  broken  down  into 
different  sections  according  to  the  policy  options  being  assessed.  Fee  transparency  and 
comparability  is  broken  into  options  for  ex-ante  disclosure  (pre-contractual)  and  fee 
disclosures  and  ex-post  fee  disclosures.  Switching  options  cover  actions  to  facilitate  the 
process  of  switching  in  sections  and  actions  to  render  switching  an  error  free  process  with 
respect to the execution of payments and receipts. 
Unless  otherwise  stated,  all  references  in  this  impact  assessment  to  quantified  costs  and 
benefits in the areas of bank fees and switching are sourced from this study. 

1.2. 

Behavioural  study  on  bank  fees  transparency  and  comparability  and  bank 
mobility  

This  study  was  carried  out  in  2012  by  TNS,  on  behalf  of  the  European  Commission.  The 
study focuses on issues related to bank fees transparency, comparability and bank mobility. In 
an  experimental  setting,  the  study  investigated  the  impact  of  different  policy  options  to 
improve  information  provision  on  bank  account  offers  and  encourage  switching.  The  study 
was conducted through an online survey covering 10 Member States (France, Germany, Italy, 
Ireland,  Latvia,  Netherlands,  Romania,  Spain,  Sweden,  and  the  United  Kingdom)  and 
approximately  10,000  respondents.  The  study  used  survey  questions  to  collect  information 
about personal finances, general perceptions and understanding of information provision. The 
experimental part of the study tested the degree to which people react rationally in response to 
a range of information stimuli.  While none of the approaches related to information provision 
generated a significant impact on consumer behaviour, the study provided important insights 
into consumer perceptions and awareness of costs. 
Due care was taken in making use of the results of the study for the purposes of this impact 
assessment,  in  particular  by  taking  into  account  a  number  of  relevant  intervening  factors. 
Firstly, the study was carried out online, which implies that the sample included consumers 
with  above  average  levels  of  financial  literacy,  even  though  the  sample  is  statistically 
representative  at  national  level.  Secondly,  an  experimental  environment  poses  a  number  of 
constraints when recreating real-life consumer choices. These include the absence of elements 
influencing decision-making in the real life and which are specific to credence goods, such as 
relationship-building  and  advice.   Other  elements  that  could  not  be  reproduced  faithfully 
within  an  experiment  setting  relate  to  the  impact  of  branding  or  to  the  use  of  alternative 
distribution channels in online purchases.  

1.3. 

Consumer  Market  Study  on  the  consumers'  experiences  with  bank  account 
switching with reference to the Common Principles on Bank Account Switching 

This study, carried out on the Commission’s behalf by GfK was published in January 2012. 
The  objective  was  to  monitor  and  evaluate  the  effectiveness  for  consumers  of  the 
implementation  of  the  Common  Principles  on  Bank Account Switching (CP), in addition to 

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understanding the consumer experience when attempting to switch a payment account. More 
specifically,  the  study  was  designed  to  evaluate  compliance  with  the  CP  in  relation  to  the 
detailed  elements  of  information  and  staff  facilitation  of  switching  which  can  be  physically 
examined  in  banks,  examined  visually  on  websites  and  through  oral  and  written 
communication  with  bank  staff.  The  conclusions  of  this  report  were  that  there  is  no 
consistency across banks in the EU in terms of the timescales taken to switch a bank account. 
Mystery  shopping  is  a  technique  used  widely  for  checking  the  performance  of  traders  or 
service providers towards consumers. Though not representative, it illustrates the experience 
of real consumers by replicating situations they encounter while purchasing goods or services. 
Mystery shoppers are carefully selected so that they match relevant consumer profiles. Their 
tasks can range from simple observation to more complex interaction involving role play to 
assess compliance, weaknesses in procedures or quality of service Mystery shopping is mostly 
conducted face-to-face, by telephone or online. 
Results  of  a  mystery  shopping  survey  can  be  a  rich  source  of  information  not  only  for 
business  operators,  but  also  for  policy  makers,  because  they  complement  the  picture  of 
consumer  conditions.  They  are  often  also  the  single  most  effective  means  to  monitor 
compliance with detailed rules and regulations. 

1.4. 

Data collection for prices of current accounts provided to consumers 

This  study  was  carried  out  by  Van  Dijk  Management  Consultants  with  the  Centre  for 
European Policy Studies (CEPS) and was published in 2009. The purpose of the study was to 
determine  the  transparency  of  fees  charged  in  the  context  of  having  and  using  a  payment 
account; to compare prices for the services linked to a current account and finally analysing 
the underlying factors behind price differences within and across Member States. Overall, the 
study  improved  the  knowledge  of  the  market  of  retail  payment  services  in  the  27  EU 
countries.  First,  it  provided  a  detailed  collection  of  the  prices  of  accounts,  packages  and 
operations  for  224  banks  covering  on  average  81%  of  the  EU  market  and  representing  the 
diversity of institution categories. Second, for each country and for the EU27 as a whole, it 
developed  four  categories  of  user  profiles,  i.e.  average,  active,  passive  and  basic.  Third,  it 
matched  prices  and  user  profiles  to  produce  'priced  profiles'  to  analyse  dispersion  of  offers 
within countries and draw comparisons between countries. Fourth, it provided an assessment 
of  the  transparency  and  comparability  of  prices  for  consumers.  Moreover,  the  study 
highlighted a major hindrance to carrying out monitoring: to create the profiles, there was a 
lack  of  consistent  data  covering  all  the  services  targeted.  Finally,  this  study  played  a  very 
important  role  in  the  context  of  the  improvements  introduced  by  the  Single  Euro  Payments 
Area (SEPA) to the market of payments.  

1.5. 

Sector Inquiry into Retail Banking 

In June 2005, on the basis of a number of indications of market fragmentation, entry barriers 
and lack of effective choice on the demand side in retail banking, the Commission launched a 
sector  inquiry  into  retail  banking,  which  covered  the  issue  of  customer  mobility.  In 
January 2007,  the  Commission  published  its  final  report,  referred  to  as  the  'sector  inquiry' 
throughout this impact assessment.326 The sector inquiry identified four sources of switching 
costs  that  are  likely  to  reduce  the  ability  of  consumers  to  switch  payment  accounts: 
administrative burden, information asymmetry and low price transparency, bundling and tying 

326  Relevant documents available at: 

http://ec.europa.eu/competition/sectors/financial_services/inquiries/retail.html 

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and closing charges. The conclusion of the inquiry on the issue of customer mobility was that 
"proportionate steps to reduce switching costs will enhance competition in retail banking."327 

2. 

EXPERT GROUPS 

2.1. 

Expert Group on Customer Mobility 

The  Expert  Group  on  Customer  Mobility  In  Relation  To  Bank  Accounts  was  established  in 
May 2006 and was tasked with identifying existing obstacles to customer mobility in relation 
to payment accounts and providing recommendations on how the obstacles identified should 
be  addressed  –  the  Group  however  was  not  asked  to  measure  the  impact  of  its 
recommendations. The Group included 19 experts selected in a personal capacity,328 coming 
from  the  banking  sector,  consumer  organisations  and  academics  but  without  necessarily 
representing the views of their respective organisations. The Expert Group met 9 times during 
2006-2007.  The  Report  of  the  Expert  Group  was  published  in  June  2007.  The  Group’s 
members’ views diverged on most issues, e.g. the very fact that customer mobility is an issue 
to  be  addressed  or  the  relevant  context  for  analysing  this  issue,  such  as  the  impact  of  the 
Union single payments market, consumer behaviour and bank strategies.  
Concerning account switching, the Report proposed 9 recommendations (with varying levels 
of support from the Group) to reduce information asymmetry and improve price transparency, 
10  recommendations  (some  unanimous,  some  not)  to  reduce  administrative  burden  that 
consumers  may  face  when  wishing  to  switch  accounts,  3  recommendations  (with  varying 
levels of support from the Group) to address the issue of closing charges, while no consensus 
was found on tying and bundling.  
With  respect  to  cross-border  opening  of  accounts,  the  Report  recommended  that  the 
Commission look into existing legal and regulatory barriers and contained 6 recommendations 
(with  varying  levels  of  support  from  the  Group)  to  address  information  barriers  and 
uncertainty as well as 3 recommendations (with varying levels of support from the Group) to 
improve access to accounts for non-residents. 
The  report  was  opened  for  consultation  in  June  2007.  All  responses  to  the  consultation 
authorised  for  publication  were  published  on  the  internet.329  A  report  summarising  the 
feedback received in the consultation was also published on 20 November 2007.330 

2.2. 

Government Expert Group on Retail Financial Services 

The  Government  Expert  Group  on  Retail  Financial  Services  (GEGRFS)  was  established  in 
2007 and comprises Member State government experts. Its role is to assist the Commission in 
the  development  of  its  policy  on  retail  financial  services,  including  cross-sectoral  issues. 
GEGRFS  has  discussed  issues  relating  to  payment  accounts  on  several  occasions  since  its 
establishment.  Access  to  basic  payment  accounts  has  been  discussed  7  times  (June  and 
September  2007,  June  2008,  June  2009,  November  2010,  and  March  and  September  2012). 
Switching of payment accounts has been discussed 7 times (June and September 2007, June 
2008, June 2009, November 2010, and March and  September 2012). Bank fee transparency 
has been discussed five times (June 2007, November 2009, November 2010 and March and 
September 2012). 

327  SEC (2007)16 accompanying COM(2007)33, p. 77. 
328  http://ec.europa.eu/internal_market/finservices-retail/docs/baeg/composition-en.pdf 
329  http://ec.europa.eu/internal_market/finservices-retail/baeg_comments_en.htm  
330  http://ec.europa.eu/internal_market/finservices-retail/docs/baeg/summary_consultation_en.pdf  

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3. 

PREVIOUS PUBLIC CONSULTATIONS 

Public consultation on access to a basic payment account (2010) 

3.1. 
On  6  October  2010,  the  European  Commission  published  a  consultation  document331  on 
access to a basic payment account and invited stakeholders to respond. The objective of the 
consultation  was  to  collect  stakeholders’  views  on  the  envisaged  measures  on  access  to  a 
basic  payment  account  in  order  to  strengthen  and  deepen  the  Commission  services’ 
understanding  of  the  appropriate  policy  options  in  this  field.  Stakeholders  were  invited  to 
express  their  opinions  and  positions  on  the  principle  of  a European  harmonised  framework 
aiming  at  guaranteeing  the  right  for  consumers  to  access  a  basic  payment  account.  In  total, 
contributions  were  received  from  stakeholders  in  19  Member States  as  well  as  from 
representative bodies at EU and international level. 
The  consultation  allowed  the  identification  of  some  key  messages  from  stakeholders.  First, 
the financial industry was generally against a binding EU instrument in this field, arguing that 
such an initiative would not add value compared to what has already been developed and what 
could  be  realised  at  national  level  in  a  dialogue  with  the  industry.  Second,  consumer 
representatives  were  supportive  of  an  initiative  that  will  ensure  effective  access  for  all 
consumers to an account with a sufficient range of functionalities likely to enable them to live 
a  normal  life.  They  favour  an  EU  level  proposal  which  would  introduce  only  minimum 
standards,  leaving  Member States  free  to  adapt  them  in  line  with  local  conditions  and 
consumers’  needs.  Third,  both  national  public  authorities  and  financial  industry  tend  to 
consider  that  the  compliance  with  customer  due  diligence  requirement  is  a matter  of  the 
utmost  importance.  The  issues  for  which  there  was  the  most  consistent  cross-stakeholder 
approach  vis-à-vis  possible  EU  action  was  the  acknowledgment  that  access  to  a  payment 
account is highly desirable for the widest possible part of society is important and the need to 
ensure that any EU initiative would allow sufficient flexibility at national level. 

3.2. 

Consultation on financial inclusion (2009) 

On  6 February 2009,  the  European  Commission  published  a  consultation  document  on 
financial inclusion: ensuring access to a basic payment account and invited the stakeholders to 
respond  by  6  April.  The  objective  of  this  consultation  was  to  collect  views  from  all 
stakeholders on how financial inclusion can be improved and, more specifically, on how best 
to ensure that by a certain date, every EU citizen or resident had access to a basic payment 
account. The Commission services in particular welcomed input on how the responsibilities 
and  competences  between  the  public  authorities  and  the  private  sector  and  more  broadly 
between  the  national  and  the  European  level,  should  best  be  shared  to  address  financial 
exclusion, and on what instruments could be used. The scope of the consultation was limited 
to  access  to  basic  payment  accounts,  which  include  services  such  as  payments  and 
withdrawals  but  excludes  overdraft  facilities.  The  European  Commission  received  97 
responses  to  the  public  consultation.  The  respondents  can  be  classified  into  seven  main 
categories: public authorities, consumers/users, financial services industry, trade unions, civil 
society  organisations,  academics/think  tanks,  and  individuals/others.  In  total,  contributions 
were  received  from  stakeholders  in  20  EU  Member States  as  well  as  from  representative 
bodies at EU and international level. 
In general, most respondents thought that access to a basic payment account was considered 
necessary  for  fully  participating  in  society.  It  was  recognised  that  financial  exclusion 
contributes  to  social  exclusion  and  that  denying  access  of  some  persons  to  basic  financial 
services opens a gateway to denying them a host of other fundamental, social and economic 

331  http://ec.europa.eu/internal_market/consultations/2010/payment_account_en.htm 

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rights. It was also accepted that financial exclusion is increasingly a problem in the EU, and 
considering the important societal role of financial services, the level of financial exclusion in 
Europe is alarming. Many respondents agreed that increasing numbers of people are likely to 
be affected as a result of the financial crisis, and welcomed the priority that the Commission 
gives to this public policy challenge that the EU is currently facing. Access to a basic payment 
account  was  viewed  by  many  as  the  most  urgent  issue  to  be  tackled,  while  other  financial 
services, e.g. savings, insurance or credit, could be looked at in the future. 

3.3. 

Consultation on the report of the Expert Group on Customer Mobility (2007) 

A  public  consultation  on  the  above-mentioned  Expert  Group's  report  was  held  from  5  June 
until 1 September 2007. Part of the banking industry, mostly from Member States where some 
measures to facilitate customer mobility are in place, together with consumer representatives 
and some other respondents, agreed with the Commission that customer mobility is one of the 
factors determining the intensity of competition and therefore is an important pre-requisite for 
well-functioning  retail  banking  markets.  The  latter  group  of  stakeholders  was  generally 
supportive  of  facilitating  customer  mobility  across  the  EU,  but  stressed  the  importance  of 
focusing  on  the  easiest  and  most  cost-effective  ways  to  do  so.  In  terms  of  measures  to 
facilitate  the  process  of  payment  account  switching,  the  introduction  of  switching  services 
was considered acceptable to most of the stakeholders.  

4. 

COMMISSION POLICY STATEMENTS 

4.1. 

Single Market Act 

The Bank Account initiative is one of the priority actions of the Single Market Act II (SMA 
II),  adopted  by  the  Commission  on  3  October  2012  in  order  to  deliver  inclusive  growth 
without  discrimination,  allow  for  economic  and  social  participation  and  spur  territorial 
cohesion.  In  particular,  key  action  12  of  the  SMA  II  announces  Commission  legislative 
proposals  to  "give  all  EU  citizens  access  to  a  basic  payment  account,  ensure  bank  account 
fees are transparent and comparable, and make switching bank accounts easier".332  
The SMA I, adopted by the Commission in April 2011, already called for enhanced protection 
of consumers of retail financial services "with particular regard to the transparency of bank 
fees and better protection of borrowers in the mortgage market". The Commission had also 
announced  "an  initiative  concerning  access  to  a  basic  payment  account  for  all  citizens  at  a 
reasonable  cost,  wherever  they  live  in  the  EU"  in  order  to  enable  all  citizens  to  participate 
actively in the single market.333 

4.2.  Monti Report 

The  new  strategy  for  the  Single  Market  (2010  Monti  report)  underlined  the  importance  of 
improving  "the  transparency  of  bank  fees,  ensure  the  availability  of  standardised  and 
comparable information for retail financial products and facilitate bank customer mobility". 
The  report  also  recognised  the  importance  of  access  to  basic  banking  services.  The  lack  of 
basic  banking  services  prevents  a  relevant  number  of  European  citizens  from  effectively 
accessing the Single Market. The report called for a Commission legislative proposal ensuring 
that  all  citizens  are  entitled  to  a  number  of  basic  banking  services.  In  this  way,  the  EU 
framework for financial inclusion would complement the ongoing comprehensive reforms of 

332  "Single Market Act II - Together for new growth", COM(2012) 573 of 3 October 2012, page 16. 
333  COM(2011)206. 

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financial services regulation at EU level, thus allowing an important part of the population, in 
particular in the new Member States to reap more fully the benefits of the Single Market.334 

4.3. 

Single Market Review 

In  November  2007,  on  the  basis  of  the  feedback  received,  the  Commission  published  its 
Communication  on  a  single  market  for  21st  century  Europe.335  This  was  accompanied  by  a 
Commission  staff  working  document  on  initiatives  in  the  area  of  retail  financial  services,336 
where  the  Commission  announced  its  intention  to  invite  the  banking  industry  to  develop, 
before mid-2008, a set of common rules on payment account switching (switching service), to 
be  applied  by  banks  in  each  Member  State  when  customers  switch  at  national  level.  Such 
switching service should facilitate the operation of switching  by, for example, ensuring that 
direct debits and standing orders are transferred within a certain deadline to the new bank, that 
proper  information  is  given  to  the  customer  and  that  there  is  adequate  cooperation  between 
both banks involved. The Commission also made it clear that the rules should be designed on 
the basis of the best practices already existing in Member States. It also indicated that, should 
the banking industry fail to set up adequate arrangements, legislation would be considered. 

4.4. 

Green Paper on Retail Financial Services 

In April 2007, the Commission published a Green Paper on Retail Financial Services in the 
Single Market, in which stakeholders were invited to reflect on how customer mobility could 
be enhanced. While consumer representatives argued that a number of barriers needed to be 
addressed,  the  banking  industry  was  less  convinced,  but  argued  that,  were  measures  to 
facilitate  customer  mobility  to  be  taken,  switching  services  would  be  the  most  appropriate 
way  to  do  so.  Member  States  generally  acknowledged  that  there  were  barriers  to  customer 
mobility that needed to be addressed. 

5. 

FEEDBACK FROM EU INSTITUTIONS 

5.1. 

European Parliament 

5.1.1.  Resolution on Access to Basic Payment Accounts 

On  4  July  2012,  the  European  Parliament  adopted  an  own  initiative  report,  drafted  by  MP 
Jurgen  Klute,  with  recommendations  to  the  Commission  on  Access  to  Basic  Banking 
Services.337 The report underlines that access to basic payment services is a precondition for 
consumers to benefit from the internal market and to reap the opportunities of e-commerce. It 
also ensures better inclusion in terms of access to employment, healthcare and housing. The 
report points out that it should be the right of consumers and not an obligation to open a basic 
bank account. 
The  report  highlights  particular  difficulties  of  migrant  workers  to  access  a  basic  payment 
account  in  another  Member  State,  which  obstructs  the  proper  functioning  of  the  internal 
market. It also suggests that anti-money laundering legislation should be applied in a justified 
manner  and  should  never  be  used  as  an  excuse  by  providers  to  reject  a  consumer’s 
application. The Parliament insists on a basic payment account to be provided free of charge 
or at low cost to any consumer who does not already have an account in that Member State. In 
addition,  fees  and  charges  imposed  by  providers  must  be  proportionate  and  reasonable. 

334  A New Strategy for the Single Market (Monti Report), 2010, 

http://ec.europa.eu/bepa/pdf/monti_report_final_10_05_2010_en.pdf  

335  http://eur-lex.europa.eu/LexUriServ/site/en/com/2007/com2007_0724en01.pdf 
336  http://ec.europa.eu/citizens_agenda/docs/sec_2007_1520_en.pdf 
337  European Parliament Resolution 2012/2055(INI). 

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Furthermore, providers should check the consumer’s regularity of income, credit history, level 
of indebtedness or expected turnover in order to grant access to a basic payment account. The 
report also provides for management services and standard payment services which should be 
made  available  together  with  the  basic  account.  It  also  invites  Member  States  as  well  as 
payment  services  providers  to  inform  consumers  about  the  availability  of  a  basic  payment 
account.  Moreover,  Member  States  should  designate  competent  authorities,  with  powers  of 
sanction,  to  ensure  appropriate  monitoring  and  enforcement  of  rules  on  access  to  a  basic 
payment account. 
The report proposes complementing legislation on access to a basic payment account with a 
legal initiative on transparency and comparability of bank fees, and facilitating switching of 
payment  accounts.  The  Commission  proposal  should  also  improve  seller’s  acceptance  of 
different payment methods in order to allow for easier internet shopping, further clarify anti-
money  laundering  rules  and  enhance  financial  education  which,  as  argued  by  financial 
industry, can help tackle financial exclusion.338 The report invites the European Commission 
to submit a relevant proposal of legislation by January 2013. 

5.1.2.  Resolution on vulnerable consumers 

On 22 May 2012, the European Parliament adopted an own initiative report, drafted by MEP 
Maria Irigoyen Perez, on a strategy for strengthening the rights of vulnerable consumers. This 
report assumes that all consumers are susceptible to becoming vulnerable consumers over the 
course  of  their  lives,  since  vulnerability  can  result  from  endogenous  as  well  as  exogenous 
causes.  The  report  asks  that  EU  legislation  address  the  problem  of  vulnerability  among 
consumers.  It  also  underlines  the  importance  of  improving  consumer  education  and 
information but notes that information alone does not fulfil its consumer protection function, 
especially  in  certain  sectors  and  clearly  in  cases  of  vulnerability.  The  report  asks  that 
appropriate and effective measures be taken in sectors not covered by Directive 2011/83/EU, 
where a particular vulnerability may exist, such as the financial sector. The report notes that in 
international  fora  the  need  to  protect  consumers  through  information  and  regulation  of  the 
financial markets has been recognised. The report also highlights that the complexity of these 
markets may lead consumers into excessive debt and stresses that more needs to be done by 
the financial services industry to provide clear and simple explanations about the nature of the 
products and services they provide, and calls on all stakeholders to develop effective financial 
literacy programmes. 

5.1.3.  Resolution on the contribution to the Annual Growth Survey 2012 

The European Parliament Resolution on the contribution to the Annual Growth Survey 2012, 
adopted in plenary in February 2012,339 stressed that access to basic banking services remains 
a  key  factor  for  social  inclusion  and  therefore  encourages  the  Commission  to  take  bolder 
action to guarantee this access. 

5.1.4.  Resolution on a single market for Europeans 
In its Resolution on a single market for Europeans,340 the European Parliament called on the 
Commission to submit by June 2011 a legislative proposal on guaranteeing access to certain 
basic banking services and to improve the transparency and comparability of bank charges by 
the end of 2011. 

338  European Banking Federation response to the 2012 Public consultation on bank accounts (see footnote 11), p. 13. 
339  European Parliament Resolution 2011/2319(INI). 
340  European Parliament resolution 2010/2278(INI), p. 4. 

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5.1.5.  Report on the Green Paper on Retail Financial Services and the Sector Inquiry into 

Retail Banking 

On  5  June  2008,  the  European  Parliament  adopted  a  Report  on  the  Green  Paper  on  Retail 
Financial Services and a Report on the Sector Inquiry into Retail Banking. According to the 
European Parliament, consumers who wish to change financial service provider must be free 
to  do  so  at  any  time,  with  minimum  legal  barriers  and  costs  involved.  The  Parliament 
encouraged  the  Commission  to  facilitate  customer  mobility  without,  however,  leading  to  a 
reduction  in  the  level  of  consumer  protection  in  the  Member  States.  The  Parliament  also 
encouraged  the  banking  industry  to  develop  best  practices  for  swift  and  efficient  account 
switching, taking into account the duration of the procedure and the costs associated with it. 

5.2. 

Council 

In December 2011, the Competitiveness Council adopted its conclusions on the results of the 
Single Market Forum. On the 20 main concerns of the Single Market (par.25), the COMPET 
Council calls on concrete follow-up, in particular through in-depth examining and appropriate 
steps  to  be  taken  to  ensure  progress  on  these  problematic  areas.  Two  of  the  main  concerns 
related  to  access  to  basic  payment  account  and  transparency  and  comparability  as  well  as 
switching of payment accounts. 

5.3. 

European Council 

The conclusions of the 2012 March European Council welcomed the Commission's intention 
to propose in the second half of this year a new round of measures designed to open up new 
growth  areas  in  the  Single  Market.  In  this  connection,  the  European  Council  stresses  the 
importance of completing the Single Market and removing remaining barriers. 
It is essential that EU actions aim to promote growth and solidarity in line with Europe 2020. 
Restoring  sustainable  growth  and  job  creation  requires  positive  action  at  EU  and  national 
levels to support competitiveness and social inclusion. 

European Economic and Social Committee (EESC) 

5.4. 
The  EESC  has  issued  several  reports  mentioning  issues  related  to  payment  accounts.341  In 
general, they agree that retail financial services represent one of the areas where the greatest 
shortcomings in the operation of the single market have been observed.342 

5.4.1.  Access to a basic payment account 

In the past, the EESC agreed with the Commission on the importance of having access to a 
payment account in modern economies.343 More recently, in the context of efforts to improve 
the single market for retail financial services, the EESC welcomed the Commission's initiative 
to  improve  access  to  basic  banking  services.344  On  financial  inclusion,  the  Committee  also 

341  Opinion on the White Paper on Financial Services Policy 2005-2010, OJ C309, 16 December 2006; Opinion on the 
Green Paper on Retail Financial Services in the Single Market, OJ C151, 17 June 2008; Opinion on Socially 
responsible financial products, C21, p. 33, 21 January 2011; Opinion on the Communication Towards a Single Market 
Act – For a highly competitive social market economy – 50 proposals for improving our work, business and exchanges 
with one another, OJ C132, p. 47, 3 May 2011; Opinion on Financial education and responsible consumption of 
financial products, C318, p. 24, 29 October 2011. 

342  Opinion on the Communication from the Commission to the European Parliament, the Council, the Economic and 

Social Committee and the Committee or the Regions: Towards a Single Market Act – For a highly competitive social 
market economy – 50 proposals for improving our work, business and exchanges with one another, OJ C132, p. 47, 3 
May 2011, point 2.2.1. 

343  Opinion on the White Paper on Financial Services Policy 2005-2010, OJ C309, 16 December 2006, points 4.3.3.2 and 

4.3.3.3. 

344  Opinion on the 'Communication Towards a Single Market Act – For a highly competitive social market economy – 50 
proposals for improving our work, business and exchanges with one another', OJ C132, 3 May 2011, point 2.2.1. 

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highlighted that financial institutions should take on the role of facilitating access to banking 
services for the poor, to prevent financial exclusion. It added that it is important to promote 
initiatives  that  foster  the  financial  inclusion  of  sections  of  society  that  are  at  high  risk  of 
exclusion  (women,  the  unemployed,  people  with  disabilities,  the  elderly,  the  poor,  etc.)  by 
ensuring  universal  accessibility  and  developing  financial  products  and  services  that  are 
tailored to these groups.345 

5.4.2.  Ease of comparison of bank fees and requirements covering presentation 

The EESC feels that transparency is crucial when interacting with consumers and that it is key 
in the process  of winning  back  consumer  confidence in the financial  services industry post-
financial  crisis.346  The  EESC  shares  the  Commission's  concerns  regarding  transparency  of 
banking conditions. They have mentioned that differences in prices and price formulas often 
result  in  information  asymmetry  and  make  it  difficult  to  compare  prices.  According  to  the 
EESC  however,  consumer  information  must  take  into  account  cultural  diversity,  i.e. 
information  requirements  must  be  geared  to  the  different  national  situations.347  The  EESC 
welcomed the Commission's initiative to improve the transparency and comparability of bank 
charges.348 

5.4.3.  Payment account switching 

The EESC considered that the Commission's aim to remove obstacles to the mobility of cross-
border  accounts  was  commendable  and  could  contribute  to  lowering  bank  charges.349  The 
EESC  has  also  stated  that  the  adoption  of  a  single  European  account  number  would  carry 
enormous  costs  that  would  be  totally  unjustified  and  that  would  end  up  being  paid  for  by 
consumers. According to the EESC, transferability should refer to all the transactions linked 
to the account, such as standing orders, direct debits or securities accounts, but certainly not to 
the account number.350 

345  Opinion on Financial education and responsible consumption of financial products, C318, 29 October 2011, points 5.2, 

7.5 and 7.8. 
Ibid. 

346 
347  Opinion on the Green Paper on Retail Financial Services in the Single Market, OJ C151, 17.6.2008, points 1.11, 1.13, 

1.16, 1.19,  3.2.2.1, 3.3.3, 4.4, 6.10, 7.2.1, 7.3. 

348  Opinion on the Communication Towards a Single Market Act – For a highly competitive social market economy – 50 
proposals for improving our work, business and exchanges with one another, OJ C132, 3.5.2011, point 2.2.1. 

349  Opinion on the White Paper on Financial Services Policy 2005-2010, OJ C309, 16 December 2006, points 4.3.3.2 and 

4.3.3.3. 

350  Opinion on the Green Paper on Retail Financial Services in the Single Market, OJ C151, 17 June 2008, points 1.11, 

1.13, 1.16, 1.19,  3.2.2.1, 3.3.3, 4.4, 6.10, 7.2.1, 7.3. 

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ANNEX II 
ACCESS TO BASIC ACCOUNT SERVICES 

1. 

PROBLEMS 

1.1. 

General problem: restricted access to account services 

1.1.1.  Large number of unbanked Europeans 

The number of consumers with no payment account is difficult to estimate. Much of the data 
available is not comparable. However, research estimates the number of EU citizens with no 
payment account at between 30 and 68 million according to two Eurobarometer surveys from 
2009 and 2011 respectively.351 At the same time, calculations based on World Bank data put 
the figure at 56 million in 2012.352 
A 2009 Eurobarometer survey found that there were around 30 million unbanked Europeans 
over the age of 18.353 Calculations based on a 2011 Eurobarometer survey,354 however, put the 
number of Europeans over the age of 15 without a payment account at more than 68 million. 
Differences  between  the  2010  and  2012  calculations  can  be  attributed  to  the  different 
questions asked. In 2009, the question referred to having a 'bank account' and, in 2011, to a 
'current bank account'. Moreover, both these calculations likely underestimate the number of 
persons  without  an  account:  they  are  based  on  representative  surveys  of  the  general 
population and volunteers; vulnerable groups of society are typically unlikely to participate in 
surveys.  Conversely,  it  should  be  noted  that  this  figure  may  include  a  very  slight  over-
estimation since it does not factor in people having joint accounts. 
National  data  also  exists,  but  is  fraught  with  similar  problems.  For  instance,  according  to 
recent reports, 1.54 million adults do not have access to a 'transactional' payment account in 
the United Kingdom355 and 96% of 'financially weaker' French households do not have access 
to a 'deposit' account.356 

1.1.2.  Levels of exclusion from basic account services vary between Member States 

Account penetration is diverse. The percentage of the population having a current account per 
country  as  of  2011  is  displayed  in  Graph  III  in  the  main  impact  assessment  report.  The 
different  levels  of  payment  account  penetration  across  the  EU  mean  that  the  extent  of  the 
problem and the probable impact of the presented policy options vary considerably. 
The  number  of  consumers  with  no  payment  account  varies  from  45%  and  53%  of  the 
population in Romania and Bulgaria respectively to close to 100% in Scandinavia (see Graph 

351  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 
for Strategy and Evaluation Services (CSES), July 2010, p. 14, (http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study) estimated that 30 million Europeans over the age of 18 do not have a bank account. 
Calculations based on the Special Eurobarometer on Retail Financial Services (European Commission, February 2012) 
put the number of Europeans over the age of 15 without a current account at more than 68 million. Differences between 
the 2010 and 2012 calculations can be attributed to the scope of the question and divergences in the population sample. 

352  Commission calculations based on data on the number of unbanked consumers from Measuring Financial Inclusion, 

The Global Findex Database, the World Bank, April 2012. 

353  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, p. 18, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  

354  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm  

355  Banking services and poorer households, Financial Inclusion Task Force, December 2010, p.6. Available at 

http://www.hm-treasury.gov.uk/d/fin_inclusion_taskforce_poorerhouseholds_dec2010.pdf  

356  Les conditions d'accès aux services bancaires des ménages vivant sous le seuil de pauvreté, CREDOC, 2010, p.19 
http://www.banque-france.fr/ccsf/fr/telechar/publications/rapport_credoc_etude_conditions_acces_services_ 
bancaires_pauvrete.pdf. 

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2A). In terms of volume, the most consumers without accounts are in Italy and Romania with 
more than 13 million citizens over the age of 15 without payment accounts, while Denmark 
and Luxembourg have the fewest number of consumers without accounts (See Table 2.A). 

1.1.3.  Evolution of the number of unbanked Europeans 

No robust statistical data is available to analyse the number of unbanked Europeans over time. 
The  only  time-series  data  available  is  from  Eurobarometer  for  which  a  survey  question  on 
whether  the  consumer  held  an  account  was  included  in  both  the  2005  and  2011  surveys. 
Nevertheless,  differences  in  the  question  asked  are  so  large  that  any  comparison  is 
meaningless. Whereas the 2011 survey asked about consumer holding of current accounts, the 
2005 survey asked two questions, one on the number of accounts with a cheque book and/or 
debit card attached and one on the holding of deposit accounts.357 
Nevertheless, some data on the number of Europeans who have opened an account in the last 
5  years  is  available  from  the  Eurobarometer  survey:  "over  a  quarter  of  those  who  own  any 
financial  products  have  opened  a  current  bank  account  in  the  last  five  years  in  just  four 
Member States: Romania (37%), Latvia (36%), Bulgaria (33%) and Lithuania (27%) which 
demonstrates that bank accounts market has been steadily growing in new Member States".358 
Moreover, according to data provided by Romania and Bulgaria there has been an increase in 
the  number  of  basic  payment  accounts  opened  in  2011;  652 107  accounts  were  opened  in 
Bulgaria  and  3 767 356  in  Romania.359  It  is  not  possible  to  draw  firm  conclusions  from  the 
Eurobarometer  data;  first,  it  does  not  account  for  multi-banking,  and  second,  it  does  not 
account for population growth, changes in demographic structure, and other relevant factors. 
With respect to the numerical data from Romania and Bulgaria, similar concerns apply. 

40%

20%

0%

Graph II.A: Payment accounts opened in the last 5 years (%) 

Current bank acco unt

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1.1.4.  Are there alternatives to payment accounts? 

In  the  current  increasingly  online  world,  the  role  of  payment  accounts  is  changing.  It  is 
therefore important to ask whether access remains important or whether alternative means of 
payment could be used. 
With  the  advent  of  the  internet,  a  range  of  products  which  act  as  substitutes  to  payment 
accounts  is  emerging.  In  the  developing  world,  online/mobile  services,  such  as  M-Pesa  in 
Kenya,  act  like  a  parallel  banking  system  allowing  phone  users  to  send  and  receive  money 
through agents.360 Similarly, in the EU, mobile payment systems are increasing in popularity. 
For example, Paypal has for several years operated an online payment mechanism. However, 

357  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p. 10-11 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm. 
Ibid., p.17. 

358 
359  Statistical data provided by Member States. 
360  New York Times. 28 April, 2012. See: http://www.nytimes.com/2012/04/29/sunday-review/the-post-cash-post-credit-

card-economy.html?_r=1  

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there  are  also  an  increasing  number  of  competitors  such  as  the  Google  Wallet,  which  is 
integrated to a consumer's mobile phone, linked to a consumer's credit card and can act as a 
payment  instrument  via  the  phone.  361  Globally,  e-payments  and  m-payments  collectively 
accounted  for  an  estimated  22.5  billion  transactions  in  2010.362  Furthermore,  e-payments 
(online  payments  for  e-commerce  activities)  are  expected  to  grow  globally  to  30.3  billion 
transactions from 17.9 (in 2010-13), while m-payments are expected to grow globally to 15.3 
billion transactions from 4.6 billion in the same period.363 
However,  these  alternatives  are  insufficient  substitutes  to  payment  accounts.  Prepaid 
payments or online payment mechanisms are set up in such a way that the consumer needs, in 
the  majority  of  cases,  to  have  a  payment  account  to  make  transfers  from  in  order  to 
pay/charge such cards or even a credit line (many telephone accounts are defined as consumer 
credit  as  the  transactions  involve  a  deferred  credit  unless  prepaid  cards  are  used). 
Consequently, many of the most vulnerable consumers may have difficulties in accessing or 
obtaining  such  payment  instruments.  Furthermore,  despite  the  increasing  popularity  of  e-
payments or m-payments, such payment mechanisms still count for an extremely limited stare 
of the market (See Graph I in the Impact Assessment Report).  

1.1.5.  Why do many consumers not have a payment account? 
A  2011  Eurobarometer  survey364  found  that  the  main  reason  (56%)  not  to  have  an  account 
was that the person did not need or want to have one. This percentage was higher in the New 
Member  States  (67%)  and  lower  in  the  EU15  (45%).  The  survey  also  showed  that  "older 
respondents are more likely to say they do not need or want a bank account", as well as those 
people  who  "spent  less  time  in  education".  Against  this  background,  it  is  estimated  that  25 
million365 consumers do not have an account but would like one. 33% (10 million consumers; 
of which almost 4 million are in Romania) of those without an account in EU 12 and 55% (15 
million consumers, of which more than 7 million are in Italy) of those without an account in 
EU 15 would like one. 

Graph II.B: Reasons why consumers do not have payment accounts 

Ibid. 

361 
362  World Payments Report 2011, CapGemini, p.4. 
363 
364  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p.8 

Ibid. 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm  

365  Commission services calculations based on Eurostat population data and Special Eurobarometer on Retail Financial 

Services, European Commission, February 2012, p. 31, http://ec.europa.eu/internal_market/finservices-
retail/policy_en.htm  

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Source: 2012 Eurobarometer 

Other reasons for not having a payment account include consumers being too young or their 
use of another person's payment account, but there was also a significant number of applicants 
who were refused access. It is estimated that almost 3 million consumers who would like an 
account have been refused access to one.366 These figures range from 0 in Denmark to over 1 
million in Italy.367 The reasons for refusal are: no regular income, incorrect documentation, no 
credit history and non-residence. 

Graph II.C: Number of refusals to open a payment account and reasons why 

Source Eurobarometer 2012 

366  Calculations by Commission services based on Measuring Financial Inclusion, The Global Findex Database, World 
Bank, April 2012, Special Eurobarometer on Retail Financial Services, European Commission, February 2012 and 
Eurostat population data. 

367  Calculations by Commission services based on Special Eurobarometer on Retail Financial Services, European 

Commission, February 2012 and Eurostat population data. 

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1.1.6.  Main categories of consumers with difficulties in accessing a basic payment account  

Accessing  a  payment  account  is  particularly  difficult  for  two  main  population  groups: 
'vulnerable' consumers and 'mobile' consumers who are active cross-border. This observation 
has  been  explicitly  confirmed  by  the  European  Consumer  Organisation  BEUC  in  their 
feedback to the consultation on bank accounts.368 

• 

• 

• 

Vulnerable  consumers  are  discussed  in  recent  legislation  but  have  not  been 
defined.369 They are described as consumers who are particularly vulnerable because 
of  their  mental,  physical  or  psychological  infirmity,  age  or  credulity.  This  impact 
assessment  considers  consumers  living  on  low  incomes  to  be  vulnerable:  they  are 
often excluded financially.370 This is a significant part of the EU population.  

Mobile consumers. Consumers move cross-border for various reasons including for 
work, study or retirement. Amongst those, migrant workers are probably the largest 
group.  

Based  on  the  feedback  collected  by  the  Commission,  it  is  assumed  that  those  who 
become resident in a Member State face fewer problems in accessing an account.371 
Consequently,  according  to  calculations  by  Commission  services,  the  mobile 
population  that  faces  difficulties  in  accessing  basic  account  services  is  estimated  at 
3.5 million or approximately 6.25% of those without a payment account.372 It should 
be noted that some providers recognise that migrant consumers represent a business 
opportunity and prepare special offers, such as for foreign students.373 

Box I: Data on mobile consumers: Erasmus and other cross-border students 

It  has  become  increasingly  easy  to  travel  and  study  in  another  EU  country.

374

  In  2010,  there  were  581 400  students 

375

) enrolled at universities in another Member State. 

(including 231 410 Erasmus students
A  payment  account  in  the  country  where  they  are  studying  is  indispensable.  Students  who  are  not  residents  often  receive 
financial support from their families at home. A payment account is the easiest and the cheapest channel for these resources 
to be transferred without paying excessive fees to cash the money. In addition, it can be difficult to rent an accommodation 
without a payment account as, e.g. in some German universities, rent in a student dormitory can only be paid for by means of 
a standing order.
 It is also no surprise that foreign students need to travel home from time to time and the easiest and the 
cheapest way of doing so by flying with a low cost air carrier. However, to buy a ticket without excessive intermediary costs, 
a student will need a payment account to be able to pay over the internet by bank transfer or credit card. 
In  March  2012,  the  Commission  launched  a  survey  of  Erasmus  and  exchange  students  from  EU  Member  States  to  check 
whether they encountered any difficulties in opening a bank account while studying abroad.  

376

 4 864 of them 
Out of the total number of ca. 600 000 EU students enrolled at foreign universities in another EU country
responded to the survey, of which there were 4 352 Erasmus students, 253 students of other exchange programmes and 259 
national students conducting their studies in their country of origin. The latter group is excluded from all subsequent data as 

377

368  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 20. 
369  Directive 2011/83/EU of the European Parliament and of the European Council of 25 October 2011 on consumer rights. 
370  Financial Services Provision and Prevention of Financial Exclusion, European Commission, March 2008, 

http://ec.europa.eu/employment_social/spsi 

371  See Section 1.2.5. in Annex II. 
372  Calculations by Commission services based on data from Eurostat, Measuring Financial Inclusion, The Global Findex 
Database, World Bank, April 2012, and Commission staff working document Demography Report 2010, p. 46. 

373  http://www.natwest.com/personal/current-accounts/g1/students-graduates/international-students.ashx  
374  http://ec.europa.eu/education/higher-education/doc1290_en.htm 
375  Erasmus, facts, figures and trends, European Commission, 2011, p. 4, 
http://ec.europa.eu/education/pub/pdf/higher/erasmus1011_en.pdf  

376  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, p.45 (http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study) and Commission survey of Erasmus students, 2012. 

377  European Commission estimation based on the Eurostat data on tertiary education students studying in another EU 
country in 2010: there were 581 400 EU students enrolled at foreign universities in another EU Member State. 

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they were unable to complete the questions. The total number of mobile students who responded is therefore 4 605. Students 
from all Member States with the exception of Malta took part in the survey. 

Graph II.D: Responses by country of origin 

Each of the 27 Member States was mentioned at least once as a destination where respondents   carried out the Erasmus or 
another exchange programme. 

Graph II.E: Member States where respondents carried out Erasmus or other exchange programmes. 

379

  Although  the 
2507  (54%)  students  tried  to  open  a  bank  account  while  2 098  (46%)  students  did  not  attempt  to  do  so.
majority of students found it relatively easy to open a payment account, a number of students faced difficulties. From those 
who  tried,  1646  (66%)  students  found  it  easy,  694  (28%)  considered  it  burdensome  and  167  (7%)  failed  to  open  a  bank 
account.
373 students who found the process burdensome responded that it took a long time; for 294 it meant too much paper-work, 
while another 375 respondents indicated that too many documents were required.
 Finally, of the 167 students who were 
refused an account, 95 (57%) were rejected due to "not being a national resident", while the remaining 72 (43%) indicated 
other reasons for refusal (not specified).

381

380

378

378  Commission survey of Erasmus students, 2012, see previous paragraph. 
379 
380 
381 

Ibid. 
Ibid. 
Ibid. 

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The reasons for not opening an account were that it took too long (54.9% of those who did not open an account) and/or too 
many documents (54.6% of those who did not open an account) and/or too much paperwork was required (42.8% of those 
who did not open an account).  

1.2. 

Specific problems 

The reasons why consumers face difficulties in accessing a payment account vary. 

1.2.1. 

Ineffective, inconsistent or non-existent regulatory framework 

Despite  Member  States  being  asked  to  comply  with  the  Recommendation  by  January  2012 
and a Commission review being announced for mid-2012, as illustrated by the report on the 
application of the Recommendation,382 regulatory failures have made the Recommendation's 
application sub-optimal.  

Table 2.A: Recommendation on access to a basic payment account 

Yes 

X 

X 

X 

Member 
States 
Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Germany 
Denmark 
Estonia 
Greece 
Spain 
Finland 
France 
Hungary 
Ireland 
Italy 
Lithuania 
Luxembourg 
Latvia 
Malta 
The Netherlands 
Poland 
Portugal 
Romania 
Sweden 
Slovenia 
Slovakia 
UK 

National frameworks implementing the Recommendation 
Self-regulation 
Legislation 

Partially 

Yes 

Partially 

No framework in 
place 

X 
X 

X 

X 
X 

X 

X 

X 

X 
X 
X 

X 
X 

X 
X 

X 

X 

X 
X 

X 

X 
X 

X 

X 

Source: European Commission analysis of Member States' reports 

In  general,  countries  with  a  legal  framework  in  place  have  lower  levels  of  exclusion  than 
those that have a self-regulatory framework or have no data at all (See Graph II.B) though the 
financial services industry argues that “there is no proven correlation between the existence 
of  a  legal  obligation  to  provide  access  to  a  bank  account  and  the  number  of  bank  account 
holders”.383 Analysis of the data on average account penetration shows that in those Member 
States  where  there  is  no  framework  in  place,  weighted  average  account  penetration  is  70% 
(27%  in  Romania  and  Bulgaria;  80%  in  other  Member  States)  compared  to  88%  in  those 
Member States which have industry based charters and 96% in those Member States with a 

382  National measures and practices as regards access to basic payment accounts. Follow-up to the Recommendation of 18 

July 2011 on access to a basic payment account, 22.8.2012,  http://ec.europa.eu/internal_market/finservices-
retail/docs/inclusion/followup_en.pdf  

383  European Banking Federation response to the 2012 Public consultation on bank accounts (see footnote 11),  p. 13 

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legal  framework  in  place.384  Consequently,  it  can  reasonably  be  assumed  that  a  legal 
framework is the most effective way of improving the accessibility of payments accounts. 
That being said, the mere existence of a framework does not in itself ensure its effectiveness. 
Among those Member States which have industry charters or other self-regulatory initiatives 
in place, some consider that their implementation has been unsatisfactory (e.g. Germany). For 
those  with  a  legal  framework,  only  six  countries  comply  (or  will  soon  comply)  at  least 
partially with the Recommendation. These are France, Belgium, Italy, Luxembourg, Portugal 
and Finland. Despite this, even in those countries, there remains a portion of the population 
financially  excluded.  This  therefore  raises  the  question  of  the  effectiveness  of  some  of  the 
measures in place. For instance, in France, even if 3% of poor households have already been 
refused access to an account, only 5% of them have made use of the procedure foreseen in the 
law  following  a  bank  refusal.385  In  Belgium,  5%  of  the  respondents  not  having  an  account 
mentioned  that  they  had  tried  to  have  one  but  their  application  was  rejected  by  the  bank 
without any specific reason.386 Consumer awareness of their rights and effective enforcement 
of the framework are, therefore, vital.  
Moreover,  in  those  countries  where  a  framework  exists  (or  is  in  the  process  of  being 
introduced),  the  framework  takes  on  a  range  of  different  forms  ranging  from  specific 
legislation  to  industry  charters.  Furthermore,  those  requirements  diverge  considerably.  In 
some countries (e.g. Belgium, France, Italy and Portugal), the characteristics and conditions 
of  the  basic  account  are  defined.  In  others  (e.g.  in  Denmark,  Finland,  Luxembourg  or 
Sweden), the law introduces a right to a payment account without any further specification.  
Diverging legal and self-regulatory frameworks create burdens when trying to operate cross-
border due to divergent rules and practices. In many cases, credit institutions who offer their 
services in more than one Member State will need to create different products or create new 
standard operating procedures for providing a payment account according to the approach of 
each Member State. This is expensive and time consuming and prevents economies of scale, 
hindering  cross-border  business  and  the  realisation  of  a  single  market.  In  particular  these 
fragmented  national  rules  prevent  providers  from  offering  online  payment  accounts  across 
borders posing a barrier to new market entrants and thus to a greater competition. 

1.2.2.  Limited bank profitability from certain groups of consumers 

Vulnerable  and  mobile  consumers  may  be  perceived  by banks as not profitable.  In  fact,  the 
European  Consumer  Organisation  BEUC  reported  that  insufficient  consumer  income  was  a 
reason  for  banks  refusing  an  account.387  Current  accounts  are  generally  offered  at  low  cost 
because they are considered as a gateway product that would allow the bank to earn additional 
revenues.388 This opinion is shared by academics: "The basic banking service should be the 
first step in the banking system, so it would be interesting if banks were encouraged to offer 
wider  access  to  their  services  in  order  to  make  the  relationship  more  profitable  (but  still 

384  Calculations by Commission services on the basis of Member States' notifications, Special Eurobarometer on Retail 
Financial Services, European Commission, February 2012, p.31, http://ec.europa.eu/internal_market/finservices-
retail/policy_en.htm. For the purpose of calculations, Italy has been included under "industry charters" as the law 
entered into force on 28 December 2012, the convention setting out the conditions for access only entered into force as 
of June 2012. 

385  This implies that the citizen would request a written confirmation of the reasons for the refusal and provide it to the 

Banque de France, which will then designate a bank that will be required to open an account. 
386  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm 

387  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 20. 
388  See, for instance, Tying and other potentially unfair commercial practices in the retail financial service sector, Centre 
for European Policy Studies (CESP), 2009. Understanding and Combating Financial Exclusion and Overindebtedness 
in Ireland: A European Perspective, Georges Gloukoviezoff, p. 9. 

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appropriate to the needs of the customers…If the services provided are free and if the charges 
are capped, there is a real threat that basic banking services become an unbearable cost for 
the providers."389  
It might not be obvious for the bank that vulnerable or mobile consumers (who tend to change 
place  of  residence)  would  remain  long-term  clients  ready  to  be  offered  additional  services. 
Not  having  a  regular  income  or  permanent  residence  in  the  country  were  one  of  the  most 
frequent  reasons  given  by  the  2012  Eurobarometer  respondents  that  had  tried  to  open  an 
account but had been rejected by the bank.390 The contrary is argued by providers who state 
that by providing access to accounts, they can market and sell more products to consumers. 

1.2.3.  Limited and more costly access to basic financial products and services 

Consumers without a payment account find it more difficult and more expensive to purchase 
other financial products. As illustrated in paragraph 1.2.7, payment accounts act as a gateway 
to  other  financial  products  and  services,  e.g.  home  insurance.  In  addition,  these  products 
would most likely be linked to the payment account, making it easier for the consumer to have 
a control over his liabilities, expenses and available funds.  
The  consumer  who  does  not  have  a  payment  account  and  is  not  in  the  habit  of  using  basic 
banking services, when in need of a financial product (e.g. consumer credit, fire insurance), 
will  most  likely  first  check  the  offers  of  non-banks  or  financial  brokers  whose  marketing 
campaigns are targeted, in particular, at vulnerable consumers. Services which they offer are 
usually easily available (e.g. SMS loans in some EU countries) but also more expensive (e.g. 
high interest rate) and without as many safeguards for consumers as those offered by regular 
banks. “This […] raises the issue of a need for basic banking services to be available for all 
consumers, which enables consumers to avoid higher-risk sources of credit. Arguments have 
been made that the provision of basic banking services to high-risk consumer groups as part 
of  a  financial  inclusion  programme  would  be  a  powerful  protection  against  irresponsible 
lending practices and so would be of great assistance in preventing over-indebtedness”.391 
It has been demonstrated that poor families without a payment account have to pay more to 
obtain credit often from informal lenders.392 For instance, "a loan from a pawnbroker of £100 
over six months will cost between 5% and 12% per month (equivalent to an APR of 70% to 
100%), making the total cost of the loan between £170 and £200. Households without a bank 
account who need to cash a £200 cheque from a third party quickly will be charged a fixed 
fee and interest: for example, a £200 cheque would cost £12 to cash at Cash Converters."393 
Again,  this  problem  mostly  concerns  poorer  and  less  educated  consumers  who  in  addition 
face a psychological barrier to approach a bank to enquire about a loan or another financial 
product. Even without trying, they will consider themselves not meeting the banks' criteria to 
be offered a service e.g. in terms of required documents. Therefore, they are likely to turn to 
non-bank  providers  which  can  offer  credit  with  a  simple  telephone  call  but  under  worse 
conditions than any credit institution. As a result, many vulnerable consumers end up in debt. 
This  risk  could  be  partly  avoided  if  they  had  easy  access  to  a  payment  account.  Once  they 
establish a link with a bank and the psychological barrier disappears, it would be natural for 

389  Understanding and Combating Financial Exclusion and Overindebtedness in Ireland: A European Perspective, Georges 

Gloukoviezoff, p. 9. 

390  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, p.26 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm. 

391  Understanding and Combating Financial Exclusion and Overindebtedness in Ireland: A European Perspective, Georges 

Gloukoviezoff, p. 4. 

392  Financial Inclusion for the Roma: Banking as a Key to Social Progress, Open Society Foundations, March 2012, p. 3, 

http://www.soros.org/sites/default/files/roma-financial-inclusion-20120321.pdf. 

393  UK poverty rip-off: The poverty premium 2010 briefing, p. 4. 

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many vulnerable consumers to check the offer of their bank first, before turning to informal 
lenders. 

1.2.4.  Low awareness of availability of basic payment accounts 

In the Member States where a right to a basic payment account has been introduced by law, 
these accounts are not actively marketed by banks since they prefer to offer more expensive 
variants of accounts to their clients.394 In Belgium, where every bank is obliged to provide a 
basic payment account upon the consumer's request, many unbanked consumers are unaware 
of the legal right to have one. 
In  other  cases,  the  economic  advantage  of  having  access  to  an  account  and  the  means  of 
payments associated to it may not be so clear for the consumer, particularly if high fees and 
penalties  are  charged  in  the  case  of  certain  events,  such  as  bounced  cheques  or  the  use  of 
overdraft facilities. These charges are often unclear at the moment of opening to consumers 
with  low  level  of  financial  literacy  and  result  as  a  huge  burden  when  they  later  have  to  be 
paid. The UK Financial Inclusion Taskforce calculated that, even if having an account would 
lead to savings of £125 to £215 on utility payments, part of those savings would be offset by 
an average loss of £140 per annum in penalty charges.395 

1.2.5.  Discriminatory rules on accessing payment accounts 

Asymmetric  information  between  the  credit  institution  and  the  consumer  can  lead  to  an 
application  being  rejected  because  the  consumer  is  considered  riskier  or  because  the 
information on the client is not readily available.  
Consumers associations note that consumers may be rejected for an account due to their lack 
of  any  regular  income.396  In  fact,  40%  of  consumers  who  would  like  an  account  but  were 
refused  cited  this  as  the  reason.  This  was  the  most  common  reason  for  refusal.397  This 
problem certainly affects vulnerable consumers, without any regular employment. Equally, if 
not more so, it can affect mobile consumers as with no account, it will be difficult for them to 
find employment or accommodation in a new Member State. 
Another  common  reason  why  mobile  consumers are  refused  an  account  is  non-residence.  It 
represents a significant barrier to the internal market, as stressed by the European Parliament 
Resolution,398 by impeding or prohibiting cross-border activity, for example, through the free 
movement of persons or the free provision of goods and services by businesses. 
The procedure for accessing payment accounts can differ tremendously. In order to open an 
account in some Member States, it is necessary to present an ID card (e.g. Belgium) while in 
other countries there is no such tradition (e.g. Sweden, UK).399 This can mean that a consumer 
seeking to open a payment account cross-border may be able to do so in some instances but 
not in others. This would impede or prohibit cross-border activity, for example, through the 
free movement of persons or the free provision of goods and services by businesses. Around 
half a million consumers across the EU have been refused access to an account due to the lack 
of  appropriate  documentation.  In  many  cases,  such  refusals  are  attributed  to  anti-money 

394  Le point sur le service bancaire de base, cinq ans après son introduction, Réseau Financement Alternatif, 2008, p. 4. 
395  Banking services and poorer households, Financial Inclusion Taskforce, December 2010. 
396  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 20. 
397  Calculation by Commission services based on data from Measuring Financial Inclusion, The Global Findex Database, 

World Bank, April 2012, Eurostat and Eurobarometer. 

398  European Parliament resolution of 4 July 2012 with recommendations to the Commission on Access to Basic Banking 

Services, 2010/2278(INI), 4 July 2012, p. 4. 

399  Rapport Inclusion Financière 2011, Réseau Financement Alternatif, 2011, p.17. 

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laundering legislation;400 this is supported by evidence from users' representatives who have 
pointed out that banks often use anti-money laundering rules abusively to reject applications 
from  unattractive  consumers.401  However,  an  analysis  of  EU  and  national  anti-money 
laundering rules has established that the rules themselves do not create any such barrier.402 

1.2.6.  Low consumer confidence in the financial system 

A general mistrust of banks may be another reason for self-exclusion. A 2010 study reported 
that unbanked people perceive "banks to be intimidating and untrustworthy, interested only in 
making money out of people."403 This negative image of the financial industry does not help in 
attracting unbanked consumers who could benefit substantially from a basic payment account 
provided at low cost. It is also a missed business opportunity for credit institutions that could 
increase  the  number  of  customers  interested  in  other  banking  services  and  products.  Some 
vulnerable consumers may fear opening an account. For example, even if having an account 
may  reduce  the  cost  associated  to  the  payment  of  certain  services  (e.g.  utilities  bills,  online 
shopping), some consumers may refrain from opening because of the risk that, if in debt, their 
balance will be seized. On the other hand, there are examples of measures taken by Member 
States which protect a minimum account balance from being seized by creditors. For instance, 
Germany  introduced  a  so-called  P-Konto  for  over-indebted  consumers  which  protect  a 
minimum  income  of  around  EUR  950.404  However,  it  has  been  demonstrated  by  consumer 
organisations that this account is actually three times more expensive than a regular payment 
account and often does not offer a debit card.405 
Access to banking services may however also have positive psychological effects. According 
to a 2010 study, "almost one in three (31%) of the unbanked who aspire to becoming banked 
feel it would give them more independence, a quarter think being banked would make them 
feel  ‘more  like  everyone  else’  and  16%  think  they  would  feel  more  confident  if  they  had  a 
bank account."406 

1.2.7.  Discriminatory rules on basic payment services 

The different characteristics of a basic payment account in different Member States restricting 
the  use  of  basic  payment  accounts  to  national  level  (e.g.  in  the  Netherlands,  Hungary, 
Belgium) create a barrier to the internal market. Consequently, consumers with basic accounts 
can  only  engage  in  domestic  transactions.  For  mobile  consumers  and  vulnerable  consumers 
living in border areas, this represents a significant problem.  
Domestic  enterprises  providing  goods  and  services  in  those  Member  States  that  have 
implemented  the  Recommendation  benefit  from  a  larger  market  size  and  reduced  costs,  as 
consumers  have  easy  access  to  and  more  often  use  electronic  payments.  However,  the 
European  market  as  a  whole  may  be  unable  to  benefit  due  to  restrictions  on  the  account 
services that limit users of the basic payment account to 'domestic' transactions. 

400  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 
for Strategy and Evaluation Services (CSES), July 2010, p. 44-45, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  

401  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 13. 
402  See Section 3.1 for further information. 
403  Financial Inclusion Evidence Review: the costs of banking exclusion and the benefits of access to bank accounts, Claire 

Whyley, 2010, p. 32. 

404  Strategy for Financial Inclusion, Steering Group on Financial Inclusion, Irish Department of Finance, June 2011, p. 56, 

http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf  
Ibid. 

405 
406  Realising banking inclusion: the achievements and challenges, Financial Inclusion Taskforce, August 2010, p. 54 

(http://www.hm-treasury.gov.uk/d/realising_banking_inclusion_report.pdf). 

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Vulnerable  consumers,  who  have  no  financial  history  or  'track  record'  due  to  their  state  of 
financial exclusion (e.g. the homeless), may face similar problems albeit on the lesser scale, 
although no less important in terms of the consequences. In social terms, therefore, even those 
excluded consumers who are making an effort to reintegrate themselves in society may face 
difficulties in doing so in financial terms. 
In order to mitigate the risks, more burdensome procedures need to be in place in the credit 
institution so that identity/creditworthiness is verified and additional transaction costs may be 
incurred, such as accessing a credit register in another Member State. The resulting costs may 
render the potential foreign client less profitable and thus lead to rejection. 

2. 

CONSEQUENCES 

2.1. 

Consequences for consumers 

2.1.1.  Limited product choice and economic exclusion 

Online  shopping  offers  an  extensive  choice  and  usually  lower  prices.  However,  consumers 
without  a  payment  account  have  limited  opportunities  to  make  use  of  e-commerce.  "This  is 
sometimes referred to as the “poverty premium”, i.e. the higher price poorer families have to 
pay for goods and services because they cannot access the online deals that are available to 
households with payment means accepted for e-commerce."407 There are also some services 
which  are  almost  exclusively  available  over  the  internet.  Consequently,  an  unbanked 
consumer would struggle to access them. For instance, it is difficult to buy airline tickets from 
low cost air carriers without a credit card or without the ability to make a bank transfer. Even 
if these tickets can be purchased at a travel agency, they are more expensive due to additional 
charges imposed. This follows the trends of non-European developed economies, such as US: 
"as  of  June  2009,  certain  American  airlines  (e.g.  American  Airlines)  only  accept  payment 
card payments for domestic flights."408 
Furthermore,  there  is  scope  for  further  growth  of  e-commerce,  also  in  the  cross-border 
dimension, which is considered crucial for the development of the Single Market. This can be 
achieved by opening up access to banking services as "[...] the availability of payment cards 
and  electronic  money  transfer  channels  are  crucial  factors  underpinning  e-commerce, 
particularly  as  they  offer  to  the  consumer  protection  and  credibility."409  Although  it  may 
appear  unlikely  that  poor  consumers,  even  if  equipped  with  a  payment  account,  would 
massively turn to online shopping, one study which examined the experience of newly banked 
consumers in the UK found that 22% had shopped by telephone or online since opening their 
account.410  "Moreover,  paying  for  goods  and  services  on  the  internet  using  international 
credit cards may entail certain additional benefits for consumers, e.g. insurance services."411 
Although credit cards or bank transfers are frequently used over the internet, there are other 
ways  to  pay  for  a  product.  However,  these  are  usually  more  expensive  and  inconvenient.412 
For instance, pre-paid cards can be used for non-cash payments over the internet but the fee 
structure  behind  them  is  not  very  transparent  and  in  addition,  access  channels  for  payments 

407  Basic banking services, by London Economics for European Parliament's Committee on the Internal Market and 

Consumer Protection, November 2011, p. 19. 

408  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary, 

p. 117. 
Ibid., p. 27. 
Ibid., p. 27. 

409 
410 
411  Cost of payments in Denmark, Denmark's National Bank, November 2011, p. 76. 
412  Banking services and poorer households, UK Financial Services Taskforce, December 2010, p.8-9 http://www.hm-

treasury.gov.uk/d/fin_inclusion_taskforce_poorerhouseholds_dec2010.pdf. 

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into and out of the card account are limited.413 What is even more important is that they are 
not as safe as a payment account – once a pre-paid card is lost, the consumer will not be able 
to recover the balance. 
However, a precondition for e-commerce growth is the improved access of citizens to online 
shopping,  the  levels  of  which  differ  substantially  across  the  EU  Member  States.  Only  once 
widespread internet access, especially in new Member States, e.g. Bulgaria and Romania, is 
ensured, will consumers in these countries find it useful to use electronic means of payment.  
In  conclusion,  restrictions  in  accessing  payment  accounts  can  restrict  consumer  choice  and 
cross-border activity. 

2.1.2.  Higher costs 

Access to basic financial services is a pre-condition to benefiting from the internal market and 
fully  participating  in  the  modern  economy.  The  security  and  convenience  associated  to 
electronic payments is also generally higher than for cash transactions. It also enables access 
to discounts, e.g. those offered by utilities companies when payments are done by direct debit 
or those provided through having a bundle of products or services with the same provider. For 
consumers,  cash/cheque  payments  of  social  benefits  imply  wasted  time  (e.g.  queuing  at  the 
post  office),  hassle  and  charges  (e.g.  when  cashing  the  cheque).  In  Germany,  the  Federal 
Employment Agency pays the majority of unemployment benefits to the recipients' payment 
accounts. Nevertheless, beneficiaries without a payment account receive them by cheque (so 
called  ZzV  transaction).414  An  average  amount  of  the  ZzV  benefit  in  2010  was  EUR  380 
which  means  that  the  recipient  was  charged  EUR  7  (EUR  2  basic  charge  plus  EUR  5 
additional  fee)  for  the  processing  of  the  payment  which  gives  an  average  of  EUR  85  per 
recipient per year.415 It has been calculated that in 2010 almost EUR 13 million was spent by 
recipients of unemployment benefits on fees charged upon the receipt of the ZzV payments. 
In  the  UK,  a  report  also  concluded  that  in  total  unbanked  families  pay  some  £253  per  year 
more in gas and electricity bills compared to families that pay by direct debit.416 There is also 
an important issue of security for those who have to cash their benefits upon receipt, without a 
possibility of keeping them in a payment account. Many benefit recipients are vulnerable in 
some regard and experience an elevated risk of theft.  
An additional burden for unbanked consumers may be the amount limit for cash transactions 
introduced for instance in Spain or France (up to EUR 3000),417 or in Italy, an obligation to 
pay social benefits solely via a payment account. Even though these measures were taken by 
the governments with the aim to prevent fraud and money laundering, in reality they make it 
impossible for unbanked consumers to access certain products and services. 

2.1.3.  Difficulties in accessing accommodation and/or employment 

Consumers  may  face  difficulties  in  relation  to  employment  or  renting  property  without  a 
payment  account.  At  some  German  universities  rent  for  student  halls  is  paid  by  standing 
order.418 Regarding employment, having a payment account may not be a legal requirement to 

Ibid. 

413 
414  Bericht der Bundesregierung zur Umsetzung der Empfehlungen des Zentralen Kreditausschusses zum Girokonto für 

jedermann, Drucksache 17/8312, German Bundestag, 27.12.2011, p. 8. 
Ibid. 

415 
416  The UK poverty rip-off, Save the children UK, January 2011. P.6 

http://www.savethechildren.org.uk/sites/default/files/docs/UK_Poverty_Rip_Off_Brief_1.pdf  

417  Strategy for Financial Inclusion, Steering Group on Financial Inclusion, Irish Department of Finance, June 2011, p. 47, 

http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf  

418  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 
for Strategy and Evaluation Services (CSES), July 2010, p. 44-45, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study. 

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take up a position. However, in some cases, "paying out salaries in cash or by cheque may 
simply  no  longer  be  possible".419  A  2010  study  reported  that  "having  an  account  was 
perceived to be a necessity for securing employment among the unbanked."420 Limited access 
to payment accounts is a serious burden for migrant workers and students coming from other 
EU Member States  and  poses  a  barrier  to free  movement  of  persons  in  the  Union.  Workers 
will find it more difficult to find a job if the employer cannot pay their salary into a payment 
account  and  instead  has  to  issue  a  cheque  or  provide  cash.  This  is  not  a  common  practice 
anymore and therefore may create administrative costs for the employer and he may simply 
refuse to hire a person without a payment account. It is no surprise that some migrant workers 
refrain  from  travelling  and  looking  for  a  job  abroad  once  they  are  aware  of  these  potential 
obstacles. 

2.2. 

Financial services industry 

Restrictions on consumers' ability to access a payment account also impacts on the financial 
services  industry.  First,  the  use  of  cash  is  expensive.  Financial  services  providers  therefore 
strongly encourage their clients to use electronic means of payment. With a higher number of 
banked consumers, providers could substantially reduce costs. According to a Finnish report, 
"cash was uniformly unprofitable payment instrument for banks. Banks are of course aware 
of this and they have favoured electronic means of payment instead of cash [...] The usage of 
cash  has  been  reducing  in  domestic  payments  […]".421  Similarly,  in  Demark,  banks'  costs 
related to payment services totalled almost kr. 4.4 billion in 2009, with about half the costs 
attributable to cash.422 "Cash handling is more labour-intensive than other payment services, 
which is the reason for the banks' considerable costs related to cash".423 "A comparison of the 
banks' costs per transaction shows that payment services which require a lot of working time 
entail the greatest costs. This applies first and foremost to deposits and withdrawals of cash 
at branch counters and deposits via night safes. Conversely, the costs of cash withdrawals at 
ATMs,  card  payments,  online  banking  transfers  and  Betalingsservice  transactions  are 
relatively  low.  This  is  because  these  services  involve  a  high  degree  of  automation  and  the 
fixed  costs  are  distributed  on  a  large  number  of  transactions."424  The  financial  services 
industry would therefore clearly benefit from greater access of users to payment accounts and 
more  broadly  to  basic  payment  services,  which  would  lead  to  a  greater  number  of  cash 
transactions being replaced by electronic payments. Nevertheless, cash should not be phased 
out completely since there are many vulnerable consumers, for instance, the elderly who find 
it  very  difficult  to  use  electronic  means  of  payment.  This  is  also  the  reason  why  providers 
charge consumers much higher fees for cash transactions.  
Second, new market entrants, in particular those from another Member State, are restricted in 
their ability to enter new markets. Different regulatory frameworks established along national 
boundaries contribute to the fragmentation of the market and raise barriers to entry. 
The different regulatory frameworks for access and switching to payment accounts also create 
a significant barrier to cross-border entry. 

Ibid., p. 44.  

419 
420  Financial Inclusion Evidence Review: the costs of banking exclusion and the benefits of access to bank accounts, Claire 

Whyley, 2010, p. 22. 

421  Costs of retail payment instruments for Finnish banks, Bank of Finland, 23 December 2011, p. 5. 
422  Cost of payments in Denmark, Denmark's National Bank, November 2011, p. 9. 
423 
424 

Ibid., pp. 9-10. 
Ibid., p. 29. 

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2.3. 

Enterprises 

Restrictions  on  consumers'  ability  to  access  a  payment  account  also  impacts  on  enterprises. 
First, consumers who are unable to access and those who have only limited payment functions 
face barriers in being able to purchase goods and services, particularly online. For enterprises, 
a potential market for goods and services is lost. For online sales, this means a substantially 
reduced  market  size.  For  direct  distribution  channels  which  accept  cash,  enterprises  may 
increase  their  prices  but  this  also  restricts  their  competitiveness  and  growth  prospects. 
Moreover, some consumers who may wish to purchase goods or services may be unable to do 
so because they do not have sufficient cash available at that moment. Second, restrictions in 
accessing payment accounts can increase the cost of payment transactions for both businesses. 
Not only do they have to insure the cash held in their company and spend time depositing and 
collecting  cash  from  a  bank  as  a  result  of  cash transactions,  but  they  also  face  an  increased 
risk  of  fraud  through  money  laundering,  fake  notes  and  coins,  etc.  High  cost  of  cash  is 
particularly burdensome for retailers, for instance in Denmark, retailers cost of cash payments 
at  point  of  sale  totalled  just  under  kr.  2.4  billion  and  approximately  kr.  1.6  billion  for  the 
payments by cards in 2009.425 Further, "more than half of the costs of cash payments related 
to  the  time  spent  on  internal  procedures.  This  covers  e.g.  cashing  up  and  counting  and 
packaging  of  cash.  Another  significant  cost  of  cash  payments  was  the  payroll  costs  for 
cashiers  for  the  time  spent  on  executing  a  payment."426  Therefore,  retailers  tend  to  prefer 
electronic  means  of  payment,  which  are  cheaper  than  cash,  even  if  surcharges  for  each 
transaction are imposed by providers. Finally, it can also be a significant administrative and 
security cost for enterprises that have to pay salaries in cash or by cheque. 

2.4. 

Public administrations and society as a whole 

The lack of a payment account also implies higher costs for public administrations, e.g. when 
paying  wages  or  benefits.  In  a  number  of  countries,  the  payment  of  social  benefits  into  a 
payment account has been made compulsory (e.g. in Denmark and France) or payment in cash 
are charged extra (e.g. in Germany). In those countries, account penetration is closer to 100%.  
However, in others, such as Ireland, only 40% of social benefits payments are made through a 
payment account, while another 52% by a post office.427 The Strategy for Financial Inclusion 
prepared for the Irish government in 2011 quotes a 2007 survey of the members of the Irish 
Payment  Services  Organisation  which  estimated  "that  the  use  of  non-electronic  payments 
systems  costs  the  economy  approximately  €1  billion  each  year ."428  Therefore,  "a  shift  to 
electronic  payments  should  therefore  yield  significant  benefits  in  GNP  terms,  given  that 
electronic payments cost a mere fraction of the cost of cash payments."429 For the economy at 
large, the cost can likewise be non-negligible, considering that social protection expenditure 
of Member States represents around 30% of the EU GDP.430 A report on financial inclusion 
prepared by the German Bundestag confirmed high administrative costs incurred as result of 
payments  of  benefits  made  through  non-electronic  means  by  the  governmental  agencies.431 
Even though, in a great majority of cases it is for the beneficiary to cover the transaction cost, 
nevertheless, the costs of child benefits paid by the Federal Employment Agency are actually 

425  Cost of payments in Denmark, Denmark's National Bank, November 2011, p. 11. 
426 
427  Strategy for Financial Inclusion, Steering Group on Financial Inclusion, Irish Department of Finance, June 2011, p. 14, 

Ibid. 

http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf  
428 
Ibid., p. 18.  
429  Ibid., p. 11. 
430  Data for 2009 on the basis of the latest available Eurostat statistics. 
431  Bericht der Bundesregierung zur Umsetzung der Empfehlungen des Zentralen Kreditausschusses zum Girokonto für 

jedermann, Drucksache 17/8312, German Bundestag, 27.12.2011, p. 7. 

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incurred  by  the  taxpayers.  In  Hungary,  approximately  50%  of  pensions  are  paid  by  money 
orders  and  not  by  credit  transfer.  If  this  could  be  done  by  transfers,  society  could  save 
approximately HUF 6.5 billion annually.432 The complete phasing out of paper-based orders 
could  produce  savings  of  approximately  HUF  85  billion  annually  for  Hungarian  society.433 
The  report  concludes  by  stating:  "Electronic  payments  result  in  social  benefits  through 
security,  ease  of  use,  convenience  and  time  savings  and  improve  social  welfare.  Electronic 
payments also allow banks to consume less resources."434 The cuts which can be achieved by 
a  more  widespread  use  of  electronic  means  of  payment,  instead  of  cash,  would  be  very 
beneficial for public finances in Member States, especially in the current economic climate, 
and could further contribute to economic growth in the EU. Data from outside the EU shows 
that important savings could be  achieved.  For  example,  mailing Federal benefits cheques in 
2010  cost  the  US  taxpayer  more  than  $117  million  that  would  not  have  been  incurred  had 
those  payments  been  made  by  electronically.435  Disbursing  grants  and  funds  electronically 
through  newly  established  payment  accounts  helped  reduce  the  administrative  costs  of 
Brazil’s  conditional  cash  transfer  program  Bolsa  Familia  from  14.7%  to  2.6%  of  the 
disbursed grant value.436 
Finally,  encouraging  electronic  transactions  will  support  efforts  to  fight  corruption  and  the 
black  economy  since  transactions  in  cash  are  practically  untraceable.  Access  of  a  larger 
number  of  citizens  to  the  means  of  electronic  payments  is  a  natural  complement  to  the 
measures against fraud which a number of Member States are currently trying to improve, e.g. 
Italy  which  recently  introduced  a  legal  obligation  for  consumers  to  hold  a  bank  account.437 
Further, improved access will allow Member States to better tackle the problem of tax evasion 
(e.g. Greece and Italy) thus contributing to healthier public finances and economic growth. 

2.5. 

Summary of problems and consequences 

Table 2.B: Problems and consequences 

Problems 

Consequences 

Ineffective, inconsistent or non-existent regulatory 
framework 
Limited bank profitability from certain groups of consumers 
Limited and more costly access to basic financial products 
and services 
Low awareness of availability of basic payment accounts 
Discriminatory rules on accessing payment accounts 
Low consumer confidence in the financial system 
Discriminatory rules on basic payment services 

Restricted cross-border activity 
=> characteristics and process of basic payment accounts restrict 
consumer cross-border activity 
=> increase costs for credit institutions 
=> Limits market size for enterprises 
Restricted product choice 
=> reduced product choice for financial and non-financial products and 
services 
=> higher prices for financial and non-financial products and services 
High administrative burden for public authorities 
Low consumer confidence 
=> Economic exclusion (e.g. unable to take advantage of competition 
domestically or in the single market) 
=> Social exclusion (e.g. problems in accessing accommodation) 

3. 

OBJECTIVES 

In general, and in line with the Treaty, the objective is to create an efficient and competitive 
Single Market (Article 114.1 of the Treaty) with a high level of consumer protection (Article 

432  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary, 

p. 94. 
433  Ibid., p. 94. 
434  Ibid., p. 108. 
435  http://www.fms.treas.gov/eft/regulations/31cfr208_text.html   
436  We Must Do Better Than Cash. USAID Impact Blog, 2012. http://blog.usaid.gov/2012/02/we-must-do-better-than-cash/  
437  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 28 

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114.3 of the Treaty) that fosters balanced economic growth with greater social inclusion by: 
enhancing consumer confidence; broadening consumer choice both in terms of the quality of 
the  products  available  and  in  terms  of  price  reductions;  facilitating  customer  mobility; 
facilitating  the  cross-border  activity  of  payment  account  providers;  and  ensuring  a  level 
playing field between market actors. 
In relation to access to basic account services, the specific objective is to facilitate access to 
basic  account  services.  The  operational  objectives  are  to:  reduce  the  number  of  unbanked 
Europeans  by  6.4  million  by  2020;438  ensure  access  to  all  basic  payment  means  for  all 
consumers  with  basic  payment  accounts;  facilitate  cross-border  access  to  basic  banking 
services  for  3.5  million  consumers  by  2020;439  and  improve  consumers'  awareness  on  basic 
payment accounts. 

4. 

DESCRIPTION OF THE OPTIONS FOR POLICY INSTRUMENTS 

Each  of  the  above  options  could  be  given  effect  through  a  variety  of  different  policy 
instruments.  These  include  an  industry  self-regulation  (Code  of  Conduct),  Community  level 
non-binding  measures  such  as  a  Recommendation  or  Communication,  or  through  binding 
Community measures such as Community legislation in the form of a Regulation or Directive. 
In  the  case  of  the  latter,  delegated  acts  or  regulatory  technical  standards  could  also 
theoretically  be  envisaged  for  certain  aspects.  Table  2.C  explores  the  feasibility  of  giving 
effect to each of our policy options through each of the available policy instruments. 

Table 2.C: Policy options versus instruments 

Self-
regulation 

Recommendation 

Communication 

Directive 

Regulation 

1. No action 
2. Ensure application of the provisions of the 
Recommendation 
3. Modify the provisions of the Recommendation 
relative to the beneficiaries 
3(A) Introduce a universal right to a basic payment 
account 
3(B) Introduce a right to a basic payment account at 
least for national residents 
3(C) Introduce a right to a basic payment account at 
least to those non-residents with a link to the country 
where they wish to open an account  
4. Improve the features of the basic payment account 
4(A) Enlarge the list of basic services to include 
internet banking and online purchasing 
4(B) Enlarge the list of basic services to include a 
small overdraft or a 'buffer' facility 
4(C) Oblige Member States to have in their 
legislation an indication of a minimum account 
balance that cannot be seized 
4(D): Ensure that the features of the payment account 
are not of a discriminatory nature. 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

A Commission Communication would be unable to achieve any of the objectives as it is a tool 
to communicate information to the Member States rather than effect a particular change in the 
way things are done. The following sections will assess the impact of the policy options and 
will describe which policy instrument is the most appropriate to use, as well as the underlying 
reasons for the choice. 

438  EU 2020 strategy aims to reduce a number of poor and socially excluded by at least 20 million by 2020 through, among 

others, improved access to essential services and tackling financial exclusion. 
http://ec.europa.eu/social/main.jsp?catId=751&langId=en  
Ibid. 

439 

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5. 

ANALYSIS OF THE OPTIONS FOR ACCESS TO BASIC ACCOUNT SERVICES 

5.1. 

Option 1: No action 

Effectiveness of policy option 
Certain trends should be considered when appraising 'no action' as an option. Some mitigate, 
and others exacerbate the consequences of having many unbanked citizens. 
First, there are plans in a number of Member States to introduce legislation or self-regulation 
to  encourage  the  implementation  of  the  Commission  Recommendation.  The  current  state  of 
implementation of the Recommendation is presented in Table 2.A. Regarding self-regulation, 
users'  representatives  argue  against  soft  law  because,  contrary  to  the  view  of  the  financial 
services industry, they considered it ineffective to combat financial exclusion.440 Even if this 
partial  implementation  continues,  it  would  not  lead  to  a  greater  convergence  of  the  rules 
across the EU and would be unlikely to increase the number of consumers opening payment 
accounts.441  It  is  also  unlikely  that  diverse  national  solutions  will  ensure  greater  access  to 
basic  payment  means,  i.e.  allowing  online  purchases.  Even  if  Member  States  have  legal  or 
self-regulatory rules on access, they actually exclude the possibility for consumers to buy over 
the  internet  since  it  is  costly  for  banks  Further,  varied  national  rules  on  access  do  not  help 
consumers  to  make  use  of  basic  payment  accounts  cross-border  because  consumers  have 
difficulties  to  understand  what  legal  regime  in  terms  of  access  to  a  basic  payment  account 
they  can  expect  in  another  Member  State.  Likewise,  providers  will  be  discouraged  from 
offering cross-border services: they will face high costs in adapting to different national legal 
systems and accordingly find it difficult to compete in national markets. 
Second, the development of alternative means of payment which may have some features of 
payment accounts are relevant, since they could act as substitutes to basic payment accounts 
though only to some extent, thus limiting both the problems and the consequences described. 
These new trends are costly but may solve some of the problems of unbanked consumers such 
as access to online shopping or could very much reduce consumers' reliance on cash.  
The  most  common  pre-paid  cards  would  not  allow  their  holder  to  transfer  money  or  to  pay 
bills  via  direct  debit  or  a  permanent  order.  Receiving  money  via  a  bank  transfer  may  not 
always be possible. The maximum amount that pre-paid cards can hold is usually limited to 
ca.  EUR  500  -  1000.  Such  cards  can  be  a  more  costly  solution  because  of  the  top-up  and 
usage fees applied.  
Impacts of policy option on stakeholders and efficiency 
In  the  absence  of  EU  action,  the  consequences  for  consumers  in  Section  2.1  will  persist. 
Some, such as the difficulties encountered when trying to rent a property or finding a job, are 
difficult to quantify. Others, such as the impact on consumers' self-esteem of being financially 
excluded, are impossible to calculate. Likewise, too many assumptions are required to be able 
to  calculate  the  costs  associated  with  the  extra  time,  hassle  and  insecurity  associated  with 
payments in cash to render any calculation meaningful. 
 It  is  possibly  to  quantify  some  costs.  Consumers  who  have  no  access  to  a  basic  payment 
account  cannot  utilise  cheaper  means  of  electronic  payment  or  make  good-value  internet 
purchases. They also find it more expensive to travel to other Member States where, without 
the right of access to a basic payment account, they use non-bank transfers of funds. Further, 
if  they  rely  on  cash,  they  face  the  cost  and  hassle  of  currency  exchange  and  may  put  their 
personal  security at  risk. The costs extend further. In 2010, being paid by means other than 

440  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 15. 
441  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 22. 

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bank transfer, cost benefit recipients a bit more than €11 million in Germany.442 On the basis 
of UK Treasury data, it has been calculated that unbanked households could pay as much as 
£587 million per year only to cash benefit cheques.443 
Limited access has quantifiable disadvantages for wider society. The cost of cash payments is 
estimated to be between EUR 50bn and EUR 75bn per year.444 The costs of cash for society 
would amount to half a GDP point for countries such as Austria, the Netherlands or Belgium. 
The  cost  is  higher  in  more  cash-oriented  Member  States  (e.g.  Bulgaria,  Romania,  Greece, 
Italy or Spain) and lower in Member States, such as Sweden or Finland, where card usage is 
higher.445  Although  those  estimated  costs  refer  to  the  use  of  cash  in  general  (not  only  as  a 
result of those who do not hold an account), it shows that important savings can be reaped if a 
higher portion of consumers can access electronic payments for goods and services. 
Reduced use of cash would benefit providers, since cash operations are expensive for them. 
Conversely,  providers  would  find  it  costly  to  provide  basic  payment  accounts  cross-border. 
Divergent national rules and requirements as well as a non-level playing field would require 
considerable  investment  to  adjust  to  new  markets.  This  would  be  disproportionate  to  any 
potential profit. 
Public  administrations  (and  therefore  taxpayers)  are  also  incurring  in  costs  that  could  be 
avoided if social benefits were automatically paid into a payment account and therefore many 
national public authorities consider it essential to grant the right of access to basic payment 
accounts to all consumers.446 The administrative and financial costs of issuing a cheque and of 
distributing it are not negligible. In the fiscal year 2010, the US Treasury spent $117 million 
only in mailing Federal benefit cheque to benefit recipients (some 11 million people).447 This 
data cannot be extrapolated to the EU case but in certain Member States the cost can also be 
significant. In Belgium, paying pensions by cheque is the default option. In Ireland, only 40% 
of  the  social  welfare  payments  are  made  through  an  account  (compared  to  52%  of  them 
through  the  Post  Office  and  8%  by  cheque).448  In  the  UK,  the  Government  has  recently 
decided to phase out the payment of benefits by cheque. It has also been reported of giving 
"the  £20  million-a  year  contract  for  payment  to  Citibank,  which  runs  the  PayPoint  system, 
instead  of  the  Post  Office".449  Thus,  although  currently  less  than  1%  of  the  UK  total 
population receive their state pension or benefits by cheque in the UK, it has been considered 
worthwhile to pay £20 million annually for an alternative system instead of continuing paying 
benefits by cheque. 

442  Bericht der Bundesregierung zur Umsetzung der Empfehlungen des Zentralen Kreditausschusses zum Girokonto für 

jedermann, Drucksache 17/8312, German Bundestag, 27.12.2011 

443  According to a December 2010 HM Treasury statistical release (http://www.hm-

treasury.gov.uk/d/stats_briefing_101210.pdf) 1 020 000 unbanked households received at least one benefit. The cost of 
cashing a cheque of £200 has been reported to be £12 at Cash Converters 
(http://www.savethechildren.org.uk/sites/default/files/docs/UK_Poverty_Rip_Off_Brief_1.pdf) If a household receives 4 
cheques a month (weekly benefits), cost= £12*1 020 000*12*4= £587,520,000/year. Assumptions: 1) all unbanked 
households receive their benefits by cheque and cash it at Cash Converters; 2) The cost of cashing a cheque of a 
different value (i.e. more or less than £200) is still £12.  
444  European Payments Council Newsletter, October 2010, 

http://www.europeanpaymentscouncil.eu/pdf/EPC_Article_45.pdf  
Ibid.  

445 
446  Summary of responses to the public consultation on access to a basic payment account, 25.01.2011, p. 3, 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary-2010_en.pdf  

447  http://www.fms.treas.gov/eft/regulations/31cfr208_text.htm  
448  Strategy for Financial Inclusion, Steering Group on Financial Inclusion, Irish Department of Finance, June 2011, p. 19 

(http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf)  

449  http://www.dailymail.co.uk/news/article-2136439/Now-elderly-told-collect-pension-local-shops-Giro-cheques-set-

scrapped.html  

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The  administrative  cost  of  enterprises  could  also  be  reduced.  For  instance,  in  Belgium,  a 
telecom company recently offered a 20% reduction on the monthly mobile phone subscription 
and another a monthly EUR 1 rebate for cable TV services paid by direct debit.450 According 
to a UK report, poor families are paying some £253 per year extra in gas and electricity bills 
compared  to  families  that  pay  by  direct  debit.451  This  implies  overall  annual  cost  of  £288 
million for the society (on the basis of the above mentioned UK Treasury data).452 

5.2. 

Option 2: Ensure application of the provisions of the Recommendation 

Effectiveness of policy option 
Implementation  and  application  of  the  Recommendation  by  Member  States  so  far  has  been 
unsatisfactory  (See  paragraph  1.2.1).453  Many  Member  States  took  insufficient  measures  to 
ensure  the  right  of  access  to  basic  payment  accounts  for  consumers  despite  the  deadline 
imposed by the Recommendation, and consumers associations do not expect that this situation 
can improve.454 
This option should result in easier access to basic payment accounts for consumers, especially 
in  the  countries  (e.g.  Austria,  Bulgaria,  Czech  Republic,  Greece,  Latvia,  Malta,  Poland, 
Romania,  Slovenia,  Sweden,  Slovakia,  and  Spain)  where  barriers  to  accessing  a  basic 
payment account at reasonable cost exist. This option would permit consumers to open a basic 
payment account with all the features foreseen in the Recommendation regardless of whether 
the  consumer  is  a  resident  in  the  country  of  application  or  not.  In  addition,  Member  States' 
launch public campaigns on access, as required under the Recommendation and supported by 
the  European  Parliament,  would  improve  public  awareness  on  access.455  This  would  attract 
unbanked  and  cross-border  consumers.  In  Romania  and  Bulgaria,  where  no  framework  for 
access to basic payment accounts exists and more than half of the population does not have a 
payment account, the positive effects should be large.  
This option would have a positive impact on customers' mobility and confidence, particularly 
for  citizens  travelling  abroad  for  work  or  study.  Consumers  would  find  it  easier  to  open  a 
payment  account  in  another  Member  State  because  similar  principles  would  apply  when 
opening an account in every Member State.  
The limits of basic payment accounts, as defined by the Recommendation, and the consequent 
shortcomings, would remain. Unless Member States went further than the Recommendation, 
consumers  would  enjoy  a  right  to  a  basic  payment  account  only  if  they  were  otherwise 
unbanked  in  that  country.  The  limited  features  of  the  account  would  not  facilitate  internet 
banking or online shopping, for example.  
These  limits  would  continue  to  prevent  the  consumer  from  making  use  of  online  shopping 
with more choice and lower prices, which is considered essential by the European Parliament 
for  consumers  to  be  able  to  reap  the  benefits  of  e-commerce.456  Thus,  the  problem  of 
vulnerable  consumers  who  without  the  possibility  to  use  internet  shopping  spend  more  on 
products  and  services  would  persist.  Also,  in  this  way,  a  more  common  access  to  payment 
accounts would not necessarily contribute to further development of e-commerce and thus to 
economic  growth.  At  the  same  time,  this  option  would  help  decrease  the  costs  incurred  by 

450  http://www.numericable.be/news/60/Numericable_tarifs_2012_be.pdf  
451  http://www.savethechildrefen.org.uk/sites/default/files/docs/UK_Poverty_Rip_Off_Brief_1.pdf  
452  Total number of unbanked households is 1 140 000. Cost= £253*1 1400 000= £288 420 000/year. 
453  European Resolution with recommendations to the Commission on access to basic banking services, 2012/2055(INI), 4 

July 2012, p. 5. 

454  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 22. 
455  European Resolution with recommendations to the Commission on access to basic banking services, 2012/2055(INI), 4 

July 2012, p. 10. 
Ibid., p. 4. 

456 

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administrations or companies when making payments, such as transferring benefits or paying 
wages.  
Since  the  Recommendation  provides  minimum  standards,  Member  States  that  implemented 
the Recommendation did so in a non-homogenous way. Depending on the policy instrument 
chosen,  the  Commission's  enhanced  efforts  to  ensure  application  of  the  Recommendation 
would encourage more Member States to implement it, aligning general rules on the right of 
access  in  the  EU  while  leaving  some  flexibility  to  Member  States,  in  recognition  of  market 
differences at national level. Member States could, for instance, set limits for the price of a 
basic  payment  account,  choose  whether  to  designate  selected  (versus  all)  providers  to  offer 
accounts, and decide on the content of public campaigns on access.  
Consequently, consumers travelling abroad would experience slightly different conditions and 
criteria  of  access  –  in  addition  to  different  features  -  to  a  payment  account.  Cross-border 
activity could be restricted through limitations on payment facilities attached to the account, 
i.e. only domestic transactions. Likewise, payment services providers may find it difficult to 
provide basic account services cross-border since they would have to comply with potentially 
different legal or self-regulatory regimes in order to enter the market. Accordingly, although 
this option could reduce the number of unbanked citizens it would not remove the practical 
obstacles the development of an efficient Internal Market. 
This option would have a positive impact on customers' mobility and confidence, particularly 
for  more  mobile  ones  such  as  those  travelling  abroad  for  work  or  to  study  as  well  as  for 
unbanked citizens who were refused a payment account so far. Consumers would find it easier 
to  open  a  payment  account  in  another  Member  State  because  the  principles  for  the  right  of 
access, based on the Recommendation, would be the same and thus criteria to open a payment 
account  similar  across  the  EU.  What  is  also  very  important  is  that  the  account  would  be 
available free of charge or at reasonable cost, also in terms of fees for services linked to the 
account  in  line  with  the  European  Parliament  recommendations457.  This  option  is  however 
more likely to impact on the vulnerable group of consumers than mobile consumers. The main 
reason  for  this  is  that  this  option  would  foresee  only  an  enforcement  of  the  existing 
Recommendation  and  not  any  improvements  in  the content,  in  particular  in  relation  to  non-
discriminatory  features,  which  are  of  a  greater  importance  to  mobile  consumers  (see  Sub-
section 1.1.6). 
In conclusion, even though this option could reduce the number of unbanked citizens across 
EU  Member  States  through  increased  implementation  of  the  Recommendation,  it  will  not 
remove the practical obstacles that impede the creation of efficient Internal Market, and thus 
impede economic growth. However, the effectiveness of this option would largely depend on 
the  implementing  measure  chosen  to  ensure  application  of  the  Recommendation  (e.g. 
improved  enforcement  of  the  Recommendation  or  new  regulatory  obligation  based  on  the 
Recommendation's provisions). The choice of instrument would thus be critical. 
Impacts of policy option on stakeholders and efficiency 
In  general,  under  this  option,  all  consumers  will  be  able  to  open  a  basic  payment  account 
anywhere in the EU. The figures presented by the World Bank's report demonstrate that there 
are many more unbanked consumers in the EU12 than EU15, and therefore it may be assumed 
that  the  impact  of  any  initiative  targeting  basic  payment  accounts  will  be  greater  in  new 
Member States, especially in those which do comply with the Recommendation.458 

457  European Resolution with recommendations to the Commission on access to basic banking services, 2012/2055(INI), 4 

July 2012, p. 9. 

458  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 50-52. 

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Consumer benefits arise in three ways: more efficient payment instruments, i.e. reduced use 
of  money  transmission  mechanisms  and  fewer  cheques;  discounts  from  using  electronic 
payments, e.g. by establishing a direct debit to pay an electricity bill; and the reduced risk of 
theft or fraud associated with cash payments (see Section 2.4). Consumers may also be able to 
purchase  additional  financial  products,  such  as  home  or  fire  insurance,  further  minimising 
risks and costs. Such costs are however not tangible, as they only exist when the event occurs. 
However, while newly banked consumers may be able to access additional financial and other 
products by using electronic payments, since the features of the basic payment account under 
the Recommendation do not cover facilities necessary for internet shopping, these consumers 
would not be able to pay for them and thus avail of the cheaper goods and services. Access to 
online  shopping  is  considered  to  be  an  essential  feature  of  a  basic  payment  account  by 
consumer  representatives  and  some  public  authorities.459  Consumers  should  also  get  a  clear 
view of the features of a basic payment account because they will all be based on the same 
broad principles of the Recommendation and this will allow them to be more confident to ask 
for a payment account abroad.  
Consumers will face costs in terms of opening and maintaining an account. These should not 
be  excessive:  the  account  should  be  provided  free  or  at  reasonable  cost.  Some  vulnerable 
consumers  will  bear  occasional  and  recurring  costs  for  the  inappropriate  use  of  the  basic 
account, e.g. unpaid overdrafts. In France and the UK, these charges are estimated at between 
EUR 17 and 22 for each failed transaction.460 As a result of these charges and due to the fear 
of  seizure,  as  a  minimum  balance  is  not  protected  against  seizure  by  creditors  under  this 
option, some consumers, especially those who tend to fall in financial difficulties, may still be 
discouraged from opening an account. 
Financial  services  providers  would  also  incur  costs.  They  would  incur  both  one-off  and 
recurring  costs  for  opening  and  running  payment  accounts.  There  might  also  be  an 
administrative cost for providers, since they may face substantial inflow of new clients, many 
of whom will not be very profitable. Providers in countries with fewer unbanked citizens are 
less likely to incur these costs though providers in more developed Member States may notice 
a  growing  number  of  immigrants  from  EU12  asking  for  a  basic  payment  account.  For 
instance, in the UK, there are numerous workers from other EU Member States and many do 
not have a payment account. 
Under this option, mobile consumers will have the right of access to a basic payment account 
but  there  might  be  a  language  issue  between  them  and  the  bank,  which  may  result  in 
additional cost for the provider. These costs could, however, be recovered by banks partly or 
fully, depending on the level of charges imposed on consumers for the use of a basic payment 
account. In practice, the real level of costs is likely to be lower. Second, one-off costs would 
be incurred by providers from paying consumers switching to a basic payment account. The 
introduction of a basic payment account, which can be offered free of charge or at low cost, 
will  result  in  some  consumers  switching  from  their  regular  account  to  a  cheaper  option. 
Finally,  banks  interested  in  providing  account  services  cross-border  would  continue  to  face 
unnecessary barriers and costs as the rules introduced in Member States, although based on 
the  Recommendation's  provisions  would  differ  from  country  to  country.  Financial  services 
providers, entering new markets, would have to meet these specific national requirements and 
therefore their IT systems, operating procedures, and the features of already existing products 

459  Summary of responses to the public consultation on access to a basic payment account, 25.01.2011, p. 10, 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary-2010_en.pdf  

460  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  

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would have to be adapted accordingly. These costs are likely to exceed potential benefits at 
least in the short to medium term and banks may refrain from operating across borders. 
Payment  account  providers  will  also  encounter  benefits.  With  a  legal  right  of  access  to  a 
payment account and public campaigns attracting citizens to open one, many more payments 
will be made through bank transfers. This may result in substantial savings from reduced costs 
of transporting and insuring cash. Providers are also likely to enjoy a larger customer base to 
which they can market other products, e.g. fire insurance; they will be able to reduce costs of 
and  risks  from  cash  based  payments  and  will  benefit  from  a  contribution  to  capital  and 
funding. These benefits are non-quantifiable. 
Companies, in particular utility companies such as energy and water providers, would benefit 
from  reductions  in  transaction  costs  as  many  banked  consumers  would  switch  to  cheaper 
direct debit payments which are a cheaper way of collecting payments. Companies providing 
goods  and  services  online  would,  however,  not  benefit  to  the  same  extent  as  there  is  no 
guarantee of online purchasing facilities. Moreover, international companies may suffer if the 
features  of  the  account  are  limited  to  domestic  transactions.  Companies  would  be  able  to 
benefit  by  paying  salaries  through  accounts  rather  than  through  more  expensive  payment 
instruments such as cheques. 
Member States would experience costs and benefits. The extent of these would depend on the 
instrument  chosen.  Member  States  which  already  implemented  the  Recommendation 
(Belgium, France and Italy) would enjoy fewer benefits.  
Benefits would come in  the form of savings on payments of social security which could be 
made  through  a  bank  transfer.  A  2010  study  estimated  these  savings  at  EUR  7-12  per 
recipient  per annum.461 States  with more  unbanked consumers at present are likely to enjoy 
more savings.  
Member States would incur the cost of organising a public information campaigns to inform 
consumers of the existence of basic payment accounts and their rights to open one. However, 
those  with  fewer  unbanked  citizens  (e.g.  Denmark,  Finland,  Germany,  Sweden,  the 
Netherlands  and  the  UK)  may  be  able  to  limit  costs  by  focusing  on  targeted  groups  of 
consumers.  
Member States' costs incurred as a result of new European measures on the right of access to 
basic  payment  account  will  not  depend  on  the  number  of  unbanked  consumers  in  a  given 
country because administrative costs of introducing a new legislation or aligning the existing 
one  are  likely  to  be  roughly  the  same  regardless  of  the  level  of  account  penetration  in  a 
Member State: administrative costs should not change significantly. They will rather depend 
on  whether  the  Recommendation  has  been  implemented  or  not.  It  can  be  assumed  that  the 
lowest  costs  will  be  incurred  by  the  three  Member  States  which  fully  implemented  the 
Recommendation  (Belgium,  France  and  Italy)  because  they  will  need  to  make  only  minor 
amendments  in  the  existing  legislation.  Member States  which  introduced  legislative  or  self-
regulatory  measures,  however  not  fully  complying  with  the  Recommendation  (Portugal, 
Denmark,  Estonia,  Finland,  Lithuania,  Luxembourg,  Sweden,  Germany,  Hungary,  Ireland, 
Netherlands, and the UK), will have to incur costs to align the existing measures with the new 
EU law. However, the highest cost will have to be borne by the Member States which do not 
have any rules on access in place: Austria, Bulgaria, Czech Republic, Cyprus, Greece, Latvia, 
Malta,  Poland,  Romania,  Slovakia,  Slovenia  and  Spain.  Likewise,  the  additional  costs  of 
monitoring and enforcement will be lower for the Member States where legislation on access 

461  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, p. 51, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  

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already  exists  (Belgium,  France,  Italy,  Denmark,  Finland,  Luxembourg,  Estonia,  Lithuania, 
Sweden), be it fully or partly compliant with the Recommendation, because it can be assumed 
that  these  Member  States  are  already  involved  in  the  monitoring  and  enforcement  of  the 
existing rules. These costs will be higher for Member States with self-regulation or industry 
charters  (Germany,  Hungary,  Ireland,  Portugal,  the  Netherlands  and  UK)  where  monitoring 
and enforcement will have to be enhanced, and even higher in Member States where there are 
no rules on access at all (Austria, Bulgaria, Czech Republic, Cyprus, Greece, Latvia, Malta, 
Poland,  Romania,  Slovakia,  Slovenia  and  Spain)  because  these  Member  States  will  have  to 
designate responsible authorities to monitor and enforce the new law on the right of access. 
The benefits may differ though because the more banked consumers, the more social benefits 
can be paid by public authorities through a bank transfer which is cheaper than other means of 
payment. Therefore, those Member States with currently more unbanked consumers are likely 
to be impacted by more benefits following the introduction of measures on the right of access 
to basic payment accounts. These would be Romania and Bulgaria with the highest unbanked 
populations  in  the  EU,  but  also  Poland,  Hungary,  Lithuania  where  almost  30%  of  citizens 
above the age of 15 do not have a payment account. On the other hand, Member States with a 
very high bank account penetration on the market (e.g. Denmark, Finland, Germany, Sweden, 
the Netherlands, and the UK) will not be impacted by the benefits to a great extent because it 
can be assumed that many consumers have already their social benefits paid to bank accounts 
in these countries.  
Finally,  broader  society  should  benefit  through  economic  development  and  growth  since 
"people  with  access  to  savings  accounts  or  simple  informal  savings  technologies  are  more 
likely to increase productivity and income."462 First, the development of the retail banking in 
less advanced countries is unavoidable in the near future in any case. Even if cash is still the 
only payment  means for  a significant part of the society in Romania and Bulgaria, with the 
rapid  development  of  electronic  means  of  payment  which  are  generally  cheaper  and  safer, 
citizens of these and other EU countries lagging behind will catch up and use banking services 
in a universal and habitual manner in the near future. This will also ensure further economic 
growth  in  the  region  since,  as  demonstrated  in  Chapter  2,  the  use  of  electronic  payments 
facilitates savings for public administrations, the private sector, and for consumers.463 Second, 
there  is  likely  to  be  less  fraud  and  tax  avoidance  since  payment  transactions  would 
increasingly take place through electronic (and traceable) payments channels. 
Quantification of costs and benefits 
Consumers 
Consumers will face costs of between EUR 108 - 542 million in the first year (see Table 2.D). 
These costs will be incurred in those Member States where the Recommendation has not yet 
been  implemented:  Sweden,  Germany,  Hungary,  Ireland,  Austria,  Czech  Republic,  Estonia, 
Greece,  Lithuania,  Luxembourg,  Latvia,  Poland,  Slovakia,  Slovenia,  Spain,  UK,  Cyprus, 
Malta, Romania, Bulgaria, the Netherlands, Finland, Denmark and Portugal. 

Table 2.D: Cost and benefits for consumers (EUR millions) 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, risk of seizure of funds) 
Total costs 

2 million 
consumers 

6.4 million 
consumers 

10 million 
consumers 

91 
18 
Not quantifiable 
108 

290 
57 
Not quantifiable 
347 

453 
89 
Not quantifiable 
542 

462  Measuring Financial Inclusion, The Global Findex Database, World Bank, April 2012, p. 5. 
463  Strategy for Financial Inclusion, Steering Group on Financial Inclusion, Irish Department of Finance, 2011, p. 14 

http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf  

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Benefits 
Benefits from reduced use of money transmission and cheques 
Benefits through discounts for electronic payments 
Benefits through discounts for online purchases 
Other  benefits  (increased  accessibility  of  funds,  reduced  risk  of  theft, 
increased 
of 
accommodation/employment/improved confidence) 
Total benefits 

accessibility 

services, 

choice 

goods 

and 

of 

320 
222 
0 

1 024 
711 
0 

1 600 
1 111 
0 

Not quantifiable 

Not quantifiable 

Not quantifiable 

542 

1 735 

2 711 

In terms of costs, no one-off costs have been identified since the cost of opening a payment 
account  is  included  in  the  annual  maintenance  charge.  All  costs  incurred  by  consumers  are 
recurring costs and can be broken down as follows: 

• 

• 

• 

• 

• 

• 

• 

Annual maintenance charge estimated by the CSES study at EUR 51464; 

Costs  of  inappropriate  use  of  the  account.  Consumers  would  bear  occasional  and 
recurring  costs  of  inappropriate  use  of  the  basic  account,  e.g.  due  to  unpaid 
overdrafts; 

Non-quantifiable costs. These include potential losses from fraud in the event that the 
account details are lost or stolen as well as the risk of possible seizure of funds in the 
event of any court judgment. 

Regarding  benefits  (See  Table  2.D),  the  annual  recurring  benefits  can  be  broken 
down as follows: 

Benefits from discounts from reduced use of money transmission and cheques;  

Benefits from cheaper electronic payments and online purchases; 

Non-quantifiable  benefits  including  being  able  to  access  funds  more  quickly, 
regardless  of  their  geographic  location;  an  increased  sense  of  security;  n  increased 
choice of goods and services (e.g. online shopping); enabling access to employment 
and  accommodation  more  easily;  and  a  reduced  sense  of  financial,  economic  and 
social exclusion.  

Payment services providers 

Payment account providers will face total costs of between EUR 71 - 356 million in the first 
year. These costs will be incurred in those Member States where the Recommendation has not 
yet been implemented.  

Table 2.E: Cost and benefits for providers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training). 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

71 

228 

356 

Not quantifiable 

Not quantifiable 

Not quantifiable 

71 

18 

227 

57 

356 

89 

Not quantifiable 

Not quantifiable 

Not quantifiable 

18 

57 

89 

These costs comprise annual recurring costs and one-off costs: 

• 

Annual recurring costs of opening and operating a payment account; 

464  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, p. 40. http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  

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• 

• 

One  off  costs  for  modifying  IT  systems,  staff  training  and  adapting  internal 
procedures.  Costs  of  these  modifications  will  be  incorporated  into  the  annual  fees 
charged to consumers; over time, the more basic payment accounts that there are, the 
lower the incremental costs465; 

The introduction of a basic payment account, which can be offered free of charge or 
at low cost, will result in a number of consumers willing to switch from their regular 
account  to  a  cheaper  option.  The  one-off  cost  of  this  is  estimated  at  EUR 3  per 
consumer.466  It  is  not  possible  to  quantify  how  many  consumers  would  make  this 
switch. Therefore, the revenue of payment services providers may fall. It is however 
impossible  to  quantify  their  numbers  as  while  concrete  cost  savings  would  be 
available  for  these  consumers,  a  number  may  decide  against  switching  as  the  basic 
account  may  not  have  all  the  services  of  a  "normal"  account.  Consequently,  the 
numbers depend largely on consumer preferences which vary considerably. 

Providers will enjoy benefits of between EUR 18 million and EUR 89 million in the first year. 
These comprise recurring annual benefits and non-quantifiable benefits, such as: an increased 
customer base to which to market other products, e.g. fire insurance; the reduced cost of and 
risks  from  cash  based  payments;  or  the  benefits  from  a  contribution  to  capital  and  funding. 
Since these are however non-quantifiable, the only quantifiable benefits are those indicated in 
the above table.  
Governments 
The costs and benefits will be incurred in those Member States where the Recommendation 
has  not  yet  been  implemented.  (Sweden,  Germany,  Hungary,  Ireland,  Austria,  Czech 
Republic, Estonia, Greece, Lithuania, Luxembourg, Latvia, Poland, Slovakia, Slovenia, Spain, 
UK, Cyprus, Malta, Romania, Bulgaria, the Netherlands, Finland, Denmark, Portugal).  
Member  States  will  face  total  costs  of  approximately  EUR 3 million  in  the  first  year, 
depending  on  the  instrument  chosen.  Member  States  will  face  total  benefits  of  between 
EUR 18 million and EUR 89 million in the first year. The size of these costs will depend on 
the instrument chosen. 

Table 2.F: Cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
One off costs of introducing legislation 
Recurring costs of monitoring and 
supervising application 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (less benefit and tax fraud) 
Total benefits 

1.13 

1.89 

3.02 

1.13 

1.89 

3.02 

1.13 

1.89 

3.02 

18 
Not quantifiable 
18 

57 
Not quantifiable 
57 

89 
Not quantifiable 
89 

Annual recurring benefits for Member States comprise: 

• 

• 

Savings on payments of social security. These could be made through a bank transfer 
instead of more costly means (e.g. cheques). 

Non-quantifiable  benefits,  including  less  fraud  associated  with  paper  systems  and 
less costly local tax collection. 

465  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, p. 52. http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  
Impact assessment accompanying the document Commission Recommendation on access to a basic payment account, 
SEC(2011) 906, p. 41. 

466 

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Enterprises 
Utilities providers will face total benefits of between EUR 32 million and EUR 160 million in 
the first year. Energy and water providers would benefit from reductions in transaction costs. 
Many banked consumers would switch to cheap direct debit payments which for utility firms 
is one of the cheapest ways of collection of payments. Utility firms may lose small amounts of 
revenue,  although  most  likely  not  material,467  through  offering  discounts  to  consumers  who 
pay  electronically.  Those  retailers  that  only  accept  cash  would  also  face  potentially  lost 
business although this is unlikely to be material.468 However retailers that were electronically 
based, not necessarily even in the consumer's home country, would be able to benefit. 

Table 2.G: Total benefits for utility firms from lower transaction costs (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1.5/transaction 

32 

102 

160 

5.3. 

Option  3:  Modify  the  provisions  of  the  Recommendation  relative  to  the 
beneficiaries 

5.3.1.  Variant  A:  Introduce  a  universal  right  to  a  basic  payment  account  (i.e.  Basic 
Payment Account to be offered by all banks and not subject to conditions such as not 
having another account) 

Effectiveness of policy option 
The  effectiveness  of  this  policy  option  would  largely  be  dependent  on  the  degree  of 
application of the provisions of the Recommendation (Option 2). 
This  option  would  result  in  many  requests  for  a  basic  payment  account,  not  only  from 
unbanked consumers but also from those who already have an account; in particular, if such 
an account is free of charge or at reasonable cost. Since all account providers would have to 
provide this service, then consumers' awareness of the availability of a basic payment account 
would  increase.  Universal  access  would  not  only  attract  unbanked  consumers  who  often 
cannot afford a regular payment account but would also attract those who do not need a basic 
account but would find it attractive since it would be free or at low cost. Therefore, this option 
would  be  disproportionate  to  the  objectives  and  would  be  contrary  to  the  Commission 
Recommendation  and  to  the  European  Parliament  report,  as  well  as  to  the  users  view,469 
which  suggest  ensuring  the  right  of  access  to  a  basic  payment  account  only  to  those 
consumers who do not already hold another account in that Member State. Universal access 
would, however, increase the number of basic payment accounts and thus reduce the number 
of unbanked consumers. 
Consumers  would  have  the  right  of  access  to  a  basic  payment  account  based  on  the 
Recommendation's  principles  in  both  national  and  cross-border  contexts.  Consumers 
travelling to another Member State would be able to ask for such an account wherever they 
went which without a universal right would not be possible. Consequently, this option would 
facilitate  both  consumer  mobility  (in  geographic  terms)  and  thus  confidence  in  the  internal 
market,  while  at  the  same  time  increasing  the  confidence  of  financially  excluded  citizens. 
However, consumers with a basic payment account would still have no access to all potential 
payment  means  (e.g.  those  allowing  online  purchasing)  due  to  limited  features  of  a  basic 
payment account under the Recommendation which do not change under this option. 

467  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  
Ibid. 

468 
469  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 15. 

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By  introducing  common  general  rules  on  the  right  of  access  across  the  EU  for  providing  a 
basic  payment  account,  national  legal  fragmentation  would  also  be  mitigated.  It  would 
therefore be easier for the banks to offer cross-border services and enter new markets without 
the  need  for  massive  changes  in  their  internal  structures  and  procedures  (although  some 
modifications may be necessary, for example in terms of product features). Depending on the 
policy  instrument  chosen  and  assuming  that  this  option    would  introduce  common  general 
rules  on  the  right  of  access  across  the  EU  (based  on  the  implementation  of  the 
Recommendation), Member States would still be given the flexibility necessary to recognise 
different  conditions  at  national  level  (e.g.  unequal  degree  of  development  of  the  banking 
sector, varying price levels of banking services in Member States, different banking traditions 
and divergent levels of payment accounts' penetration). Therefore they could, for instance, set 
the  limits  for  the  price  of  a  basic  payment  account  or  decide  on  the  content  and  target  of 
public  campaigns  informing  about  the  availability  of  this  product  (as  foreseen  by  the 
Recommendation).    
Impacts of policy option on stakeholders and efficiency 
The impacts of this policy option would largely be dependent on the degree of application of 
the provisions of the Recommendation (Option 2). In general, the same effects as described 
under Option 2 would apply. 
Additionally,  obliging  all  account  providers  to  offer  a  basic  payment  account  to  any 
consumers, regardless of whether or not they already hold and can afford a regular account, 
would lead to a massive and disproportionate administrative and financial burden for financial 
services  providers.  First,  based  on  the  Recommendation's  provisions,  the  basic  accounts 
would have to be provided free of charge or at a reasonable cost. The example of countries 
where basic payment accounts are offered at reasonable cost has shown that the annual fee for 
an  account  is  much  lower  than  the  costs  for  the  bank  in  maintaining  this  account.  If  basic 
accounts  are  available  at  low  cost  to  everybody,  then  many  consumers,  not  only  unbanked 
ones,  might  be  interested  in  having  one,  which  would  greatly  increase  the  costs  for  banks, 
while  reducing  their  revenue  from  other  accounts.  This  will  result  in  more  consumers 
switching from their regular account to a cheaper option. The cost would not only be incurred 
in terms of the accounts’ subsidies, but also in terms of administrative burden and the number 
of staff necessary to handle  the  expected  high demand for basic payment accounts. Second, 
financial  services  providers  would  incur  one-off  costs  of  opening  and  recurring  costs  for 
running payment accounts. These costs would be greater as the potential number of clients is 
likely to be higher as there would be both unbanked and banked consumers who would open 
accounts.  
However, while account providers would welcome vulnerable, mostly poorer consumers, who 
have been unbanked so far, and who would not be able to buy additional financial products 
that potentially could offset the provision of low-priced basic payment accounts in the short 
term,  they  offer  a  potential  growth  market  in  the  future.  Moreover,  the  universality  of  this 
option  could  lead  to  an  increase  in  multi-banking  by  the  non-excluded  consumers  as  thus  a 
growth  in  the  market  for  other  financial  services products. Account providers will also face 
benefits  through  the  use  of  more  efficient  payments  instruments,  e.g.  bank  transfers.  There 
would also be additional benefits for providers such as the reduced cost of and risks from cash 
based payments or the benefits from a contribution to capital and funding. Finally, providers 
entering new markets would still have to meet these specific national requirements in terms of 
account features but would be aware of the common framework for opening an account and 
therefore  while  they  would  face  some  costs  of  adaptation  in  terms  of  IT  systems,  operating 
procedures  and  the  features  of  existing  products,  these  costs  would  be  minimised  as  some 
elements relating to opening procedures would remain unchanged. 

EN 

133 

   EN 

A  basic  payment  account  available  for  everybody  would  bring  substantial  benefits  to  many 
unbanked consumers. In addition to the effects described under Option 2, this option would 
also  bring  cost  savings  for  consumers  with  payments  accounts  as  some  of  those  who  can 
afford  a  current  account  would  switch  to  a  'cheaper'  basic  payment  account.  However,  the 
number  of  consumers  switching  would  depend  on  the  features  of  a  basic  payment  account. 
Consumers  –  both  vulnerable  and  mobile  –  could  benefit  from  the  universal  access  to  a 
payment  account  within  their  country  of  residence  and  cross-border.  This  would  boost 
consumers'  confidence  and  encourage  geographic  mobility.  However,  they  would  still  bear 
additional  costs  if  shopping  online  because  the  necessary  facilities  (e.g.  a  payment  card) 
would not be a guaranteed feature of a basic payment account. Also, since the current features 
of the basic payment account do not protect a consumer's balance against seizure, consumers 
who  fall  into  debt  may  have  their  balance  seized  by  creditors,  which  may  be  a  costly 
consequence of access. 
Member States would also face costs and benefits although the ultimate size of these impacts 
would  depend  on  the  instrument  chosen.  In  principle,  these  would  be  similar  to  those 
described under Option 2 and dependent on the degree of application of the provisions of the 
Recommendation.  The  key  difference  would  be  that  those  Member  States  that  have  not 
currently foreseen universal access would have to do so. This means that those Member States 
which  select  only  one  or  two  institutions  to  provide  such  accounts  (e.g.  France)  as  well  as 
those  who  already  comply  with  the  Recommendation  (Belgium,  France  and  Italy),  as 
currently foreseen as an option under the Recommendation, would no longer be able to do so 
and would have to change their system. Moreover, all Member States would have to engage in 
public  information  campaigns  to  raise  awareness.  Consequently,  the  universal  access  would 
make the overall costs for public authorities across the EU higher, also in terms of monitoring 
compliance and enforcement. 
Companies  would  also  face  costs  and  benefits  although  the  ultimate  size  of  these  impacts 
would  depend  on  the  instrument  chosen.  In  principle,  these  would  be  similar  to  those 
described under Option 2 and dependent on the degree of application of the provisions of the 
Recommendation. Companies providing goods and services online would however not benefit 
to the same extent from this option as there is no guarantee of online purchasing facilitates, 
which  are  considered  indispensable  by  users470  and  several  public  authorities471.  Moreover, 
international companies, particularly those online, may suffer if the features of the account are 
limited to domestic transactions. 
Quantification of costs and benefits 
The impacts of this policy option would largely be dependent on the degree of application of 
the  provisions  of  the  Recommendation  (Option  2).  In  general,  the  same  impacts  as  those 
described  under  Option  2  would  be  felt  albeit  with  some,  largely  qualitative,  differences 
which are described. As such, the figures provided illustrate the estimated cumulative benefit 
of Option 2 when combined with this policy option. 
Consumers 
Consumers will face total costs of between EUR 122 million and EUR 610 million in the first 
year, provided that there is improved application of the provisions of the Recommendation as 
foreseen under Option 2. Under this Option, the costs would however be closer to the upper 
end  of  the  scale  as  the  reduction  in  the  number  of  unbanked  (at  least  relative  to  Option  2) 
would be expected to be slightly higher. Moreover, given that all Member States would have 
to  introduce  universality,  no  discount  would  be  applied  as  it  is  assumed  that  the  number  of 

470  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p. 16. 
471  2012 Public consultation on bank accounts (see footnote 11), p. 10.  

EN 

134 

   EN 

                                                 
unbanked  would  decline  somewhat  –  although  not  necessarily  by  much  in  those  Member 
States that have to make broader access more feasible. 

Table 2.H: Cost and benefits for consumers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, risk of seizure 
of funds) 
Total costs 
Benefits 
Benefits from reduced use of money transmission 
and cheques 
Benefits through discounts for electronic payments 
Benefits through discounts for online purchases 
Other benefits (increased accessibility of funds, 
reduced risk of theft, increased choice of goods and 
services, accessibility of 
accommodation/employment/improved confidence, 
benefits from switching to a cheaper account) 
Total benefits 

102 
20 

326 
64 

510 
100 

Not quantifiable 

Not quantifiable 

Not quantifiable 

122 

360 

250 
0 

390 

1 152 

800 
0 

610 

1 800 

1 250 
0 

Not quantifiable 

Not quantifiable 

Not quantifiable 

610 

1 952 

3 050 

These  figures  include  both  one-off  costs  and  recurring  costs.  However,  in  practice,  one-off 
costs for unbanked consumers have not been identified since the cost of opening of a payment 
account is included in the first annual fee which the consumer has to pay. All costs incurred 
by  consumers  are  therefore  recurring  costs.  The  recurring  costs  borne  by  consumers  can  be 
broken as follows: 

• 

• 

• 

Annual maintenance charge (which includes start-up charges in the first year); 

Costs of inappropriate use of account; 

Non-quantifiable costs in the form of potential losses from fraud in the event that the 
account details are lost or stolen as well as the risk of possible seizure of funds in the 
event of any court judgment. 

Recurring  annual  benefits  for  consumers  are  estimated  at  between  EUR 610 million  and 
EUR 3050 million  provided  that  there  is  improved  application  of  the  provisions  of  the 
Recommendation as foreseen under Option 2. Under this Option, the benefits would however 
be  closer  to  the  upper  end  of  the  scale  as  the  number  of  unbanked  (at  least  relative  to 
Option 2) would be expected to be slightly higher because of the universality of the access. 
The  one-off  benefits  would  be  for  consumers  who  opt  to  switch  from  a  'normal'  to  a  'basic' 
payment account. These are non-quantifiable. While concrete cost savings would be available 
for  these  consumers,  a  number  may  decide  against  switching  as  the  basic  account  may  not 
have  all  the  services  of  a  'normal'  account.  Consequently,  the  numbers  depend  largely  on 
highly variable consumer preferences. 
The annual recurring benefits can be broken down as follows: 

• 

• 

• 

Benefits from discounts from reduced use of money transmission and cheques; 

Benefits from discounts from electronic payments and online purchases; 

Other non-quantifiable benefits. Consumers would be able to access their funds more 
quickly,  regardless  of  their  geographic  location.  They  would  also  benefit  from  an 
increased sense of security through lower levels of cash transactions, an increase in 
choice of goods and services where electronic payments are obligatory which would 
become available, the ability to access employment and accommodation more easily 
and a reduced sense of financial, economic and social exclusion. 

EN 

135 

   EN 

 
 
 
 
 
 
 
Payment services providers 

Payment  account  providers  will  face 
total  costs  of  between  EUR 80 million  and 
EUR 400 million in the first year provided Option 2 applies. Since all Member States would 
have  to  introduce  universal  access,  no  discount  factor  will  be  applied:  the  number  of 
unbanked  citizens  will  fall  even  in  those  Member  States  that  have  implemented  the 
Recommendation. 

Table 2.I: Cost and benefits for providers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training). 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

These costs consist of: 

80 

256 

400 

Not quantifiable 

Not quantifiable 

Not quantifiable 

80 

20 

256 

64 

400 

100 

Not quantifiable 

Not quantifiable 

Not quantifiable 

20 

64 

100 

• 

• 

Annual recurring costs are account operation costs. 

One-off  costs  arise  from  consumers  switching  to  a  basic  payment  account.  The 
introduction  of  a  basic  payment  account,  which  can  be  offered  free  of  charge  or  at 
low  cost,  will  result  in  some  consumers  switching  from  their  regular  account  to  a 
cheaper option. The revenue of providers may fall. It is impossible to quantify these 
numbers  as  while  concrete  cost  savings  would  be  available  for  these  consumers,  a 
number  of  consumers  may  decide  against  switching  as  the  basic  account  may  not 
have all the services of a 'normal' account. Consequently, the numbers depend largely 
on consumer preferences, which vary considerably. As such, it is assumed that these 
costs,  even  though  potentially  substantial,  are  not  quantifiable.  Given  that  all 
Member  States  would  have  a  new  system  introduced  and  that  the  switching  rate  is 
likely to be higher due to the universality of the option (i.e. it would be available to 
everyone not just the unbanked), these costs are likely to be substantially higher. 

Payment services providers would face recurring annual benefits of between EUR 20 million 
and  EUR 100 million.  There  would  be  the  same  further,  non-quantifiable,  benefits  as  in 
Option  2  above.  Since  universal  access  should  reduce  the  number  of  unbanked  citizens 
compared to Option 2, these benefits would be slightly higher. 
Governments 
Member States will face total costs of up to EUR 3.40 million in the first year depending on 
the instrument chosen. Member States will face total benefits of between EUR 20 million and 
EUR 100 million in the first year. There would also be non-quantifiable benefits in terms of 
less fraud associated with paper systems and less costly local tax collection.  

Table 2.J: Cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
One off costs of introducing legislation 
Recurring costs of monitoring and supervising 
application 
Total costs 
Benefits 
Recurring annual benefits 

EN 

1.27 

2.12 

3.4 

20 

136 

1.27 

2.12 

3.4 

64 

1.27 

2.12 

3.4 

100 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Not quantifiable 
20 

Not quantifiable 
64 

Other benefits (less benefit and tax fraud) 
Total benefits 
Other stakeholders – utility firms 
Utilities providers will face total benefits of between EUR 36 million and EUR 180 million 
annually, provided Option 2 applied. However, under this option, benefits would be closer to 
the upper end of the scale (EUR 180 million) since the number of unbanked citizens (at least 
relative to Option 2) would be lower due to the universal right of access. Since all Member 
States  would  have  to  introduce  universal  access,  no  discount  factor  will  be  applied:  the 
number of unbanked citizens will fall even in those Member States that have implemented the 
Recommendation. 

Not quantifiable 
100 

Table 2.K: Total benefits for utility firms from lower transaction costs (EUR million) 

2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1.5/transaction 

36 

115 

180 

5.3.2.  Variant  B:  Introduce  a  right  to  a  basic  payment  account  at  least  for  national 

residents 

Effectiveness of policy option 
The  effectiveness  of  this  policy  option  would  largely  be  dependent  on  the  degree  of 
application of the provisions of the Recommendation (Option 2). 
This  option  would  only  solve  the  problem  of  financial  exclusion  at  the  national  level  and 
would  erect  barriers  to  the  internal  market.  Unbanked  consumers  would  be  able  to  open  a 
basic payment account free of charge or at low cost exclusively in their country of residence 
which  is  regarded  as  sufficient  by  the  financial  industry.472  This  solution  would  be  entirely 
ineffective  in  facilitating  cross-border  access  to  basic  payment  services  and  contrary  to  the 
European Parliament recommendation which states that "access to basic payment services is a 
precondition  for  consumers  to  benefit  from  the  internal  market."473  In  addition,  consumers 
would  not  be  encouraged  to  travel  for  work  or  to  study  in  another  Member  State  as  they 
would  not  have  a  right  to  deposit  their  savings,  wages  or  scholarships  in  a  local  payment 
account. This could create a major restriction to the free movement of persons guaranteed by 
the  Treaty  and  could  be  considered  discriminatory  vis-à-vis  non-residents  from  other  EU 
Member States. This would also be an important barrier to potential economic growth in the 
EU which is mitigated by millions of foreign workers who are ready to travel to EU regions 
where deficiencies in the availability of labour exist. 
Despite the cross-border shortcomings, this option would however largely address the larger 
problem  of  unbanked  consumers,  reducing  financial,  economic  and  social  exclusion  by 
enabling  newly  banked  consumers  to  participate  in  modern  national  societies  with  a  greater 
confidence.  However,  a  non-universal  right  of  access  to  payment  accounts,  in  line  with  the 
Recommendation's  provisions,  would  allow  Member  States  to  designate  only  selected 
institutions to provide basic payment accounts. It can be assumed that such a solution would 
not result in attracting as many unbanked consumers as the measure on universal access when 
all providers would be obliged to offer this service cross-border. 
This option would also allow for a higher number of payments to be made by administrations 
(e.g. social benefits) and employers (wages) through bank transfers thus ensuring savings and 
perhaps  additional  resources  for  investments  that  could  bring  further  economic  growth. 
Nevertheless,  under  the  features  of  a  basic  payment  account,  consumers  would  not  have 

472  Summary of responses to the public consultation on access to a basic payment account, 25.01.2011, p. 7, 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary-2010_en.pdf  

473  European Resolution with recommendations to the Commission on access to basic banking services, 2012/2055(INI), 

4 July 2012, p. 4. 

EN 

137 

   EN 

 
                                                 
access  to  all  payment  means,  such  as  those  allowing  for  online  shopping.  Cross-border 
internet shopping would not be available for holders of a basic payment account and a major 
chance for this sector’s development and greater market competition would be missed. 
Depending  on  the  policy  instrument  chosen  and  assuming  that  this  option  would  introduce 
common general rules on the right of access across the EU (based on the implementation of 
the  Recommendation),  Member  States  would  still  be  given  the  flexibility  necessary  to 
recognise  different  conditions  at  national  level  (e.g.  unequal  degree  of  development  of  the 
banking sector, varying price levels of banking services in Member States, different banking 
traditions  and  divergent  levels  of  payment  account  penetration).  Therefore  they  could,  for 
instance,  set  the  limits  for  the  price  of  a  basic  payment  account,  choose  whether  or  not  to 
designate selected or all providers to offer basic payment accounts, or decide on the content 
and target of public campaigns informing about the availability of this product (as foreseen by 
the Recommendation). 
Impacts of policy option on stakeholders and efficiency 
The impacts of this policy option would largely be dependent on the degree of application of 
the provisions of the Recommendation (Option 2). 
Unbanked  consumers  in  their  country  of  residence  would  have  access  to  basic  payment 
accounts  free  of  charge  or  at  minimal  cost  but  with  limited  features.  In  general,  the  same 
effects as described under Option 3A could be expected albeit with some differences. There 
would be cost savings for domestic unbanked consumers who would have an easy access to 
basic  payment  account  free  of  charge  or  at  low  cost.  In  particular,  mobile  consumers  could 
still  face  difficulties  in  opening  a  basic  payment  account.  This  could  be  particularly 
problematic  for  less  wealthy  mobile  consumers,  such  as  migrant  workers  who  work  in 
agriculture  or  in  construction.  Moreover,  domestic  consumers  would  continue  to  face 
additional costs, often excessive for vulnerable consumers, should they wish to make use of 
online shopping or internet banking. This would inhibit their ability to avail of savings which 
can be achieved from lower prices online.  
Financial  services  providers  (all  or  some  depending  on  the  approach  chosen  by  Member 
States  or  self-regulatory  initiatives)  would  incur  costs  (e.g.  accounts’  subsidies,  internal 
administrative  procedures  and  staff  resources)  related  to  the  provision  of  basic  payment 
accounts to domestic consumers. The majority of these costs would fall on financial services 
providers  in  Member  States  with  a  high  number  of  unbanked  consumers  (e.g.  EU12  and 
especially Romania and Bulgaria). However, these costs would be lower than in Option 3A 
because  there  would  not  be  an  obligation  to  provide  an  account  to  non-residents,  even  for 
those  Member  States  which  have  a  large  number  of  migrant  workers.  The  benefits  would 
however also be correspondingly lower. 
Member  States  would  face  costs  and  benefits  although  the  ultimate  size  of  these  impacts 
would  depend  on  the  instrument  chosen.  In  principle,  these  would  be  similar  to  those 
described  under  Option  2  (i.e.  less  than  under  Option  3A)  and  dependent  on  the  degree  of 
application of the provisions of the Recommendation.  
Companies would also face benefits from efficiency gains although the ultimate size of these 
impacts would depend on the instrument chosen. In principle, these would be similar to those 
described  under  Option 3A and dependent on the  degree of  application  of the provisions of 
the  Recommendation.  However,  it  is  likely  that  they  would  be  slightly  lower  due  to  the 
domestic focus of this option. Companies providing goods and services online would however 
not benefit to the same extent from this option as there is no guarantee of online purchasing 
facilities.  Moreover,  international  companies,  particularly  those  online,  would  continue  to 
suffer if the features of the account are limited to domestic transactions 

EN 

138 

   EN 

Quantification of costs and benefits 
The impacts of this policy option would largely be dependent on the degree of application of 
the  provisions  of  the  Recommendation  (Option  2).  In  general,  the  same  impacts  as  those 
described under Option 2 would be felt albeit with some, largely qualitative, differences and 
which stem from the fact that under this policy option only national residents would have the 
right  of  access  to  a  basic  payment  account.  As  such,  the  figures  provided  illustrate  the 
estimated  cumulative  benefit  of  Option  2  when  combined  with  this  policy  option.  For  the 
calculation  of  the  potential  costs  and  benefits  of  this  policy  option,  a  discount  is  applied  to 
take into account the fact that three Member States (Belgium France and Italy) have already 
fully  implemented  the  Recommendation  and  all  national  residents  have  a  right  to  a  basic 
payment account. 
Consumers 
Consumers will face total costs of between EUR 102 million and EUR 510 million in the first 
year. These costs will be incurred in those Member States where the Recommendation has not 
yet been implemented. 

Table 2.L: Costs and benefits for consumers (EUR millions) 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, risk 
of seizure of funds) 
Total costs 
Benefits 
Benefits from reduced use of money 
transmission and cheques 
Benefits through discounts for electronic 
payments 
Benefits through discounts for online 
purchases 
Other benefits (increased accessibility of 
funds, reduced risk of theft, increased 
choice of goods and services, accessibility 
of accommodation/employment/improved 
confidence) 
Total benefits 

2 million 
consumers 

85 
17 

6.4 million consumers 

10 million consumers 

273 
53 

426 
84 

Not quantifiable 

Not quantifiable 

Not quantifiable 

102 

301 

209 

0 

326 

963 

668 

0 

510 

1504 

1044 

0 

Not quantifiable 

Not quantifiable 

Not quantifiable 

510 

1 631 

2 548 

These  figures  include  both  one-off  costs  and  recurring  costs.  However,  in  practice,  one-off 
costs for unbanked consumers have not been identified since the cost of opening of a payment 
account  is  included  in  the  first  annual  fee  which  the  consumer  has  to  pay  for  the  account 
maintenance. All costs incurred by consumers are recurring costs. The recurring costs borne 
by consumers can be broken as follows: 

• 

• 

• 

Annual maintenance charge (which includes start-up charges in the first year); 

Costs of inappropriate use of account; 

There  would  also  be  non-quantifiable  costs  for  consumers  in  the  form  of  potential 
losses from fraud in the event that the account details are lost or stolen as well as the 
risk of possible seizure of funds in the event of any court judgement. 

Consumers  will  also  face  recurring  annual  benefits  of  between  EUR 510 million  and 
EUR 2548 million  provided  that  there  is  improved  application  of  the  provisions  of  the 
Recommendation as foreseen under Option 2. Under this option, the benefits would however 
be closer to the lower end of the scale as the number of unbanked (at least relative to Option 
2) would not decrease very substantially due to the fact that non-residents would not have a 
right to a payment account. The annual recurring benefits can be broken down as follows: 

EN 

139 

   EN 

 
 
 
 
 
 
 
• 

• 

Benefits from discounts from reduced use of money transmission and cheques;  

Benefits from discounts from electronic payments and online purchases. 

Consumers would also face non-quantifiable benefits in the form of being able to access their 
funds  more  quickly,  regardless  of  their  geographic  location;  they  would  benefit  from  an 
increased sense of security through lower levels of cash transactions, an increased choice of 
goods  and  services  where  electronic  payments  are  obligatory,  the  ability  to  access 
employment and accommodation more easily and a reduced sense of financial, economic and 
social exclusion. 
Payment services providers 
Payment  account  providers  will  face 
total  costs  of  between  EUR 67 million  and 
EUR 334 million in the first year provided that there is improved application of the provisions 
of the Recommendation as foreseen under Option 2. These costs consist of annual recurring 
costs and one-off costs. The annual recurring costs are account operation costs.  

Table 2.M: Cost and benefits for providers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training). 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

67 

214 

334 

Not quantifiable 

Not quantifiable 

Not quantifiable 

67 

17 

214 

53 

334 

84 

Not quantifiable 

Not quantifiable 

Not quantifiable 

17 

53 

84 

Payment  services  providers  would  face  recurring  annual  benefits  of  EUR 17 – 84 million. 
There would be the same further, non-quantifiable, benefits as in Option 2 above.  
Governments 
Member States will face total costs of up to EUR 3.02 million in the first year, depending on 
the instrument chosen. Member States will face total benefits of EUR 17 – 84 million in the 
first year. There would also be non-quantifiable benefits in terms of less fraud associated with 
paper systems and less costly local tax collection.  

Table 2.N: Cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
One off costs of introducing legislation 
Recurring costs of monitoring and supervising 
application 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (less benefit and tax fraud) 
Total benefits 

1.13 

1.89 

3.02 

1.13 

1.89 

3.02 

1.13 

1.89 

3.02 

17 
Not quantifiable 
17 

53 
Not quantifiable 
53 

84 
Not quantifiable 
84 

Other stakeholders – utility firms 
Utility providers will face total benefits of between EUR 36 million and EUR 180 million in 
the  first  year  (likely  to  be  closer  to  the  lower  end  of  the  scale),  provided  Option  2  applied, 
since non-residents would not have a right of access.. 

Table 2.O: Total benefits for utility firms from lower transaction costs (EUR million) 

EN 

140 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1,5/transaction 

31 

96 

150 

5.3.3.  Variant  C:  Introduce  a  right  to  a  basic  payment  account  at  least  to  those  non-
residents with a link to the country where they wish to open an account (i.e. targeting 
specifically mobile consumers) 

Effectiveness of policy option 
The impacts of this policy option would be closely related to the degree of application of the 
provisions of the Recommendation (Option 2) and the instrument chosen. 
This option would reduce the number of excluded national and mobile consumers with a link 
to  the  country,  although  only  to  the  extent  that  the  Recommendation  is  applied.  In  general, 
similar effects could be envisaged as those in Option 2, albeit on a far lesser scale since the 
benefits would only be accrued  by mobile consumers with a link to the country where they 
apply  for  an  account,  which  represents  a  comparatively  small  number  of  people.  The 
effectiveness in terms of reducing the number of unbanked (both in terms of vulnerable and 
mobile  consumers)  would  also  depend  on  the  opportunity  cost  (in  terms  of  time  and  effort) 
associated with proving the link to that member state. Such an additional requirement in order 
to  open  a  payment  account,  demonstration  of  which  may  be  even  more  difficult  due  to  a 
language barrier, would decrease the confidence of foreign consumers. 
The shortcomings of the Recommendation identified in Section 1.2, e.g. limited availability of 
some  payment  means  (e.g.  online  payment  facility), would persist and would have negative 
effects on consumption – particularly in a cross-border context – and growth.  
Providers of basic payment accounts would find it more demanding to enter new markets, as 
they would be required to verify the link of non-residents with the country. This could be even 
more burdensome and costly for them if the criteria for this link were established at national 
level, even if only to a limited extent. Unless the criteria were defined at EU level, this would 
not create a level playing field, since local providers would better understand the specificity of 
national documents needed to prove this link. Cross-border providers would need to incur the 
cost necessary to adapt to national legal environments. 
Depending  on  the  policy  instrument  chosen  and  assuming  that  this  option  would  introduce 
common general rules on the right of access across the EU (based on the implementation of 
the  Recommendation),  Member  States  would  still  be  given  the  flexibility  necessary  to 
recognise  different  conditions  at  national  level.  Therefore  they  could,  for  instance,  set  the 
limits for the price of a basic payment account, choose whether or not to designate selected or 
all  providers  to  offer  basic  payment  accounts,  define  which  documents  can  prove  a 
consumer's  link  with  the  country,  or  decide  on  the  content  and  target  of  public  campaigns 
informing  consumers  about 
the 
Recommendation). 
Impacts of policy option on stakeholders and efficiency 
Consumers  would  face  costs  and  benefits.  The  additional  administrative  burden  of  the 
procedure  to  confirm  a  'link'  with  the  country  where  the  consumer  intends  to  open  a  bank 
account could discourage many mobile consumers, particularly vulnerable ones who may find 
it  difficult  to  collect  and  provide  the  necessary  documentation.  Consequently,  it  is  assumed 
that this option would have little real impact on the level of unbanked citizens. For example, 
consumers could be required to present a document demonstrating that they legally work or 
study  in  the  new  Member  State  which  however  can  be  difficult  to  obtain  shortly  after  the 
arrival. This could delay their access to a payment account forcing them for instance to keep 
their money in a less secure place or having limited access to them. They might also need to 

the  product  (as  foreseen  by 

the  availability  of 

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141 

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use  more  costly  channels  to  receive  or  transfer  funds  before  they  will  be  able  to  open  a 
payment account. Moreover, legal residents and citizens would have the right of access to a 
basic payment account guaranteed but without some important features, e.g. internet banking 
or  online  shopping,  for  which  they  would  need  to  pay  extra  due  to  the  limited  scope  of  the 
Recommendation. Without the possibility of making use of e-commerce they would continue 
paying higher prices for products and services and would still have limited choice.  
Account providers would incur high costs and a large administrative burden. However, there 
would be the additional – and potentially substantial – administrative burden of the procedure 
to confirm a 'link'. Appropriate enforcement efforts would also need to be put in place in order 
to avoid unjustified rejection of non-residents' applications by banks. Nevertheless, since this 
option  would  only  be  applied  for  'mobile'  consumers,  then  providers  would  face  such  an 
increased administrative burden albeit on a far lesser scale. In terms of distribution of impacts, 
account providers in countries where there are higher numbers of migrant workers (e.g. UK) 
would  face  a  higher  administrative  burden  compared  to  those  countries  that  have  more 
emigration. In the cross-border context, providers might furthermore be subject to additional 
national rules defining, for instance, which national documents are necessary in order for the 
link  to  be  adequately  proven.  This  can  be  an  additional  cost  for  them  which  may  outweigh 
potential benefits from entering new markets and thus discourage them from expanding. 
Companies would also face benefits from efficiency gains, although the ultimate size of these 
impacts would depend on the instrument chosen. In principle, these would be similar to those 
described under Option 2 and dependent on the degree of application of the provisions of the 
Recommendation. However, it is likely that they would be slightly lower than those in Option 
2 as the administrative procedure for verifying access could deter consumers from opening a 
payment  account.  Companies  providing  goods  and  services  online  would  not  benefit  to  the 
same  extent  from  this  option  as  there  is  no  guarantee  of  online  purchasing  facilitates. 
Moreover, international companies, particularly those online, would continue to suffer if the 
features of the account are limited to domestic transactions. 
Member  States  would  face  costs  and  benefits  although  the  ultimate  size  of  these  impacts 
would depend on the instrument chosen. In principle, the type of impacts would be similar to 
those described under Option 2 and dependent on the degree of application of the provisions 
of  the  Recommendation.  Member  States  may  incur  additional  costs  since  they  might  be 
required  to  define  legal  criteria  for  the  'link  with  the  country'  for  non-residents  wishing  to 
open a bank account, and then ensure banks' compliance with these criteria. 
Quantification of costs and benefits 
The impact of this policy option would largely be dependent on the degree of application of 
the provisions of the Recommendation. In general, the same impacts as those described under 
Option 2 would be felt albeit with some, largely qualitative, differences which are described 
below. They stem from the fact that under this policy option (aside from all national residents) 
only  those  non-residents  who  can  prove  a  link  to  the  country  where  they  wish  to  open  an 
account  would  have  the  right  of  access  to  a  basic  payment  account.  As  such,  the  figures 
provided  illustrate  the  estimated  cumulative  benefit  of  Option  2  when  combined  with  this 
policy  option.  For  the  calculation  of  the  potential  costs  and  benefits  of  this  policy  option,  a 
discount is applied to take into account the fact that three Member States (Belgium France and 
Italy)  have  already  fully  implemented  the  Recommendation.  Thus,  they  should  not  be 
impacted by this option since both national residents and non-residents already have the right 
of access to a basic payment account in these countries. 
Consumers 

EN 

142 

   EN 

Consumers will face total costs of between EUR 105 million and EUR 526 million in the first 
year, provided that there is improved application of the provisions of the Recommendation, as 
foreseen,  under  Option  2.  These  costs  will  be  incurred  in  those  Member  States  where  the 
Recommendation has not yet been implemented. 
Under this option, costs would be at the mid- to upper-end of the scale, as the reduction in the 
number  of  unbanked  (at  least  relative  to  Option  2)  would  be  substantial,  but  would  still 
exclude those non-residents who do not have a link with the country where they wish to open 
an account (e.g. migrant workers who just arrived). In addition, the calculation discounts the 
three Member States (Belgium France and Italy) where the Recommendation has been fully 
implemented  and  where  both  national  residents  and  non-residents  have  a  right  to  a  basic 
payment account. 

Table 2.P: Cost and benefits for consumers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, risk 
of seizure of funds) 
Total costs 
Benefits 
Benefits from reduced use of money 
transmission and cheques 
Benefits through discounts for electronic 
payments 
Benefits through discounts for online 
purchases 
Other benefits (increased accessibility of 
funds, reduced risk of theft, increased 
choice of goods and services, accessibility 
of accommodation/employment/improved 
confidence, benefits from switching to a 
cheaper account) 
Total benefits 

88 
17 

281 
55 

440 
86 

Not quantifiable 

Not quantifiable 

Not quantifiable 

105 

310 

216 

0 

337 

993 

690 

0 

526 

1552 

1078 

0 

Not quantifiable 

Not quantifiable 

Not quantifiable 

526 

1 683  

2 630 

These  figures  include  both  one-off  costs  and  recurring  costs.  However,  in  practice,  one-off 
costs for unbanked consumers have not been identified since the cost of opening of a payment 
account  is  included  in  the  first  annual  fee  which  the  consumer  has  to  pay  for  account 
maintenance.  All  costs  incurred  by  consumers  are  therefore  recurring  costs.  The  recurring 
costs borne by consumers can be broken as follows: 

• 

• 

• 

Annual maintenance charge (which includes start-up charges in the first year); 

Costs of inappropriate use of the account; 

There  would  also  be  non-quantifiable  costs  for  consumers  in  the  form  of  potential 
losses from fraud in the event that the account details are lost or stolen and the risk of 
possible seizure of funds in the event of any court judgment.  

Consumers  will  also  face  recurring  annual  benefits  of  between  EUR 526 million  and 
EUR 2630 million,  provided  that  there  is  improved  application  of  the  provisions  of  the 
Recommendation as foreseen under Option 2. Under this option, benefits would be at the mid- 
to  upper-end  of  the  scale  as  the  reduction  in  the  number  of  unbanked  (at  least  relative  to 
Option 2) would be substantial but would still exclude those non-residents who do not have a 
link  with  the  country  where  they  wish  to  open  an  account  (e.g.  migrant  workers  who  just 
arrived). The annual recurring benefits can be broken down as follows: 

• 

Benefits from discounts from reduced use of money transmission and cheques; 

EN 

143 

   EN 

 
 
 
 
 
 
 
• 

Benefits from discounts from electronic payments and online purchases.  

Consumers would also face non-quantifiable benefits in the form of being able to access their 
funds  more  quickly,  regardless  of  their  geographic  location;  they  would  benefit  from  an 
increased sense of security through lower levels of cash transactions; an increased choice of 
goods  and  services  where  electronic  payments  are  obligatory;  the  ability  to  access 
employment and accommodation more easily; and a reduced sense of financial, economic and 
social exclusion. 
Payment services providers 
Payment account providers will face total costs of EUR 69 – 345 million in the first if Option 
2  were  applied.  These  costs  consist  of  annual  recurring  costs  and  one-off  costs.  The  annual 
recurring costs are account operation costs. 

Table 2.Q: Cost and benefits for providers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training). 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

69 

221 

345 

Not quantifiable 

Not quantifiable 

Not quantifiable 

69 

17 

221 

55 

345 

86 

Not quantifiable 

Not quantifiable 

Not quantifiable 

17 

55 

86 

Payment services providers would face recurring annual benefits of between EUR 17 million 
and EUR 86 million. There would be the same further, non-quantifiable, benefits as in Option 
2 above.  

Governments 
Member States will face total costs of up to EUR 3.02 million in the first year depending on 
the instrument chosen. These costs are calculated in the same way as described in Section 6.2 
(Option  2)  taking  into  account  the  discounts  for  the  three  Member  States  where  the 
Recommendation has already been implemented. Member States may incur additional costs to 
define  legal  criteria  for  the  'link  with  the  country'  for  non-residents  willing  to  open  a  bank 
account,  however  these  are  non-quantifiable.  Member  States  will  face  total  benefits  of 
between  EUR 17 million  and  EUR 86 million  in  the  first  year.  There  would  also  be  non-
quantifiable benefits in terms of less fraud associated with paper systems and less costly local 
tax collection.  

Table 2.R: Cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
One off costs of introducing legislation 
Recurring costs of monitoring and supervising 
application 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (less benefit and tax fraud) 
Total benefits 

1.13 

1.89 

3.02 

1.13 

1.89 

3.02 

1.13 

1.89 

3.02 

17 
Not quantifiable 
17 

55 
Not quantifiable 
55 

86 
Not quantifiable 
86 

Other stakeholders – utility firms 
Utilities  providers  would  face  total  annual  benefits  of  between  EUR 31 million  and 
EUR 150 million (expected to be at the upper end of the scale) provided Option 2 applies. The 

EN 

144 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
reduction in the number of unbanked would be substantial, including non-residents with a link 
to the country.  

Table 2.S:  Total benefits for utility firms from lower transaction costs 

2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1,5/transaction 

31 

99 

155 

5.4. 

Option 4: Improve the features of the basic payment account 

5.4.1.  Variant  A:  enlarge  the  list  of  basic  services  to  include  internet  banking  and  online 

purchasing 

Effectiveness of policy option 
This option itself would not contribute to a significant reduction in the number of unbanked 
consumers unless introduced together with Option 2. It should, however, improve consumers' 
access to certain basic payment services. 
In particular, this option would substantially improve consumers’ access to modern means of 
payment,  such  as  those  allowing  consumers  to  make  payments  over  the  internet  and/or  to 
manage their account through an online banking facility in line with the European Parliament 
recommendations  to  the  Commission  on  Access  to  Basic  Banking  Services.474  The 
opportunity to make use of e-commerce would be a major advantage for consumers since it 
would give them access to a greater choice of products (including some which are difficult to 
obtain offline) and lower prices. This would boost their confidence by letting them make full 
use  of  innovative  and  modern  channels  of  purchase  and  communication.  At  the  same  time, 
internet banking would ensure convenience in control of the account balance and in execution 
of  many  banking  operations  online,  e.g.  direct  debits.  Such  features  may  even  encourage 
unbanked  consumers  to  open  accounts  and  facilitate  cross-border  activity  by  consumers,  as 
they would find it easier to have a payment account in another Member State, because they 
could do so online and residence would not be essential. 
This  option  could  also  facilitate  cross-border  activity  by  providers  as  they  would  not 
necessarily need to open a branch or establish a subsidiary in order to provide basic account 
services,  because  newly  banked  consumers  would  be  able  to  carry  out  many  operations 
online.  This  would  potentially  have  a  positive  impact  on  competition  and  prices.  Providers 
across  the  EU  would  also  need  to  follow  similar  requirements  on  a  basic  payment  account 
based  on  the  provisions  of  the  present  Recommendation,  which  would  allow  for  a  level 
playing field in this market. 
Depending  on  the  policy  instrument  chosen  and  assuming  that  this  option  would  introduce 
common general rules on the right of access across the EU (based on the implementation of 
the  Recommendation),  Member  States  would  still  be  given  the  flexibility  necessary  to 
recognise different conditions at national level. 
Impacts of policy option on stakeholders and efficiency 
This  option  will  enable  consumers  to  save  both  money  and  time.  Consumer  benefits  would 
come  through  several  channels.  First,  consumers  should  benefit  from  using  more  efficient 
payment instruments, i.e. reduced use of money transmission mechanisms and fewer cheques. 
Consumers would therefore be able to use cheaper payment instruments, such a bank transfers 
rather than, more expensive payment methods, such cash or cheques. Second, consumers will 
be able to access and pay less for products and services available over the internet. As argued 
by the European Consumer Organisation BEUC "people without access to various means of 

474  European Resolution with recommendations to the Commission on access to basic banking services, 2012/2055(INI), 

4 July 2012, p. 13. 

EN 

145 

   EN 

 
                                                 
payment are unable to take advantage of the lower prices of goods and services that internet 
sales  can  offer."475  Third,  internet  banking,  also  considered  necessary  by  consumer 
organisations476, would also allow consumers for better control of their account balance and 
of the payments to be made. Fourth, consumers should be able to benefit from discounts from 
using electronic payments, for example, by establishing a direct debit to pay their electricity 
bill. Finally, consumers could benefit from the reduced risk of theft or fraud associated with 
cash payments (see Section 2.4). Nevertheless, consumers’ resources would not be protected 
against  seizure  by  creditors  under  this  option.  This  may  be  a  factor  discouraging  some 
unbanked  citizens,  who  tend  to  fall  into  debts,  from  opening  a  basic  payment  account. 
However,  the  right  of  access  in  itself  may  still  be  limited  at  both  national  and  cross-border 
level since there would be no guarantee that the provisions of Recommendation were applied. 
Consumers may face some additional costs associated with the new account's features (online 
purchase facility). These costs should not be excessive as they should be provided either free 
of  charge  (e.g.  included  in  the  annual  account  fee)  or  at  reasonable  cost.  Some  of  the  most 
vulnerable consumers will bear occasional and recurring costs for the inappropriate use of the 
basic  account,  e.g.  unpaid  overdrafts.  In  France  and  the  UK  these  charges  are  estimated  at 
somewhere between EUR 17 and 22 for each failed transaction.477 As a result of these charges 
and  as  a  minimum  balance  is  not  protected  against  seizure  by  creditors  under  this  option, 
some  consumers,  especially  those  who  tend  to  fall  in  financial  difficulties,  may  still  be 
discouraged from opening a payment account.  
Financial services providers would be able to make some efficiency gains by moving to more 
efficient means of payment and enabling account management to take place online. Moreover, 
they  would  face  a  reduced  demand  for  cash,  so  would  not  face  additional  costs  in  terms  of 
insurance or transportation of cash. However, these benefits would be limited, as the right of 
access in itself would not alter under this option. Providers would incur costs, as they would 
need to ensure additional account features such as internet banking and instruments allowing 
for internet purchases. However, such features already exist on many current accounts so it is 
unlikely  that  the  incremental  costs  of  making  such  facilitates  available  to  basic  accounts 
would  be  substantial.  If  these  account  features  were  to  be  provided  together  with  a  basic 
payment account to all unbanked consumers, then their cost could be substantial, especially 
for the providers in Member States where there are still many consumers without a payment 
account  (e.g.  Romania  or  Bulgaria).  It  would  be  less  expensive  in  countries  where  a  great 
majority of citizens already holds a payment account, although in these Member States, many 
mobile  consumers,  e.g.  migrant  workers,  who  have  been  unbanked  so  far,  may  request  an 
access  to  a  basic  payment  account.  With  internet  banking  and  instruments  allowing  for 
internet  purchases,  it  would  probably  need  to  be  assessed  whether  a  basic  payment  account 
can still be offered free of charge or at low cost as currently envisaged by the provisions of 
the  Recommendation.  Finally,  providers  interested  in  offering  payment  account  services 
cross-border would continue to face unnecessary barriers and costs as the rules introduced in 
Member  States,  although  based  on  the  Recommendation's  provisions  would  differ  from 
country  to  country.  Providers,  entering  new  markets,  would  have  to  meet  these  specific 
national requirements and therefore their IT systems, operating procedures, and the features of 
already  existing  products  would  have  to  be  adapted  accordingly.  These  costs  are  likely  to 

475  BEUC response to the Commission Consultation on access to a basic payment account, 25.01.2011, p. 4, 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm  
Ibid., p. 6. 

476 
477  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, p.41 http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  

EN 

146 

   EN 

                                                 
exceed potential benefits, at least in the short to medium term, and providers may refrain from 
start operating across borders. 
Member  States  could  make  savings  by  moving  to  more  efficient  means  of  payments,  i.e. 
switching from cash or cheques to electronic transfers. For this reason some public authorities 
stressed the importance of online banking as a feature of basic payment accounts.478 Benefits 
would  come  in  the  form  of  savings  on  payments  of  social  security  which  could  be  made 
through a bank transfer instead of more costly means (e.g. cheques). A 2010 study estimated 
these savings at EUR 7-12 per recipient per annum.479 Such savings may be substantial (see 
Section 2.1). 
Enterprises  –  in  particular  utility  companies  such  as  energy  and  water  providers  –  would 
benefit  from  reductions  in  transaction  costs  since  many  banked  consumers  would  switch  to 
cheaper online payments. More importantly, this option would present a huge opportunity for 
e-commerce. If coupled with Option 2, this option would allow consumers to take advantage 
of  lower  prices  and  a  greater  choice  of  products,  giving  an  important  boost  to  online 
businesses. Improvements are only expected over the longer-term as more consumers become 
aware  of  the  potential  benefits  of  online  shopping.  A  UK  study  found  that  22%  of  newly 
banked consumers had shopped by telephone or internet since opening their account.480 
Finally, society as a whole should benefit through economic development and growth, albeit 
to a limited extent, scale due to the fact that this option does not actually reduce the number of 
unbanked.  First,  the  development  of  the  retail  banking  in  less  advanced  countries  is 
unavoidable in the near future. Even if cash is still the only payment means for a significant 
part of the society in Romania and Bulgaria, with the rapid development of electronic means 
of  payment  which  are  generally  cheaper  and  safer,  citizens  of  these  and  other  EU  countries 
lagging  behind  will  quickly  catch  up  and  will  be  using  banking  services  in  a  universal  and 
habitual manner in  near  future.  This  will also ensure further economic growth in  the region 
since, as demonstrated in Sub-section 1.1.4, the use of electronic payments allows for savings 
in public administration,  private sector and  for consumers.481 Second, there is likely to be a 
reduced incidence of fraud and tax avoidance since payment transactions would increasingly 
take place through electronic (and traceable) payments channels. 
Quantification of costs and benefits 
The  impact  of  this  policy  option  would  be  dependent  on  the  application  of  the 
Recommendation (Option 2). In general, the same impacts as those described under Option 2 
would  be  felt  albeit  with  some  differences  which  are  described  below.  They  stem  from  the 
fact that under this policy option a basic payment account would include the possibility for the 
consumer to make online purchases and to use internet banking. As such, the figures provided 
illustrate the estimated incremental costs and benefits of this option compared with Option 2. 
As  Member  States  would  have  to  introduce  these  additional  features  of  a  basic  payment 
account, no discount factor will be applied: the number of unbanked  citizens would decline 
substantially  even 
the 
Recommendation. 
Consumers 

the  Member  States  which  have  already 

implemented 

in 

478  Summary of responses to the public consultation on access to a basic payment account, 25.01.2011, p. 5, 
http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary-2010_en.pdf  

479  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre 

for Strategy and Evaluation Services (CSES), July 2010, p. 51, http://ec.europa.eu/internal_market/finservices-
retail/inclusion_en.htm#study  

480  Nothing is free: A survey of the social cost of the main payment instruments in Hungary, National Bank of Hungary, 

p. 27. 

481  Strategy for Financial Inclusion, Steering Group on Financial Inclusion, Irish Department of Finance, June 2011, p. 14, 

http://www.finance.gov.ie/documents/publications/reports/2011/Fininclusreport2011.pdf  

EN 

147 

   EN 

                                                 
Consumers  would  face  total  costs  of  between  EUR  22  million  and  EUR  108  million  in  the 
first  year.  Table  2.T  shows  the  incremental  costs  and  benefits  of  this  Option  compared  to 
Option  2.  Under  this  Option,  costs  would  be  close  to  the  upper  end  of  the  scale  as  the 
reduction in the number of unbanked (at least relative to Option 2) is likely to be larger. 

Table 2.T: Incremental costs and benefits for consumers (EUR millions) 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, 
risk of seizure of funds) 
Total costs 
Benefits 
Benefits from reduced use of money 
transmission and cheques 
Benefits 
through 
electronic payments 
Benefits  through  discounts  for  online 
purchases 
Other  benefits  (increased  accessibility 
of 
theft, 
increased choice of goods and services, 
accessibility 
of 
accommodation/employment/improved 
confidence, benefits from switching to 
a cheaper account) 
Total benefits 

discounts 

risk  of 

reduced 

funds, 

for 

2 million 
consumers 

19 
2 

6.4 million consumers 

10 million consumers 

62 
7 

97 
11 

Not quantifiable 

Not quantifiable 

Not quantifiable 

22 

88 

28 

120 

69 

282 

89 

384 

108 

440 

139 

600 

Not quantifiable 

Not quantifiable 

Not quantifiable 

236 

754 

1179 

These figures include both one-off costs and recurring costs. However, in practice, no one-off 
costs  for  unbanked  consumers  have  been  identified  since  the  cost  of  opening  of  a  payment 
account  is  included  in  the  first  annual  fee  which  consumer  has  to  pay  for  account 
maintenance.  All  costs  incurred  by  consumers  are  therefore  recurring  costs.  The  recurring 
costs borne by consumers can be broken down as follows. 

• 

• 

• 

• 

Annual maintenance charge (which includes start-up charges in the first year); 

Costs of inappropriate use of account; 

It  is  assumed  that  even  though  new  features  of  a  basic  payment  account  would  be 
introduced, these would only insignificantly increase the account operation costs for 
consumers  and  mostly  due  to  the  necessary  payment  instruments  by  which  a 
consumer could purchase online. These additional potential costs are not quantifiable 
since the cost of an annual maintenance of a payment account estimated at EUR 51 
would  probably  be  sufficient  to  already  cover  the  internet  banking  facility  and  the 
possibility for consumers to buy online; 

There  would  also  be  other  non-quantifiable  costs  for  consumers  in  the  form  of 
potential losses from fraud in the event that the account details are lost or stolen as 
well as the risk of possible seizure of funds in the event of any court judgment. 

Consumers will also face incremental recurring annual benefits of between EUR 236 million 
and more than EUR 1179 billion as a result of the right of access to a basic payment account. 
Under this Option, the benefits would however be close to the upper end of the scale as the 
reduction in the number of unbanked (at least relative to Option 2) would be greater following 
the introduction of the new features of a basic payment account. The annual recurring benefits 
can be broken down as follows. 

• 

Benefits from discounts from reduced use of money transmission and cheques.  

EN 

148 

   EN 

 
 
 
 
 
 
 
• 

• 

Benefits from discounts from electronic payments and online purchases. 

Consumers would also face non-quantifiable benefits in the form of lower prices in 
internet  and  less  expensive  transfer  of  funds  via  internet  banking.  Other  non-
quantifiable benefits would include: quicker access to funds regardless of consumer's 
geographic  location,  an  increased  sense  of  security  through  lower  levels  of  cash 
transactions,  an  increased  choice  of  goods  and  services  where  electronic  payments 
are obligatory which would become available, the ability to access employment and 
accommodation  more  easily  and  a  reduced  sense  of  financial,  economic  and  social 
exclusion. 

Payment services providers 
Payment  account  providers  will  face  total  costs  of  between  EUR  15  million  and  EUR  74 
million in the first year as a result the right of access to a basic payment account. Table 2.U 
shows  the  incremental  costs  and  benefits  compared  to  Option  2.  The  annual  recurring  costs 
are as account operation costs. 

Table 2.U: Incremental costs and benefits for providers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training). 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

15 

48 

74 

Not quantifiable 

Not quantifiable 

Not quantifiable 

15 

2 

48 

7 

74 

11 

Not quantifiable 

Not quantifiable 

Not quantifiable 

2 

7 

11 

It  is  assumed  that  even  though  new  features  of  a  basic  payment  account  would  introduced, 
these  would  only  increase  the  account  operation  costs  for  providers  by  a  small  amount  and 
mostly  due  to  the  introducing  payment  instruments  by  which  a  consumer  could  purchase 
online.  These  additional  potential  costs  are  not  quantifiable:  the  estimated  EUR  51  annual 
maintenance cost of a payment account often covers internet banking and online purchasing 
facilities. 

Payment services providers would face recurring annual benefits of between EUR 2 million 
and EUR 11 million. There would be the same further, non-quantifiable, benefits as in Option 
2 above.  
Governments 
It is assumed that this Option can only be implemented in conjunction with Option 2. If this is 
the case, then Member States will not face any incremental costs under this option in the first 
year. Member States will face total benefits of between EUR 2 million and EUR 11 million in 
the first year. There would also be non-quantifiable benefits in terms of less fraud associated 
with paper systems and less costly local tax collection.  

Table 2.V: Incremental cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 

One off costs of introducing legislation 

Recurring costs of monitoring and supervising 
application 
Total costs 
Benefits 

EN 

0 

0 

0 

149 

0 

0 

0 

0 

0 

0 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring annual benefits 
Other benefits (less benefit and tax fraud) 
Total benefits 

2 
Not quantifiable 
2 

7 
Not quantifiable 
7 

11 
Not quantifiable 
11 

Other stakeholders 
E-commerce businesses would benefit from more consumers buying online. It is difficult to 
quantify the possible scale of benefits that it could bring to internet shops since it is difficult 
to  estimate  how  many  consumers  would  make  use  of  online  shopping  and  how  much  they 
would be able to spend there. 
Utilities  providers  would  face  incremental  benefits  of  between  EUR 16 – 80 million  in  the 
first year.  

Table 2.W: Total incremental benefits for utility firms from lower transaction costs 

2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1.5/transaction 

16 

51 

80 

5.4.2.  Variant B: enlarge the list of basic services to include a small overdraft or a 'buffer' 

facility 

Effectiveness of policy option 
This  Option  could  slightly  contribute  to  a  reduction  in  the  number  of  unbanked  consumers. 
Depending on the effectiveness of Option 2, it would also improve the quality of consumers' 
access to certain basic account services. 
This  option  would,  in  theory,  be  effective  in  increasing  the  confidence  of  vulnerable 
consumers  who  would  have  access  to  additional  financial  resources  in  the  form  of  an 
overdraft  or  a  small  ‘buffer’,  even  if  very  limited,  in  case  they  find  themselves  in  financial 
difficulties.  This  additional  feature  could  attract  especially  vulnerable  consumers  who  often 
have to struggle to make ends meet before their benefits are paid. However, it would need to 
be  ensured  that  banks  would  not  charge  consumers  excessive  fees  for  making  use  of  the 
overdraft or ‘buffer’ facility. This option would not ensure that consumers could have access 
to  all  basic  payment  means  since  it  does  provide  for  internet  banking  and  online  purchases 
tools.  
Moreover, the fact that an overdraft is provided would mean that the opening of the account 
(with the overdraft facility) would be subject to the Consumer Credit Directive, unless it was 
for  less  than  EUR  200.  In  practice,  several  Member  States  have  applied  the  Directive  to 
credits  lower  than  EUR  200.  Conversely,  the  addition  of  an  overdraft  to  a  basic  payment 
account  could  reduce  access  since  providers  would  be  likely  to  hold  the  consumer  to  an 
equivalent standard of creditworthiness. As a result, not many vulnerable consumers would be 
admitted  to  open  a  bank  account  with  an  overdraft,  while  the  banks'  costs  to  introduce  this 
facility  and  to  cover  related  risks  are  likely  to  be  very  high.  Therefore,  this  option  may 
actually be disproportionate to the set objectives.  
Even though a level playing field for providers would be guaranteed across Europe based on 
the principles of the Recommendation, providers would not necessarily be encouraged to offer 
basic  payment  accounts  in  other  Member  States  under  this  option.  If  a  consumer  does  not 
arrange an overdraft on his account, it would be less burdensome and costly for the bank to 
recover the debt from a domestic than foreign user. Because of this, and due to risks related to 
unpaid  overdrafts,  credit  institutions  could  refrain  from  providing  cross-border  payment 
accounts  thus  preventing  consumers  from  greater  access  to  cross-border  basic  banking 
services. 
Under this option, due higher risks of fraud and default for providers related to the overdraft 
and ‘buffer’ facility, more stringent rules of verification of information on applicants could be 

EN 

150 

   EN 

 
required,  as  with  providers  offering  consumer  credit.  These  rules  could  make  the  right  of 
access to a basic payment account more difficult for consumers with negative credit histories. 
Similarly,  to  provide  access  to  credit,  even  on  a  limit  scale,  would  be  contrary  to  the 
principles  of  responsible  lending  and  borrowing,  which  have  been  advocated  by  the 
Commission in the field of credit.482 
Depending  on  the  policy  instrument  chosen  and  assuming  that  this  option  would  introduce 
common general rules on the right of access across the EU (based on the implementation of 
the  Recommendation),  Member  States  would  still  be  given  the  flexibility  necessary  to 
recognise different conditions at national level. 
Impacts of policy option on stakeholders and efficiency 
This option would give clear short term benefits to users of basic payment accounts since it 
would  allow  them  to  go  beyond  available  account  balance  when  necessary.  These  benefits 
would  be  lower  if  banks  were  to  impose  fees  for  using  the  overdraft  or  buffer  facility. 
However, in the longer term, there is a risk that consumers would fall into indebtedness and, 
even though the amounts are small, could risk their future credit rating and future access to 
other products and services. 
An  overdraft  or  ‘buffer’  facility  would  substantially  increase  the  costs  of  a  basic  payment 
account for providers and therefore it is no surprise that financial industry is not in favour of 
it.483  Even  if  only  a  very  limited  overdraft  or  buffer  were  offered  with  a  basic  payment 
account, it would still be a major risk for banks. The related costs would rise to a great extent 
in the Member States with many unbanked citizens, such as Romania and Bulgaria, but could 
be also substantial in those where many migrant workers were likely to open a basic payment 
accounts  (e.g.  UK).  It  could  also  be  more  expensive  for  banks  to  verify  information  on 
applicants; the necessary procedures would need to be more stringent since the risk of fraud 
when an account is equipped with an overdraft or buffer facility is much higher. Due to the 
higher costs of a basic payment account when an overdraft or ‘buffer’ facility are included, 
and  if  the  accounts  are  still  to  be  provided  free  of  charge  or  at  low  cost,  as  it  is  currently 
stipulated in the Recommendation, the losses of banks would be significant and could deter 
provision of such accounts. 
E-commerce  businesses  would  not  necessarily  benefit  from  this  option,  since  it  does  not 
introduce  instruments  to  facilitate  online  shopping.  Consumers  would  need  to  pay  extra  for 
this. Due to the insignificant impact on the number of unbanked, enterprises would be unable 
to make major cuts on the cost of paying of wages to employees. 
Member States would need to bear the cost of implementing the new legislation on the right 
of access to a basic payment account (depending on the instrument to be chosen). They would 
not be able to make particular savings in using cheap electronic means to transfer benefits to 
consumers’ payment accounts. 
Finally,  society  as  a  whole  would  be  unlikely  to  benefit  greatly  through  economic 
development  and  growth  because  this  option  would  have  little  impact  on  the  number  of 
unbanked and could even increase this figure.  
Quantification of costs and benefits 
The impact of this policy option would largely be dependent on the degree of application of 
the  provisions  of  the  Recommendation  (Option  2).  In  general,  under  this  option  consumers 

482 

In particular, Directive 2008/48/EC and the Commission proposal for a Directive on credit agreements relating to 
residential property, COM (2011) 142. 

483  European Banking Federation (EBF) response to the public consultation on access to a basic payment account, 

25.01.2011, p. 6, http://ec.europa.eu/internal_market/finservices-retail/docs/inclusion/consultation_summary-
2010_en.pdf  

EN 

151 

   EN 

                                                 
would have access to a small overdraft or a buffer facility as an additional feature of a basic 
payment account, and this could lead to greater rather than less exclusion. As such, the figures 
provided illustrate the estimated incremental costs and benefits of this option compared with 
Option  2.  For  the  calculation  of  the  potential  costs  and  benefits  of  this  policy  option,  a 
discount is applied to take into account the fact that in one Member States which has already 
implemented  the  Recommendation  (France)  a  small  overdraft  or  a  buffer  facility  is  already 
available together with a basic payment account. Thus, France should not be impacted by this 
option  since  both  national  residents  and  non-residents  can  have  access  to  a  basic  payment 
account with this additional feature. 
Consumers 
Consumers will face total costs of between EUR -11 million and EUR -57 million in the first 
year. However, given that these costs are negative, these are in fact benefits. These costs will 
be  incurred  in  those  Member  States  where  a  small  overdraft  or  a  buffer  facility  in  not 
provided  as  an  additional  feature  of  a  basic  payment  account:  Belgium,  Sweden,  Germany, 
Hungary,    Austria,  Czech  Republic,  Estonia,  Greece,  Italy,  Lithuania,  Luxembourg,  Latvia, 
Poland,  Slovakia,  Slovenia,  Spain,  Cyprus,  Malta,  Romania,  Bulgaria,  the  Netherlands, 
Finland, Denmark, Ireland, the UK and Portugal. 
Under this Option, the costs would be towards the lower end of the scale as the reduction in 
the number of unbanked (at least relative to Option 2) would be lower or even negative. This 
is  due  to  the  availability  of  overdraft  or  buffer  facility  within  a  basic  payment  account.  In 
addition,  the  calculation  discounts  the  one  Member  States  (France)  which  has  already 
implemented the Recommendation and where a small overdraft or a buffer facility is already 
available.  

Table 2.X: Incremental cost and benefits for consumers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, risk of seizure of 
funds) 
Total costs 
Benefits 
Benefits from reduced use of money transmission and 
cheques 
Benefits through discounts for electronic payments 
Benefits through discounts for online purchases 
Other  benefits  (increased  accessibility  of  funds,  reduced 
risk  of  theft,  increased  choice  of  goods  and  services, 
accessibility 
accommodation/employment/improved 
confidence, benefits from switching to a cheaper account) 
Total benefits 

of 

-2 
-9 

-7 
-29 

-11 
-46 

Not quantifiable 

Not quantifiable 

Not quantifiable 

-11 

-8 

-6 
0 

-36 

-26 

-18 
0 

-57 

-40 

-28 
0 

Not quantifiable 

Not quantifiable 

Not quantifiable 

-14 

-44 

-68 

These figures include both one-off costs and recurring costs. However, in practice, no one-off 
costs  for  unbanked  consumers  have  been  identified  since  the  cost  of  opening  of  a  payment 
account  is  included  in  the  first  annual  fee  which  consumer  has  to  pay  for  the  account 
maintenance.  All  costs  incurred  by  consumers  are  therefore  recurring  costs.  The  recurring 
costs  borne  by  consumers  are  negative  for  this  Option  because,  relative  to  Option  2,  fewer 
unbanked  consumers  will  be  able  to  access  an  account.  These  costs  are  those  in  Variant  A 
above, and also: 

• 

It  is  possible  that  a  small  overdraft  or  a  buffer  facility  provided  by  banks  together 
with a basic payment account could substantially increase the cost of a basic payment 
account for consumers since banks would need to calculate the risk of not recovering 
overdrafts.  This  cost  is  however  not  quantifiable;  further,  the  estimated  EUR  51 

EN 

152 

   EN 

 
 
 
 
 
 
 
annual  maintenance  cost  may  sometimes  already  cover  a  small  overdraft  or  buffer 
facility.  

• 

Consumers may face additional non-quantifiable costs in the form of fees charged by 
banks  for  unpaid  overdrafts.  There  would  also  be  non-quantifiable  costs  for 
consumers  in  the  form  of  potential  losses  from  fraud  in  the  event  that  the  account 
details are lost or stolen as well as the risk of possible seizure of funds in the event of 
any court judgment.  

Consumers will however also face recurring annual benefits of between EUR -14 million and 
more than EUR -68 million. Under this option, the benefits would, however, be negative. This 
is due to the fact that providers would assess the creditworthiness of borrowers in line with 
rules on credit which would make access more difficult. Consequently, benefits of increased 
access are actually a cost here because the new account features will have a negative impact 
on access. The annual recurring benefits are those found in Variant A above. 
Consumers will however also face recurring annual benefits of between EUR -14 million and 
more than EUR -68 million. This figure is negative because compared to Option 2 it would 
lead to more unbanked consumers. Consequently, benefits of increased access are actually a 
cost here because it will lead to less access. Under this option, the benefits would, however, 
be  negative.  This  is  due  to  the  fact  that  providers  would  assess  the  creditworthiness  of 
borrowers  in  line  with  rules  on  credit.  The  annual  recurring  benefits  are  those  found  in 
Variant A above. 
Payment services providers 
Payment  account  providers  will  face  total  costs  of  between  EUR  -2  million  and  EUR  -9 
million in the first year. These costs are negative here as the providers would not have to open 
accounts  for  as  many  consumers  and  could  reject  them  on  the  basis  of  inadequate 
creditworthiness. However, since a small overdraft or a buffer facility is already available in 
one Member State, it will be discounted from the calculation of costs for the payment services 
providers. These costs consist of annual recurring costs and one-off costs.  

Table 2.Y: Incremental cost and benefits for providers compared to Option 2 (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training). 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

-2 

-7 

-9 

Not quantifiable 

Not quantifiable 

Not quantifiable 

-2 

-0.4 

-7 

-1 

-9 

-2 

Not quantifiable 

Not quantifiable 

Not quantifiable 

-0.4 

-1 

-2 

One-off costs would be incurred by providers assessing the risks of granting the consumer an 
overdraft  or  buffer  facility.  The  annual  recurring  costs  are  account  operation  costs.  It  is 
possible  that  a  small  overdraft  or  a  buffer  facility  provided  by  banks  in  addition  to  a  basic 
payment account would substantially increase the cost of providing a basic payment account 
for providers. This cost is not quantifiable. Payment services providers would face recurring 
annual benefits of between EUR -0.4 million and EUR -2 million. These benefits are however 
negative here as the providers would not have to open accounts for as many consumers and 
could  reject  them  on  the  basis  of  inadequate  creditworthiness.  There  would  be  the  same 
further, non-quantifiable, benefits as in Option 2 above.  

Governments 

EN 

153 

   EN 

 
 
 
 
 
 
 
Member States will face total costs of up to EUR 0.25 million in the first year depending on 
the instrument chosen. This cost would not exist if this option were combined with Option 2. 
There  could  also  be  risks  of  growing  over-indebtedness.  Member  States  will  face  total 
benefits of between EUR -0.4 million and EUR -2 million in the first year. These benefits are 
negative since there would be more unbanked consumers relative to Option 2 and thus fewer 
benefits for governments. There would also be non-quantifiable benefits in terms of less fraud 
associated with paper systems and less costly local tax collection. 

Table 2.Z: Incremental cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
One off costs of introducing legislation 
Recurring costs of monitoring and supervising 
application 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (less benefit and tax fraud) 
Total benefits 

0.09 

0.16 

0.25 

0.09 

0.16. 

0.25 

0.09 

0.16 

0.25 

-0.4 
Not quantifiable 
-0.4 

-1 
Not quantifiable 
-1 

-2 
Not quantifiable 
-2 

Other stakeholders – utility firms 
Utilities providers will face total benefits of between EUR -0,8 million and EUR -4 million in 
the first year. Under this Option, the benefits for utility firms would however be negative as 
the reduction in the number of unbanked (at least relative to Option 2) would be lower due to 
the risk of exclusion because of providers' assessing a consumer's ability to repay. 

Table 2.AA: Incremental total benefits for utility firms from lower transaction costs (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1,5/transaction 

-0,8 

-3 

-4 

5.4.3.  Variant C: ensure a minimum account balance that cannot be seized. 

this  option  seems 

Effectiveness of policy option 
This option would contribute to a very small reduction in the number of unbanked consumers 
as the number of unbanked consumers who are at danger to get their balance seized is rather 
small.  On  the  other  hand,  this  option  would  be  costly  for  banks  who  would  be  required  to 
protect  consumers'  balance  against  seizure.  Therefore, 
to  be 
disproportionate to the set objectives. Depending on the effectiveness of Option 2, it should, 
however, improve slightly the quality of consumers' access to certain basic account services  
This  option  would  be  effective  in  decreasing,  albeit  very  slightly,  the  number  of  unbanked 
consumers and especially those who tend to fall into financial difficulties. Many of them have 
reservations about opening a payment account because they are afraid that their balance could 
be  seized  by  creditors  in  case  they  fall  into  debt.  Under  this  option,  the  balance  would  be 
protected  to  a  certain  extent.  A  payment  account  covering  this  feature  could  attract  some 
vulnerable  consumers  and  would  be  positive  in  giving  them  confidence  so  they  are  able  to 
participate  fully  in  the  modern  banked  society.  They  could  also  receive  and  transfer  funds 
(which  is  usually  cheaper  than  other  payment  methods)  from  their  payment  account  and 
therefore it would help them avoid paying excessive fees. They would still however have no 
access to all basic means of payment, as internet shopping facilities are not included in this 
option.  
Banks  might  find  it  more  difficult  to  provide  cross-border  services  under  this  option  since 
they  would  need  to  follow  national  rules  protecting  the  basic  payment  account’s  balance 
against  seizure,  unless  these  rules  are  harmonised  at  EU  level.  An  uneven  playing  field 
resulting  from  divergent  national  measures  could  discourage  credit  institutions  from  cross-

EN 

154 

   EN 

 
 
 
 
 
 
 
 
border  activity  in  this  area.  Without  EU  harmonisation,  consumers  may  also  refrain  from 
accessing  cross-border  payment  accounts  since  they  may  have  difficulties  in  understanding 
whether their balance is equally protected in another Member State. 
Depending  on  the  policy  instrument  chosen  and  assuming  that  this  option  would  introduce 
common general rules on the right of access across the EU (based on the implementation of 
the  Recommendation),  Member  States  would  still  be  given  the  flexibility  necessary  to 
recognise different conditions at national level. 
Impacts of policy option on stakeholders and efficiency 
This option would be beneficial to users because a minimum balance on their basic payment 
accounts  would  be  protected  against  seizure  by  creditors.  Therefore,  even  if  in  debt, 
consumers would still have access to some minimum resources allowing them to pay for basic 
needs. However, since this additional feature would be costly for banks, consumers are likely 
to  pay  more  for  a  basic  payment  account  despite  the  Recommendation's  requirement  that  it 
should be free or at a reasonable cost. This additional cost could further discourage vulnerable 
unbanked consumers. 
Financial  services  providers  would  incur  additional  costs  if  they  had  to  ensure  non-seizable 
minimum  balances  on  basic  payment  accounts.  They  would  need  to  introduce  additional 
procedures  necessary  to  protect  this  balance.  Since  the  costs  of  the  maintenance  of  a  basic 
payment  account  would  increase  for  banks,  it  might  not  be  feasible  for  them  to  offer  this 
product free of charge or at low cost. If this were required by law (as currently envisaged by 
the  Recommendation)  then  the  losses  of  financial  institutions  could  be  substantial.  To 
diminish these costs, banks might refrain from offering basic payment accounts cross-border 
and therefore miss potential new business opportunities and profits. 
Companies, or other institutions which under national law are privileged creditors, would face 
substantial  costs  if  they  are  not  allowed  to  seize  the  resources  from  the  debtor's  account  to 
which they would normally have a right.  
This  option  would  significantly  affect  Member  States  in  terms  of  costs  related  to  the 
implementation of the new rules (depending on the instrument to be chosen). The obligation 
to protect a minimum balance would require considerable, costly changes to national civil and 
commercial legislation in many Member States. However, account payments have proved to 
be  the  most  economical  channel  to  transfer  benefits  and  wages,  and  therefore  obvious  cuts 
could  be  achieved  by  public  administrations  and  businesses  if  they  are  able  to  make  more 
payments  by  these  means.  The  financial  impact  of  this  policy  option  on  Member  States 
depends also on the implementation of the Recommendation (Option 2) under which public 
authorities are required to organise public campaigns raising awareness about the availability 
of basic payment accounts. 
Finally,  society  as  a  whole  would  benefit,  through  economic  development  and  growth,  but 
only  to  a  limited  extent,  as  this  option  would  only  slightly  reduce  the  number  of  unbanked 
citizens.  
Quantification of costs and benefits 
The impacts of this policy option would largely be dependent on the degree of application of 
the  provisions  of  the  Recommendation  (Option  2).  In  general,  the  same  impacts  as  those 
described under Option 2 would be felt, with a few differences. They stem from the fact that 
under this option, consumers would have the right of access to a basic payment account with a 
minimum account balance that cannot be seized. As such, the figures provided illustrate the 
estimated  incremental  costs  and  benefits  of  this  option  compared  with  Option  2.  For  the 
calculation  of  the  potential  costs  and  benefits  of  this  policy  option,  a  discount  is  applied  to 
take  into  account  the  fact  that  in  one  Member  State  (France)  an  account  with  a  minimum 

EN 

155 

   EN 

balance  that  cannot  be  seized  is  already  available.  Thus,  it  should  not  be  affected  by  this 
option. 
Consumers 
Consumers  will  face  total  costs  of  between  EUR  9  million  and  EUR  45  million  in  the  first 
year. These costs will be incurred in those Member States where an account with a minimum 
balance that cannot be seized is not available. The costs would be at the lower end of the scale 
as the reduction in the number of unbanked (at least relative to Option 2) would be small.  

Table 2.BB: Incremental costs and benefits for consumers compared to Option 2 (EUR millions) 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, risk of seizure 
of funds) 
Total costs 
Benefits 
Benefits from reduced use of money transmission 
and cheques 
Benefits through discounts for electronic payments 
Benefits through discounts for online purchases 
Other  benefits  (increased  accessibility  of  funds, 
reduced  risk  of  theft,  increased  choice  of  goods  and 
services, 
of 
accommodation/employment/improved  confidence, 
benefits from switching to a cheaper account) 
Total benefits 

accessibility 

2 million 
consumers 

8 
1 

6.4 million consumers 

10 million consumers 

24 
5 

38 
7 

Not quantifiable 

Not quantifiable 

Not quantifiable 

9 

27 

19 
0 

29 

85 

59 
0 

45 

133 

93 
0 

Not quantifiable 

Not quantifiable 

Not quantifiable 

45 

145 

226 

These figures include both one-off costs and recurring costs. However, in practice, no one-off 
costs  for  unbanked  consumers  have  been  identified  since  the  cost  of  opening  of  a  payment 
account  is  included  in  the  first  annual  fee  which  consumer  has  to  pay  for  the  account 
maintenance.  All  costs  incurred  by  consumers  are  therefore  recurring  costs.  The  recurring 
costs borne by consumers are those in Variants A and B above, and also:  

• 

It  is  possible  that  an  account  with  a  minimum  balance  that  cannot  be  seized  could 
slightly increase the cost of a basic payment account for consumers since banks may 
want to charge consumers for this additional feature, but this cost is not quantifiable. 

Consumers will also face recurring annual benefits of between EUR 45 – 226 million. Under 
this Option, the benefits would however be at the lower end of the scale as the reduction in the 
number of unbanked consumers is expected to be very  small. The  annual  recurring benefits 
are those in Variants A and B above. 
Payment services providers 
Payment  account  providers  will  face  total  costs  of  between  EUR  6  million  and  EUR  30 
million in the first year. These costs consist of annual recurring costs and one-off costs. The 
annual recurring costs are account operation costs. It is possible that a basic payment account 
with a minimum balance that cannot be seized could slightly increase the cost of operation of 
a basic payment account for providers, but this cost is not quantifiable. 

Table 2.CC: Incremental cost and benefits for providers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training). 
Total costs 
Benefits 
Recurring annual benefits 

EN 

6 

19 

30 

Not quantifiable 

Not quantifiable 

Not quantifiable 

19 

5 

30 

7 

6 

1 

156 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

Not quantifiable 

Not quantifiable 

Not quantifiable 

1 

5 

7 

Payment services providers would face recurring annual benefits of between EUR 1 million 
and EUR 7 million. There would be the same further, non-quantifiable, benefits as in Option 2 
above.  

Governments 
Member States will face total costs of up to EUR 0.25 million in the first year depending on 
the instrument chosen. Member States will face total benefits of between EUR 1.5 million and 
EUR 7 million in the first year. There would also be non-quantifiable benefits in terms of less 
fraud associated with paper systems and less costly local tax collection.  

Table 2.DD: Incremental cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
One off costs of introducing legislation 
Recurring costs of monitoring and supervising 
application 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (less benefit and tax fraud) 
Total benefits 

0.09 

0.16 

0.25 

1.5 
Not quantifiable 
1.5 

5 
Not quantifiable 
5 

7 
Not quantifiable 
7 

Other stakeholders – utility firms 
Utilities  providers  will  face  incremental  benefits  of  between  EUR  3  million  and  EUR  13 
million in the first year (expected to be at the lower end of the scale) as the reduction in the 
number of unbanked citizens is expected to be relatively low.  

Table 2.EE: Incremental benefits for utility firms from lower transaction costs 

2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1,5/transaction 

3 

9 

13 

5.4.4.  Variant D: Ensure that the features of payment account are not of a discriminatory 

nature. 

Effectiveness of policy option 
This would contribute to a reduction in the number of unbanked consumers. Depending on the 
effectiveness of Option 2, it should also improve the quality of consumers' access to certain 
basic account services, especially in the cross-border context. 
This option would be effective in ensuring that basic payment accounts offered by banks, both 
to residents and non-residents, do not contain any discriminatory conditions, e.g. they do not 
prohibit  the  use  of  certain  payment  services  in  another  Member  State.  This  would  certainly 
give consumers more confidence and attract more users since they could easily use their basic 
payment  account  not  only  in  a  national,  but  also  in  a  cross-border  dimension  without 
distinctions being made.  This would encourage users to check for cross-border offers of basic 
financial  services,  thus  contributing  to  the  Single  Market  for  retail  financial  services. 
Nevertheless, consumers would not have access to all basic payment means and they would 
need  to  pay  for  these  additionally,  for  example,  no  facility  for  online  purchases  or  internet 
banking is envisaged under this option. 
It would also be easier for providers to offer services in other Member States since the rules, 
based  on  the  same  principles  of  the  Recommendation  (Option  2),  would  not  differ 

EN 

157 

   EN 

 
 
 
 
 
 
 
 
substantially  from  one  country  to  another.  This  would  create  a  more  level  playing  field  for 
providers of basic payment accounts. 
Depending  on  the  policy  instrument  chosen  and  assuming  that  this  option  would  introduce 
common general rules on the right of access across the EU (based on the implementation of 
the  Recommendation),  Member  States  would  still  be  given  the  flexibility  necessary  to 
recognise different conditions at national level. 
Impacts of policy option on stakeholders and efficiency 
This option would bring particular benefits to consumers who could use their basic payment 
accounts (e.g. debit cards, bank transfers) easily and under the same conditions across the EU. 
This  is  broadly  supported  by  users'  representatives.484  This  would  give  consumers  more 
freedom  and  potentially  benefits  from  shopping  in  other  Member  States,  even  if  online 
shopping  would  not  be  guaranteed  under  this  option.  This  option  is  not  likely  to  bring  any 
major benefits to e-commerce businesses. However, the reduction in the number of unbanked 
citizens could benefit businesses through a reduction in the use of cash. 
Under  this  option,  providers  would  bear  the  costs  necessary  to  ensure  that  a  basic  payment 
account operates under the same conditions at national and EU level. For example, consumers 
would be able to use their debit cards freely in other Member States without additional fees as 
well  as  make  payments  and  transfers  just  like  domestically.  Such  conditions  are  a  standard 
with  a  regular  payment  account  in  the  EU,  but since  a  basic  payment  account  is  a  low-cost 
product,  banks  may  want  to  avoid  offering  the  same  conditions  for  this  product  in  order  to 
reduce costs. This situation was observed, for instance, in the Netherlands.485 Further, higher 
costs for banks implied by this option may discourage them from operating in other Member 
States due to the potentially low or non-existent profitability of cross-border activity. 
Member States would incur costs related to the implementation and enforcement of these new 
rules banning the discriminatory practices of banks. Public institutions would save by paying 
benefits to payment accounts of beneficiaries instead of using more costly means. 
Finally,  society  as  a  whole  would  benefit  from  economic  development  and  growth  due  to  a 
reduction in the number of unbanked citizens. It would also help to create a more efficient and 
mobile  population  as  consumers  would  be  able  to  use  payment  services  throughout  the  EU 
more easily. 
Quantification of costs and benefits 
The impacts of this policy option would largely be dependent on the degree of application of 
the  provisions  of  the  Recommendation  (Option  2).  In  general,  the  same  impacts  as  those 
described  under  Option  2  would  be  felt,  albeit  with  some  differences,  which  are  described 
below.  The  use  of  a  basic  payment  account  (e.g.  debit  card)  could  not  be  restricted  by  the 
provider to the country where the account is opened. Consumer would be able to make use of 
the  basic  payment  account  in  all  EU  Member  States  while  providers  would  be  allowed  to 
impose additional, but not unreasonable, fees for the use of the account. As such, the figures 
provided illustrate the estimated incremental costs and benefits of this option compared with 
Option  2.  For  the  calculation  of  the  potential  costs  and  benefits  of  this  policy  option,  no 
discount  factor  is  applied:  no  Member  State  has  introduced  non-discriminatory  rules  with 
regards  to  account  use  at  both  national  and  cross-border  levels.  Thus,  it  is  assumed  that  all 
Member States would be affected by this policy option. 
Consumers 

484  BEUC response to the Commission Consultation on access to a basic payment account, 25.01.2011, p. 7, 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm  
Information provided to the Commission by Member States. 

485 

EN 

158 

   EN 

                                                 
Consumers will face total costs of between EUR 22 million and EUR 108 million in the first 
year (likely to be at the mid- to upper-end of this), as the reduction in the number of unbanked 
(at  least  relative  to  Option  2)  is  expected  to  be  relatively  high.  This  is  due  to  fact  that 
consumers  will  be  able  to  use  the  basic  payment  account  in  the  whole  EU  which  may  be 
especially useful to migrant consumers. 

Table 2.FF: Incremental cost and benefits for consumers (EUR millions) 

Costs 
Account operation costs 
Failed transaction costs 
Other costs (e.g. risk of account fraud, risk of seizure of 
funds) 
Total costs 
Benefits 
Benefits from reduced use of money transmission and 
cheques 
Benefits through discounts for electronic payments 
Benefits through discounts for online purchases 
Other benefits (increased accessibility of funds, reduced 
risk  of  theft,  increased  choice  of  goods  and  services, 
accessibility  of  accommodation/employment/improved 
confidence,  benefits  from  switching  to  a  cheaper 
account) 
Total benefits 

2 million 
consumers 

19 
2 

6.4 million consumers 

10 million consumers 

62 
7 

97 
11 

Not quantifiable 

Not quantifiable 

Not quantifiable 

22 

40 

28 
0 

69  

128 

89 
0 

108 

200 

139 
0 

Not quantifiable 

Not quantifiable 

Not quantifiable 

68 

217 

339 

These figures include both one-off costs and recurring costs. However, in practice, no one-off 
costs  for  unbanked  consumers  have  been  identified,  since  the  cost  of  opening  of  a  payment 
account  is  included  in  the  first  annual  fee  which  consumer  has  to  pay  for  account 
maintenance.  All  costs  incurred  by  consumers  are  therefore  recurring  costs.  The  recurring 
costs are those in Variants A, B and C above, and also: 

It is possible that a basic account of which use is not limited to the country where it is opened 
could slightly increase its cost for consumers since banks may want to charge consumers for 
the possibility to use the account abroad. This cost is however not quantifiable and in addition 
it  is  possible  that  in  fact  in  many  Member  States  the  cost  of  an  annual  maintenance  of  a 
payment account estimated at EUR 51 would already cover the possibility to use the account 
abroad. 

Consumers will also face recurring annual benefits of between EUR 68 million and EUR 339 
million (likely to be at the mid- to upper-end of the scale) as the reduction in the number of 
unbanked (at least relative to Option 2) is expected to be relatively high. This is due to fact 
that consumers will be able to use the basic payment account in the whole EU which may be 
especially useful to migrant consumers.  The annual recurring benefits are those in Variants 
A, B and C above. 
Payment services providers 
Payment account providers will face total incremental costs of between EUR 19 million and 
EUR  94  million  in  the  first  year.  These  costs  consist  of  annual  recurring  costs  and  one-off 
costs. The annual recurring costs are account operation costs. A basic payment account which 
can be used identically across the EU could increase the cost of operation of a basic payment 
account for providers, but this cost is not quantifiable. Payment services providers would face 
negative annual benefits of up to EUR -9 million. This is because there would be lower profits 
as revenues declined due to higher costs of managing cross-border transactions.  

Table 2.GG: Incremental cost and benefits for providers (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 

EN 

159 

   EN 

 
 
 
 
 
 
 
 
 
 
 
Annual account operation costs 
Other costs (modifying IT systems, internal 
procedures, staff training, lost revenues). 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (increased customer base, 
reduced cost of cash, increased capital base, 
improved reputation) 
Total benefits 

19 

60 

94 

Not quantifiable 

Not quantifiable 

Not quantifiable 

19 

-1.8 

60 

-6 

94 

-9 

Not quantifiable 

Not quantifiable 

Not quantifiable 

-1.8 

-6 

-9 

Governments 
Member States will face total costs of up to EUR 0.38 million in the first year. Member States 
will face incremental benefits of between EUR 2 million and EUR 11 million in the first year 
above  the  costs  of  Option  2.  There  would  also  be  non-quantifiable  benefits  in  terms  of  less 
fraud associated with paper systems and less costly local tax collection. 

Table 2.HH: Incremental cost and benefits for Member States (EUR millions) 

2 million consumers 

6.4 million consumers 

10 million consumers 

Costs 
One off costs of introducing legislation 
Recurring costs of monitoring and supervising 
application 
Total costs 
Benefits 
Recurring annual benefits 
Other benefits (less benefit and tax fraud) 
Total benefits 

0.14 

0.24 

0.38 

2 
Not quantifiable 
2 

7 
Not quantifiable 
7 

11 
Not quantifiable 
11 

Other stakeholders – utility firms 
Utilities  providers  will  face 
EUR 20 million annually (expected to be closer to the upper-end of the scale). 

incremental  benefits  of  between  EUR 4 million  and 

Table 2.II: Incremental benefits for utility firms from lower transaction costs 

2 million consumers 

6.4 million consumers 

10 million consumers 

EUR 1.5/transaction 

4 

13 

20 

EN 

160 

   EN 

 
 
 
 
 
 
 
 
 
 
 
ANNEX III 
PRESENTATION AND EASE OF COMPARISON OF BANK FEES  

1. 

EXISTING POLICY AND LEGISLATIVE FRAMEWORK 

1.1.  Member State level initiatives 
The  2011  study  on  bank  fee  information  at  national  level486  carried  out  on  behalf  of  the 
European Commission provided an EU-wide inventory of initiatives addressed at improving 
transparency and comparability of payment account fees. These are detailed below.  
Glossaries or standard terminologies487 
In 2011, 65 glossaries were in place in the EU.488 An increasing number of initiatives relating 
to  glossaries  over  time  have  been  observed  across  Member  States:  16  glossaries  date  from 
between 2001 and 2007 and following the financial crisis, 19 initiatives have been launched 
since 2008, with 9 from 2009 or later. 
None  of  the  glossaries  identified  were  specific  to  bank  current  accounts  and  generally 
encompassed  different  types  of  accounts  (current,  savings,  etc.)  as  well  as  general  financial 
terms  (including  at  macro  level).  A  glossary  specific  to  cards  terminology  is  in  place  in 
Slovenia. Glossaries vary significantly according to the accounts concerned (current, savings, 
etc.), the targets (consumers versus professionals) and the type of format (simple list of terms 
versus interactive tools).  
No glossary was backed by legislation, except for the broader initiatives in Italy and Portugal 
encompassing  disclosure  of  information  on  fees.  For  59  glossaries,  information  on  the 
organisations that had produced the glossary is available. The initiators of these initiatives are 
distributed  as  follows:  24  glossaries  (40%)  are  issued  by  commercial  entities  (including 
financial portals, financial advisers, commercial websites) of which 4 are banks; 15 (25%) are 
issued  by  authorities  and  regulators  of  which  8  are  central  banks;  10  (17%)  are  issued  by 
banking associations; 8 (14%) are issued by non-profit associations of which 4 are consumer 
associations  and  2  (3%)  are  jointly  issued  by  a  banking  association  and  a  consumer 
association.  Glossaries  are  not  in  place  (either  through  legislation  or  via  a  voluntary 
commitment)  in  the  following  member  States:  Cyprus,  Germany,  Lithuania,  Luxembourg, 
Netherlands, Poland and Sweden. 
Glossaries  targeting  foreign  consumers  and  providing  a  translation  of  terms  into  other 
languages, in addition to definitions, are operating in the Czech Republic, Italy, Portugal and 
Slovakia. 
Generally,  none  of  the  glossaries  represent  standard  terms  that  are  binding  for  the  financial 
sector,  e.g.  in  lists  of  fees  communicated  to  consumers.  Belgium  and  Italy  make  two 
exceptions, as the initiatives in these countries aim at increasing transparency of lists of fees.  
Examples: 
In Belgium, a self-regulatory initiative on a common glossary is currently being prepared by the financial sector with the aim 
of having lists of fees based on the terminology used in this glossary. 

486  Market study of the current state of play in Member States regarding initiatives in bank fee transparency and 

487 

comparability in personal current bank accounts, Van Dijk Management consultants, 2011, 
http://ec.europa.eu/consumers/rights/docs/1912012_market_study_en.pdf. 
Initiatives on glossaries that are owned by a single financial institution (e.g. in Finland and Ireland) are not considered. 
These glossaries solely cover terms used by a single bank, which may increase transparency for a better understanding 
of list of fees of that particular bank; however if all banks adopt this practice without concerting on a common glossary, 
it may hinder comparability of fees between banks. Glossaries targeting solely professionals, i.e. comprising 
exceedingly specific terms and complex definitions, were excluded from the initiatives as these do not target consumers 
at large and were considered to be hardly understandable for the average consumer. 

488  The survey conducted by this study included Norway. 

EN 

161 

   EN 

                                                 
A law in Italy provides that a glossary of terms must be included at the end of the list of fees. The glossary contains the same 
15  terms,  standardised  for  all  banks  and  for  all  payment  accounts  offered  to  consumers.  The  glossary  has  been  drafted  in 
cooperation with experts in communications, to ensure that the explanations are clear, understandable and user friendly. 
Ireland's  consumer  agency  created  the  “It’s  your  money”  website  focusing  on  money  matters  and  financial  services,  also 
including a glossary, a comparison tool and an information initiative. 
In Malta the financial regulator created “My Money Box” an initiative providing a glossary, a comparison tool and financial 
information. This tool is perceived to be a very efficient and effective way to compare bank charges. 
The Slovak Ministry of Finance has set up a website, “Fininfo”, focusing on money matters and financial services. It includes 
a glossary, financial education tools (e.g. financial literacy test) and information for consumers. 
In  the  Netherlands,  particular  attention  is  devoted  to  financially  excluded,  illiterate  and  elderly  people  who  have  more 
difficulty using the internet. Such focus and the limited number of initiatives identified might be related to the fact that in the 
Netherlands the retail banking fees are among the lowest in Europe and there is no issue related to the lack of transparency 
and comparability. 

Type of initiative 

Countries  

Table 3.A: Glossaries 

Legislative 

Italy  

Self-regulation 
Non legislative intervention 

Belgium 
Austria, Bulgaria, the Czech Republic, Denmark, 
Estonia, Greece, Spain, Finland, France, 
Hungary, Ireland, Latvia, Malta, Portugal, 
Romania, Slovenia, Slovakia and United 
Kingdom 

No intervention 

Cyprus, Lithuania, Luxembourg, Netherlands, 
Poland and Sweden 

Disclosure of information on fees 
This type of initiative includes obligations to disclose lists of fees and standard sheets for the 
presentation  of  tariffs.  For  the  disclosure  of  information,  the  period  2009  -  2011  shows  a 
particular development in the use of these initiatives: 12 initiatives originate during the 90s, 
15 initiatives were initiated between 2000 and 2008, and 19 since 2009.  
Out  of  43  initiatives  for  which  the  information  is  available,  25  (58%)  correspond  to  a  legal 
obligation while 18 (42%) result from self-commitment (e.g. through banking codes) by the 
financial  sector.  Legal  obligations  were  more  numerous  than  other  types  of  initiatives  until 
2008, while there has been a balance between the two approaches since 2009. Whether legally 
binding  or  voluntary,  these  initiatives  aim  to  provide  information  in  a  standard  format  by 
making available up-to-date lists of fees at bank branches and/or on websites. In many cases, 
these  initiatives  are  specific  to  neither  current  accounts  nor  to  transparency  requirements  as 
they set out general rules of conduct of banks towards customers. No initiatives on disclosure 
are in place in Lithuania and Poland. 
Examples: 
France  and  the  UK  (and  to  some  extent  of  Italy,  Belgium  and  Portugal)  reflect  recent  initiatives  that  go  beyond  the  sole 
obligation to display lists of fees: they specifically aim at increasing the transparency and comparability of bank fees through 
a  certain  degree  of  standardisation  of  the  structure  and/or  wording  of  the  presentation  of  lists  of  fees  and/or  of 
monthly/annual statements of fees paid. 

489

490

In France
and monitored ex-post by authorities thus favouring effective market implementation. 

 and the UK

 initiatives also have the advantage of being based on self-commitment by industry, but steered 

489  Recent initiatives from the Comité Consultatif du Secteur Financier and the Conseil Français de Normalisation 
Bancaire were launched regarding the disclosure of banking fees on monthly statements, harmonisation of the 
terminology of monthly statements and harmonisation of commercial brochures, as well as the legal obligation 
concerning the annual statement of bank fees issued in 2009. These initiatives are based on self-commitment by 
industry, but steered and monitored ex-post by authorities. 

490  An initiative on self-regulation has been launched by personal current account providers under the pressure of the Office 
of Fair Trading. It specifically aims at increasing transparency and comparability through commitments related to 
disclosure of lists of fees. This initiative is based on self-commitment by the industry, but steered and monitored ex-post 
by authorities. 

EN 

162 

   EN 

 
 
 
                                                 
Type of initiative 

Table 3.B: Disclosure of list of fees 
Countries  

Legislative 

Austria, Belgium, Bulgaria, the Czech Republic, 
Denmark, Germany, Greece, Hungary, Italy, 
Luxembourg, Latvia, Malta, Portugal, Sweden, 
Slovenia, and Slovakia 

France, UK 

Self-regulation 
Non legislative intervention 

No intervention 

Cyprus, Spain, Estonia, Finland, Ireland, 
Netherlands, Romania 
Lithuania and Poland 

Comparison tools 
This  type  of  initiative  covers  the  list  of  fees  and  interactive  tools  aimed  at  facilitating  an 
informed choice amongst different offers proposed by banks. Most initiatives are operated by 
for-profit  organisations.  Approximately  30%  are  run  by  public  authorities,  not-for-profit 
organisations, or in collaboration between for-profit and not-for-profit organisations. 
A total of 126 initiatives were identified in the EU. For 66 tools (52%), information about the 
duration of their operation was not available. Of the remaining 60 tools, a large majority (41 
or 68%) came into operation between 2005 and 2010 and one tool started to operate in 2012. 
Comparison  tools  are  present  in  all  countries  surveyed,  with  the  exception  of  Luxembourg, 
and  they  are  one  of  the  two  most  common  initiatives:  26%  overall  and  close  to  50%  in 
Germany, Poland and UK. 
The  only  country  in  which  legislation  has  supported  the  creation  of  a  comparison  tool  is 
Denmark: a tool was set up here by the "Money and Pension Panel", a board established by 
the Danish Parliament in June 2007 (Act No. 576 of 6 June 2007). 

The  number  of  tools  owned  and  run  by  for-profit  organisations  is  approximately  97  (77%). 
Organisations  are  mainly  active  in  advertising/marketing,  internet  publishing,  provision  of 
information  on  finance  or  newspapers.  9  tools  (7%)  run  by  not-for-profit  organisations  (8 
consumer associations and the Arbeiter Kammer in AT) have been identified. 6 tools (5%) are 
run by national banks, 4 (3%) are run by consumer councils and 4 (3%) are run by financial 
supervision authorities. 5 tools (4%) result from cooperation between actors.  

Examples: 
In  Germany,  The  Girokonto  Anbieter  Vergleich  comparison  tool  is  based  on  ratings  from  Stiftung  Warentest,  a  German 
consumer organisation founded by the German government in 1964 and involved in investigating and comparing goods and 
services in an unbiased way. This offers a kind of guarantee of quality and reliability of the information provided by the tool. 
In Italy, the “Pattichiari” website presents a glossary, a comparison tool and financial information while the website of the 
consumer association Altroconsumo includes a comparison tool and financial information. 
In Sweden, the “Konsumenternas” website of the Consumers Bureau for Bank and Finance and the Consumers Bureau for 
Insurance provides a comparison tool and information focusing on money matters and financial services. 
In  Slovenia  and  Slovakia,  banks  have  the obligation  to  provide  updated  lists  of  fees,  which  are used  in  a  comparison  tool 
owned by the authority. 
The five tools resulting from cooperation between relevant actors are: in Belgium, the consumer association runs a tool with 
the assistance from the ministry; in Denmark, the bank association and the Consumer Council run a tool together; in Estonia, 
the  financial  supervision  authority  runs a  tool  in cooperation  with  the  banking association;  in Italy, a  consortium  of  banks 
jointly runs a tool; and in the UK the major banks run a tool developed in cooperation with the Office of Fair Trading. 

Table 3.C: Comparison tools 

Type of initiative 

Countries  

Legislative 

Denmark 

Self-regulation 
Non legislative intervention 

- 
Austria, Belgium, Cyprus, the Czech Republic, 
Germany, Estonia, Greece, Spain, Finland, 
France, Hungary, Ireland, Italy, Lithuania, Latvia, 
Malta, Netherlands, Poland, Portugal, Romania 
Sweden, Slovenia, Slovakia and United Kingdom 

EN 

163 

   EN 

 
 
 
 
 
 
 
 
No intervention 

Luxembourg 

Financial education and information initiatives 
These types of initiatives are very diverse, as are their initiators. Most of them were started 
recently  (57%  since  2008).  None  of  the  initiatives  identified  is  backed  by  legislation.  Few 
initiatives focus on current accounts as such (15 or 12%) and only one of them - in Bulgaria - 
exclusively  focuses  on  fees.  The  majority  (114  or  88%)  have  a  broader  focus  addressing 
money and finance issues (e.g. credit and deposit products), family budget, or the economy. 
Enforcement actions  
Enforcement  actions  involve  making  recommendations  and  imposing  fines.  They  were 
identified specifically in relation to the transparency of bank fees in several countries though 
they are usually utilised as a policy tool for monitoring and making recommendations rather 
than for imposing fines. 
Market studies  
In many countries, stakeholders conduct regular or occasional comparative studies, scoring of 
operators, mystery shopping, etc. These initiatives contribute to providing public authorities 
with a more accurate knowledge basis to support further policy making.  
Combined initiatives 
Amongst all types of initiative identified, several belong to the same owner or initiator. Whilst 
in some cases, these initiatives are run independent of one another, in a number of other cases, 
they are strongly co-dependent on each other. This is particularly true in the case of websites 
combining two or more of the following initiatives: a glossary, a comparison tool, information 
or educational initiatives and market studies or other initiatives, e.g. a petition.  
These websites offer the advantage of having a whole range of information readily available 
and  tools  for  consumers  wishing  to  better  use  and  understand  financial  products,  including 
current  accounts.  The  owners  or  initiators  of  these  websites  were  observed  to  be  public 
authorities  (consumer  agencies,  financial  regulators,  etc.),  consumer  associations  or 
commercial owners. 
Examples: 
In  Estonia,  the  financial  regulator  has  created  the  “Minuraha”  (My  money)  website  which  targets  consumers,  and  which 
includes a glossary, several comparison tables (current accounts, credit cards, etc.), calculators (budget, etc.), education tools 
(e.g.  financial  knowledge  tests),  financial  information  and  results  of  a  consumer  survey  on  financial  consumption  and 
consumer opinion on transparency of fees. It is interesting to highlight that there is also a simplified version of the website for 
young people, “Kool minuraha” (My money School); 
In  Italy  the  website  of  the  consumer  association  Altroconsumo  includes  a  comparison  tool  and  financial  information;  the 
consumer association ZPS provides a website that includes a glossary, a comparison tool and information. 

From this overview of existing national legislation or self-regulation approaches, it emerged 
that: 

• 

• 

Several diversified tools are implemented in each country. These initiatives appear to 
be very different from each other. As underlined by the study, only a very few best 
practices  can  be  identified  among  the  existing  initiatives.  These  include  the 
initiatives taken in Italy and Belgium on glossaries. 

In  absolute  terms,  most  of  the  tools  launched  in  the  EU  are  intended  to  increase 
financial  education  (27%);  conversely,  very  few  are  enforcement  actions.  Several 
comparison tools are set up (26%). However, only 10% of initiatives aim to enhance 
the disclosure of lists of fees and 13% are intended to set up common glossaries. In 
many  cases  it  was  noted  that  comparison  tools  were  used  in  combination  with 
glossaries and lists of fees. This may be due to the fact that standardisation brought 
by glossaries and lists of fees may facilitate comparison.  

EN 

164 

   EN 

• 

• 

• 

• 

With  respect  to  comparison  tools,  the  different  sources  -  mainly  commercial  in 
nature, raise the issue of objectivity regarding the fee information provided by such 
tools. 

The  breakdown  of  data  confirms  the  trends  observed  at  EU  level,  notably  that  in 
most  countries  the  least  common  initiatives  are  those  relating  to  enforcement  (9%) 
and to the disclosure of list of fees (10%). 

Initiatives  aimed  at  disclosing  the  lists  of  fees  are  usually  backed  by  legislation 
(83%). Enforcement actions are entirely backed by legislation. In general, however, 
only a minority of the overall national initiatives (18.5%) are backed by legislation. 

An increase in the number of all initiatives has been observed in recent years. There 
is  a  possibility  that  –  in  addition  to  a  real  increase  in  the  number  initiatives  –  the 
observed  increase  reflects  the  improving  availability  of  information  about  such 
initiatives, due to an increased need for transparency in retail financial services. 

2. 

PROBLEMS 

Data on price variations in the current account market  
The  Commission  conducted  a  study  in  2009.491  The  objective  was  to  determine  the 
transparency of fees charged for a payment account, compare prices for the services linked to 
a payment account and to improve the Commission's understanding of the underlying factors 
behind  price  differences  within  and  across  Member  States.  The  study  covered  all  Member 
States  and  provided  a  comparable  set  of  average  prices  for  payment  accounts.  Table  3.E 
below provides a list of prices for the average domestic profile used in the 2009 Commission 
study adjusted for purchasing power. Prices range from EUR 41.17 in the Netherlands to EUR 
243,64 in Italy. The EU average price is EUR 111.62. 10 Member States have above average 
prices. 
Following  its  publication,  this  study  was  mainly  criticised  because  it  created  eight 
hypothetical  EU  usage  profiles  reflecting  different  consumption  patterns,  which  served  as  a 
basis to derive average prices per Member State. This was a good means to isolate the impact 
of  different  fee  amounts  between  Member  States,  on  a  comparable  basis.  However  the 
disadvantage of this approach was that average prices may not accurately reflect the situation 
in  any  Member  State  given  that  consumption  patterns  used  could  not  reflect  domestic 
consumption patterns accurately. 
The study also reported average prices for domestic profiles, for which underlying transaction 
volumes  were  collected  from  available  domestic  sources.  EU  average  consumption  patterns 
were calculated as the weighted average of domestic consumption volumes. While the use of 
domestic profiles should have produced more realistic results for the annual average cost of 
an  account  within  each  Member  State,  difficulties  encountered  in  collecting  relevant 
information on volumes of transactions to determine domestic usage patterns may have led to 
sub-optimal results. 
Nevertheless,  the  study  provides  a  unique  source  of  comparable  information  on  current 
account prices in EU Member States. It is a valuable source of information for policy-making. 

€ /year 

Austria 
Belgium 

Table 3.D: Weighted average price per profile per country (€/year) 

Domestic profiles 
passive 

average 

active 

basic 

European profiles 
passive 

average 

active 

basic 

99,54 
29,05 

140,47 
58,15 

197,46 
82,07 

83,95 
16,28 

100,63 
30,75 

144,60 
62,41 

206,10 
94,39 

93,68 
16,59 

491  Data collection for prices of current accounts provided to consumers, 2009, Van Dijk Management Consultants. 

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Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
The Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
EU15 
NMS12 
EU27 
Source: Data collection for prices of current accounts provided to consumers, 2009, Van Dijk Management Consultants 

26,94 
84,59 
95,37 
74,27 
50,51 
104,42 
154,11 
89,13 
53,98 
76,20 
81,85 
253,14 
115,24 
34,76 
56,64 
71,85 
45,95 
73,21 
44,89 
82,59 
73,68 
100,40 
178,21 
61,84 
103,20 
112,98 
79,23 
111,62 

42,83 
184,99 
156,52 
128,41 
93,08 
206,56 
232,15 
114,71 
111,67 
144,42 
118,39 
401,72 
192,28 
112,92 
95,99 
99,47 
55,60 
114,01 
81,97 
141,90 
125,08 
200,76 
303,57 
128,21 
111,40 
160,00 
139,85 
159,18 

48,57 
70,41 
112,84 
63,76 
69,39 
82,25 
152,14 
100,34 
109,57 
78,75 
82,99 
295,66 
194,77 
117,29 
73,82 
60,55 
45,87 
71,87 
56,41 
75,36 
103,52 
84,61 
211,56 
66,94 
77,46 
115,18 
86,09 
114,00 

17,14 
6,52 
39,65 
37,92 
25,57 
44,65 
91,35 
62,85 
14,81 
28,39 
56,40 
134,99 
63,26 
11,20 
40,37 
53,21 
30,13 
45,97 
26,01 
30,28 
44,49 
43,50 
104,72 
25,16 
94,99 
76,10 
34,57 
74,41 

9,30 
48,74 
54,81 
38,91 
46,98 
94,04 
91,21 
78,92 
45,06 
64,08 
37,17 
143,19 
107,33 
14,69 
25,64 
45,38 
28,85 
50,55 
13,19 
69,79 
55,59 
70,13 
134,06 
53,35 
28,34 
61,76 
54,85 
61,47 

16,78 
6,45 
41,11 
33,69 
27,38 
45,00 
92,45 
66,16 
14,13 
28,19 
58,30 
117,02 
68,59 
21,02 
40,55 
51,79 
30,10 
44,43 
27,29 
21,20 
48,01 
44,32 
101,94 
25,77 
64,96 
67,01 
34,33 
65,68 

108,29 
201,12 
196,18 
105,35 
137,67 
150,06 
226,43 
145,41 
292,07 
149,99 
134,36 
602,70 
407,86 
260,77 
135,83 
79,93 
55,52 
116,11 
114,59 
163,01 
195,74 
157,16 
411,66 
147,41 
86,70 
187,28 
166,67 
186,45 

17,32 
70,51 
74,87 
29,19 
71,33 
67,00 
80,51 
86,16 
98,34 
75,10 
40,77 
210,05 
218,98 
120,49 
56,81 
41,21 
29,17 
50,24 
26,81 
64,51 
88,61 
54,15 
193,14 
59,16 
32,54 
75,24 
69,34 
74,98 

Table 3.E: PPP adjusted weighted average price domestic average profile per country (€/year) 

Member State 

Italy 

Spain 

Latvia 

Romania 

Czech Republic 

France 

Poland 

Hungary 

Austria 

Slovenia 

EU 

Slovakia 

United Kingdom 

Malta 

Cyprus 

Finland 

Germany  

Estonia 

Ireland 

Bulgaria 

Greece 

Lithuania 

Sweden 

Portugal 

Average 
Prices € 

Price level 
indices 
(EU27=100) 

PPP Adjusted 
Prices € 

Rank Highest 
First 

253,14 

178,21 

115,24 

82,59 

95,37 

154,11 

73,21 

76,2 

140,47 

100,4 

111,62 

73,68 

103,2 

71,85 

84,59 

104,42 

89,13 

50,51 

81,85 

26,94 

53,98 

34,76 

61,84 

44,89 

103,9 

94,2 

68,2 

49,8 

69,8 

115,2 

57,1 

60 

112,3 

84,5 

100 

68,1 

97,4 

72,9 

89,8 

120,1 

106,7 

69,2 

120 

44,5 

92,7 

62,3 

111,8 

84,3 

243,64 

189,18 

168,97 

165,84 

136,63 

133,78 

128,21 

127 

125,08 

118,82 

111,62 

108,19 

105,95 

98,56 

94,2 

86,94 

83,53 

72,99 

68,21 

60,54 

58,23 

55,79 

55,31 

53,25 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

 - 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

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Denmark 

Belgium 

Luxembourg 

Netherlands 

74,27 

58,15 

56,64 

45,95 

140,5 

114,1 

120,2 

111,6 

52,86 

50,96 

47,12 

41,17 

24 

25 

26 

27 

Source: 2009 VDMC Study (Prices); Eurostat (Price Level Indices) 

Other national studies have provided different values for average prices of payment accounts. 
A study carried out in Italy in 2011492 calculated the average price of a payment account at 
approximately EUR 110.2 (2009: EUR 113.6; 2008: EUR 114.3), which is far below the cost 
calculated  in  the  Commission  study.  These  differences  do  not  necessarily  result  from 
inaccuracies in the different methodologies used, but rather reflect differences in the approach 
used to determine a relevant basket of services, identify usage profiles and collect information 
on prices.  
A  study  carried  out  in  France  in  2010493  was  based  on  a  similar  methodology  as  the 
Commission's study above, but was limited to comparing average prices for Belgium, France, 
Germany, Italy, Netherlands, Spain and the United Kingdom. The study attempted to adjust 
the weaknesses it identified in the methodology used in the Commission's study. This study 
identified  significant  price  variation  between  the  countries  analysed.  Average  prices  of  a 
payment account reported were as follows: Italy (EUR 191); Spain (EUR 177); France (EUR 
157);  Germany  (EUR  133);  Belgium  (EUR  116);  United  Kingdom  (EUR114);  Netherlands 
(EUR 68). The average price for the sample stood at EUR 137. Although these amounts were 
calculated  after  having  been  adjusted  for  methodological  weaknesses  identified  in  the 
Commission study above, they broadly exhibit the same variation as the Commission's prior 
results. 
Pricing Models 
We  have  applied  the  models  in  Table  IV  of  Chapter  2  of  the  main  Impact  Assessment  to 
selected  Members  States  to  identify  prevailing  pricing  models  and  main  sources  of  fee 
revenue. This information is summarised in table 3.4 below.  

492

  Indagine 2011 Sul Costo Dei Conti Correnti Bancari, Banca D'Italia 

493  Rapport de Georges Pauget et Emmanuel Constans sur la tarification des services bancaires", 07/2010 

(http://www.ladocumentationfrancaise.fr/var/storage/rapports-publics/ 104000365/0000.pdf) 

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Member State 

Prevailing pricing models 

Table 3.F: Prevailing pricing characteristics in selected Member States 

Austria 

Belgium 

Bulgaria 

Germany 

Denmark 

Spain 

Many packaged and bundled offers that incorporate specific services or benefits tailored to customer needs 
Majority of banks offer different types of current account pricing models that range from free current accounts that have no fixed charges to more  expensive current 
accounts.  

The account based (annual fee model) is the most common one in Belgium, although some offers may include fees for operations such as withdrawal at the counter 
or paper-based credit transfers. 
Indirect revenue based (free-if-in-credit) offers have appeared recently. 
Current accounts represented 27% of the Belgian retail banking sector gross income in 2009, which was the same as the EU average. 

–  Bulgarian banks charge for all cash withdrawals, both at the branch and ATM, and with €9 profit per retail current account. 
–  Different pricing models, e.g. monthly and transaction-based fee models (most common), packaged/ bundled offerings etc. are applied by 

banks. 

–  Packaged-based pricing model is most common. 

–  Packaged / bundled offerings make it difficult for customers to compare prices. 

–  A number of pricing models are used including transaction based, account based or indirect-fee based (free if in credit). 

Bank profitability derived from current accounts is not important in Spain compared to other sources of income in the retail banking sector, in particular compared to 
mortgages (at least before the crisis). 

–  General profitability of the banking sector fell significantly between 2008 and 2012. 

Finland 

–  Package-based pricing model 

It is customary that a person’s main current account is within the same bank where they have their mortgage, although this is not a rule, more like a convenience. As 
the banks offer similar products, main competition is on mortgages that often determine the credit institutions where a person holds their current account. This is also 
because if a customer has their mortgage in the same bank as their current account, they often receive a discount on their basic banking charges through a ‘loyal 
customer’ or a bonus programme offered by the bank. 
Cross-subsidisation. A study conducted by Bank of Finland regarding banks’ costs and revenues on retail payments indicates that banks can cover only about half of 
their total costs on payments with direct payment revenues from their clients. In addition to service fees, costs on retail payments are covered from interest margin 
revenues and other loan client fees. 

France 

–  Package-based and transactions-based  

Margin on payment incidents is 83% on average, with the highest figure being for penalty charges (90%). According to UFC’s estimations, those penalty charges 
bring 1.8 Billion Euros to French banks. Some industry representatives assert this figure is about 3.5 Billion Euros. 
In France, mortgages provide lower margins for banks – mortgages are typically used as a flagship product to attract and retain a customer in a highly competitive 
market. At the same time, remuneration of many savings products is highly regulated. Day to day banking is therefore more expensive – it represents a larger share of 
banks’ revenue (20% of net bank product against 14% in Germany and less than 10% in other Eurozone countries). 

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Italy 

Latvia 

Lithuania 

Luxembourg 

Netherlands 

Poland 

Portugal 

United 
Kingdom 

Payment accounts have a “minimum cost” for clients of 34,20 / account corresponding to a tax levy charged for current accounts. This levy is usually charged in 
instalments every quarter.  
Most payment accounts use a transaction based pricing model where the customer pays for the services and products offered (fixed charges) such as the debit card, 
credit card, internet access, etc. 

–  Most banks seem to use a combination of transaction based model with the indirect revenue based (free-if-in-credit) model and in few cases 

monthly fees. 

–  Transaction based model 
– 
–  The emergence of cost based pricing models due to public authorities’ concern that consumers should be consistently guided to cost-efficient 

In 2011, introduction of optional package pricing by payment service providers. 

solutions. 

–  Transaction (Fee) based model 

Package-based. Pricing of the most common products (received/ sent credit transfers, direct debits, debit cards, etc.) is based on a monthly or yearly fee and 
transactions are not individually priced. 

–  Banks generally lose money on payment services but this is normally offset by customers that take out additional products i.e. mortgages. 

Most banks pursue transaction-based model charging customers per transaction (or block of transactions), for instance per direct debit or domestic transfers. For 
certain type of personal accounts, monthly fees may be a main source of income while most of transactions are free of charge. 

–  Mortgages are the main profitability driver for banks. 

–  Account-based i.e. based on balance  
–  Quarterly fees paid by customers on basis of average credit balance in current accounts. 
–  The higher the balance the lower the fees. 
–  No fees, if balance higher than a certain amount (circa €3,500). 

–  Most popular model is indirect revenue-based (free-if-in-credit). 
–  Fee based model – packaged services. 
–  Transaction based model – mainly prevalent in N. Ireland. 
–  Current accounts are gateway products. 
–  Evidence suggests (although likely to vary according to bank) that current account provision is not profitable on a stand-alone basis. 

Source: Study on the economic impact of bank free transparency and switching options (See Annex I, par. 1.1) 

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3. 

CONSEQUENCES 

3.1. 

Consequences for Consumers 

Low consumer confidence 
As  mentioned  in  the  problems  section  above,  consumer  confidence  is  dented  by  the 
appearance of a weak relationship between the price of an account and the underlying cost of 
providing  it.  This  perception  is  strengthened  by  product  cross-subsidisation,  where  profits 
generated from a financial product are used to subsidise a loss maker. In this case consumers 
tend to focus their attention on higher priced items and perceive charges as unfair. Customer 
cross-subsidisation  is  a  practice  which  often  affects  lower  income  earners  and  more 
vulnerable sections of society in what is perceived by consumers as a means to increase profit 
levels for credit institutions.  
However  this  is  not  only  a  perception  issue.  Broad  price  differentials  are  observed  for 
comparable  payment  account  offers  within  Member  States  domestic  markets  raising  real 
doubts as to the proper functioning of market forces. 
Risk of consumer detriment 
While many payment accounts offer equal or only a marginally different mix of services, they 
are  not  a  homogeneous  product.  First  they  are  heavily  branded  and  are  often  differentiated 
through the use of product-specific terminology. Second credit institutions do not establish the 
price  of  a  payment  account  based  on  their  input  costs,  but  take  account  of  a  wide  range  of 
variables  such  as  the  ability  to  cross-sell  other  products  within  their  range,  the  ability  to 
establish long-standing bank-customer relationships.  
Third  consumers  have  difficulty  understanding  information  about  payment  account  offers. 
This  results  in  sub-optimal  market  outcomes  and  a  loss  in  consumer  welfare.  This  happens 
either when consumers purchase a payment account that does not match their needs or when 
they pay more than they would have for the same product had they been better informed. 
Restricted product choice 
Information  asymmetry  raises  search  costs  for  consumers  and  the  difficulty  in  comparing 
bank  offers  discourages  shopping  around  for  a  payment  account,  as  many  consumers  reach 
the conclusion that bank accounts are all the same.494 
Product choice is not only exercised upon a first time purchase but should also be available to 
consumers who may consider moving their account to another credit institution. 

3.2. 

Consequences for banks 

Barriers to market entry and expansion 
Different  regulatory  frameworks  and  bank  infrastructures  established  along  national 
boundaries  contribute  to  the  fragmentation  of  the  market  and  raise  barriers  to  entry  across 
borders. Access to cross border markets involves the cost of setting up infrastructure or taking 
over existing ones as well as to adapt to different levels of compliance and regulation together 
with  adapting  to  different  market  conditions,  prevailing  pricing  structures  as  well  as  other 
costs  related  to  entering  a  market  such  as  marketing.  The  experience  of  Banco  Santander's 
internationalisation  strategy  provides  a  good  example  of  credit  institutions  who  have 
undertaken  growth  strategies  cross-border.  When  planning  to  establish  its  presence  across 

494  Review of barriers to entry, expansion and exit in retail, OFT, November 2010, available at: 

http://www.oft.gov.uk/OFTwork/markets-work/othermarketswork/review-barriers/  

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continental  Europe  during  the  1990s  Banco  Santander  saw  Europe  as  several  different 
markets with high entry barriers, rather than as a single banking and financial market.495  
The  degree  of  economies  of  scale  that  can  be  achieved  by  for  example  setting  up  common 
infrastructures for legal compliance and back office operations is significantly hindered by the 
wide variations in regulatory requirements within the EU.  

3.3. 

Summary of problems and consequences 

Table 3.G: Problems and consequences 

Problems 

Consequences 

• 

• 

• 
• 

• 

Complex products and fee structures  
=> A wide range of fees 
=> Complex pricing models 
=> Unclear and non-comparable information on services 
and fees 
Price dispersion in payment accounts within and across 
Member States; prices unrelated to underlying costs  
Psychological factors (negative perceptions) 
Ineffective, inconsistent or non-existent regulatory 
framework 
Varying degrees of consumer protection across the EU 

• 

• 

• 

• 

Risk of consumer detriment 
=>  information  asymmetries  increase  and  consumers  find  it 
harder to take informed purchase decisions 
=> non-comparable pricing may prevent efficient competition 
=>  consumers  purchase  a  payment  account  that  does  not  match 
their needs or does not provide value for money 
=> reduced consumer confidence 

Restricted cross-border activity 
=> regulatory and market differences hinder the internal market 
=>  increased  costs  for  credit  institutions  operating  in  several 
Member States 
=> Non-level playing field between market actors  
=> Restricted market entry/expansion 
=> Missed business opportunities 
Restricted product choice 
=>  reduced  product  choice  for  financial  and  non-financial 
products and services 
=>  higher  prices  for  financial  and  non-financial  products  and 
services 
=>  higher costs of shopping around 
Low consumer satisfaction  
=> lower consumer confidence 

4. 

OBJECTIVES  

The  over-arching  objective  of  this  initiative  is  to  create  an  efficient  and  competitive  Single 
Market (Article 114.1 of the Treaty) with a high level of consumer protection (Article 114.3 
of the Treaty) that fosters economic growth while improving social inclusion. 
The general objectives of the three problem areas are: 

• 

• 

• 

• 

• 

enhancing consumer confidence; 

broadening  consumer  choice  both  in  terms  of  the  quality  of  the  products  available 
and in terms of price reductions; 

facilitating financial inclusion and thereafter customer mobility; 

facilitating the cross-border activity of payment account providers; and 

ensuring a level playing field between market actors. 

In  relation  to  ease  of  comparison  of  bank  fees,  the  specific  objective  is  to  ensure  that  EU 
consumers receive clear, complete and comparable information on bank fees. 
The operational objectives are to ensure that: 

495

  The Internationalisation of Retail Banking: Banco Santander’s Journey towards Globalisation - Long Range Planning 42 

(2009) 654 e 677. 

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• 

• 

• 

• 

• 

Consumers are able to understand bank offers and assess value for money 

Payment account offers are easily comparable 

Help consumers choosing the offer best matching their needs 

Increase consumers awareness of charges actually paid 

The burden of switching to consumers is reduced 

5. 

POLICY OPTIONS, IMPACT ANALYSIS AND COMPARISON 

5.1. 

Description of the options for policy instruments 

Each  of  the  above  options  could  be  given  effect  through  a  variety  of  different  policy 
instruments.  These  include  an  industry  self-regulation  (Code  of  Conduct),  Community  level 
non-binding measures such as a Recommendation or Communication, or binding Community 
measures such as Community legislation in the form of a Regulation or Directive. Table 3.6 
explores  the  feasibility  of  giving  effect  to  each  of  our  policy  options  through  each  of  the 
available policy instruments. 

Policy options: 
content vs instrument 
1. No action 
2. Standard price list 

3. National glossaries for fee terms  

3(A) non-harmonised terminology 

3(B) fully harmonised terminology  

4. Comparison websites  

4(A) Single national website 

4(B) Accreditation scheme 

5. Representative examples 

5(A) set-up by banks 

5(B) prescribed by M. States  

6. Cost simulation 

6(A) set-up by banks 

6(B) prescribed by M. States  

7. EU standardised forms for ex-ante 
information (price list) 

8. Banks obliged to provide ex-post 
information  

9. EU standardised forms for ex-post 
information on fees 

Table 3.H: Description of options for policy instruments 

Self-regulation 

Recommendation 

Communication 

Directive 

Regulation 

0 
X 

X 

X 

X 

X 

X 

X 

0 
X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

0 

0 
X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

0 
X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

5.1.1.  Option 1: No action 

Effectiveness of policy option 
Without  action  the  comparability  and  presentation  of  payment  account  fees  would  not  be 
improved remaining unclear to consumers. The current level of market fragmentation would 
increase  as  Member  States  continue  to  take  uncoordinated  action  to  address  the  issues 
identified  in  the  problem  section.  While  it  is  recognised  that  incremental  –  and  welcome  - 
improvements are being made in some Member States, notably France, the United Kingdom, 
Ireland,  Italy  and  more  recently  Spain  where  recent  measures  enhance  ex-ante  and  ex-post 
presentation  requirements  for  fees,  this  is  not  universal.  The  consequence  of  asymmetric 
development  is  a  broadening  gap  between  consumer  protection  in  Member  States,  which  is 
contrary to the development, long term, of the single market. 

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From  a  policy  and  regulatory  point  of  view  this  option  hinders  regulatory  convergence 
between Member States. It also prevents further integration since the harmonising impact of 
options  presented  below,  albeit  with  a  longer-term  view,  would  not  take  effect.  There  are 
potential  commonalities  brought  about  by  the  development  of  online  distribution  channels 
which increasingly shape the purchasing habits of consumers, their expectations for increased 
convenience and an increasing number services that go beyond historical banking habits set 
within national cultures. These developments will bring about more convergence in the bank-
client relationship, to which EU level regulatory responses may be increasingly appropriate. 
Impacts of policy option on stakeholders and efficiency 
If  no  action  is  taken  then  further  development  of  the  internal  market  for  payment  accounts 
would be hampered.  In  the  longer-term, additional regulatory action at national level would 
render EU action more costly to Member States and the retail banking industry.  In addition, 
the  current  account  market  would  not  take  full  benefit  of  the  advances  at  EU  level  in  the 
payments  market  achieved  through  SEPA.  Citizens  would  not  be  able  to  clearly  distinguish 
between price advantages brought about by SEPA for direct debits and credit transfers if the 
price  of  the  underlying  payment  account  remains  opaque,  continues  to  exhibit  significant 
differences in prices for equivalent payment account offers and remains a complex product. 
Meanwhile  credit  institutions  wishing  to  establish  business  across  borders  will  continue  to 
have  to  comply  with  different  sets  of  rules  and  incur  costs  in  adapting  their  processes  and 
operations to different national requirements. Consumers living in Member States where bank 
infrastructures are less developed and the provision of daily banking services is more costly 
will  not  benefit  from  the  arrival  of  new  market  entrants  who  operate  lean  processes  and 
provide good service at competitive prices.  

5.1.2.  Option 2: A standard price list covering the 20 most representative fees or covering 

at least 80% of key charges incurred 

Effectiveness of policy option 
The mandatory provision of price lists using standardised terminology as a means to disclose 
fees ex-ante facilitates the comparison of different bank offers. This option would contribute 
towards  establishing  a  level  playing  field  between  credit  institutions  competing  in  the 
payment account market and empower consumers provided the fees contained therein covered 
a significant part of the expenditure actually incurred.  
Fees  common  to  all  Member  States  would  be  identified  at  EU  level  and  supplemented 
nationally  to  cover  the  20  most  representative  fees or at  least 80% of key charges incurred.  
Common presentation requirements, which could include the introduction of a single form for 
ex-ante  disclosure  of  payment  account  fees,  would  be  established  at  EU  level.  EU  action 
would  also  cover  dissemination  requirements  to  ensure  that  fee  information  is  easily 
accessible to consumers.  
Presenting  all  possible  fees  in  a  list,  whether  within  leaflets  or  brochures  available  in  bank 
branches  or  in  a  downloadable  format  over  the  internet,  would  virtually  capture  all  bank 
customers  and  provide  them  with  a  comprehensive  set  of  fee  information.  However,  it  may 
prove cumbersome and cause consumers to ignore the information. "Long and overly complex 
information risks being of little value to consumers. Moreover excessive information can lead 
consumers to feel overwhelmed."496 

496  "Consumer Policy Toolkit" – OECD, Paris 2010. 

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Similar  provisions497  have  existed  in  France  since  2005,  requiring  banks  to  display  fees 
prominently  and  to  make  brochures  available  to  the  public  fee  free  of  charge.  A  French 
report498  notes  that  a  survey  carried  out  by  the  consumer  organisation  UFC  Que  Choisir, 
found in a sample of 12 institutions that fee brochures were 24 pages long and contained 303 
fee  line  items.  They  also  only  presented  fee  items  in  isolation,  lacking  information  on  the 
nature  of  related  services.  In  the  same  report  63%  of  bank  clients  were  unsatisfied  by  the 
complexity  of  fee  brochures,  and  16%  were  very  unsatisfied.      In  addition,  a  majority  of 
responses  to  the  public  consultation  on  payment  accounts499  from  consumers,  financial 
services  industry  and  public  authorities,  have  indicated  that  the  full  standardisation  of  fee 
terminology  could  bring  about  the  unintended  consequence  of  standardising  products.  They 
also mentioned the risk of information overload to consumers. Fee lists containing a smaller 
number  of  fees  may  more  appropriately  provide  concise  and  digestible  information  and 
actually  help  improve  consumers'  understanding  of  fees.  Therefore  it  appears  more 
appropriate to focus on a core set of fees rather than attempt to cover all fees within a standard 
form price list. 
However  in  order  to  achieve  the  objectives  of  raising  consumer  confidence  and  increasing 
consumer choice, the fees retained should represent the major part of the expenditure actually 
incurred. EU action would address this issue by setting up a double criterion on the scope of 
fees to be included in standard price lists based on either the 20 most representative fees or a 
lower  number  of  most  frequent  fees,  provided  they  cover  at  least  80%  of  typical  average 
expenditure incurred on a payment account. For example, since 2011 France has established a 
mandatory list of 10 standard fees, which it estimates would cover up to 80% of fees incurred 
by  account  holders.  Regular  monitoring  and  review  provisions  should  also  address  the  risk 
that pricing structures would by modified to escape required disclosures, by moving charges 
to fees not contained in the standard price list.  
Further, those fees common to all Member States would be determined at EU level and then 
supplemented nationally. 
Impacts of policy option and efficiency 
Consumers  would  benefit  from  information  that  is  concise  and  easy  to  compare  between 
different bank offers. The tools made available to consumers to compare bank offers would 
not  have  a  positive  impact  if  the  time  invested  in  going  through  lengthy  lists  of  fees  for 
different banks outweighed the benefit of choosing the offer that presents best value. This is 
in line with consumers' general view that emerged during the public consultation, recognising 
that harmonisation of terminology should be limited to core terms and give due attention to 
the risk of excessive information. 
EU legislation would impose requirements on credit institutions to make use of standard fee 
terminology  and  to  make  available  and  exhibit  prominently  standard  fee  lists.  Credit 
institutions  in  all  but  four  Member  States  where  standard  fee  terminology  is  already  in  use, 
would incur costs to comply with the requirement to standardise fee terms. 
However, as indicated, initiatives aimed at making banks disclose lists of fees already exist in 
14  Member  States.  Industry  codes  or  general  banking  practice  cover  the  provision  of  fee 
information  as  part  of  contractual  terms  and  conditions  in  7  Member  States.  Therefore,  the 
marjority of credit insititutions currently already comply in part with such requirements that 
would feature in EU legislation.  

497  Unlike the proposal above, the provisions in the “code monetaire et financier” do not foresee that fee lists and fee 
brochures would include fully standardised terminology. Reference to the French case is relevant in this context to 
assess the potential for information overload of the measure under consideration. 

498  Rapport sur la tarification des services bancaires, July 2010, compiled for the French Ministry of the Economy. 
499  2012 Public consultation on bank accounts (see footnote 11). 

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Generally costs to Member States are not expected to be significant for this option. However 
when compared to option 7, which foresees full standardisation of all fee terminology the cost 
of option 2 are higher as a result of additional recurring effort to review to set of cost fees, 
which would not be relevant to option 7.  
Finally,  the  impact  on  an  EU  level  supervisory  authority  should  be  considered  in  terms  of 
coordinating the work  of  national  supervisors, supporting the identification of common  fees 
across  the  EU  and  ensuring  that  EU  harmonisation  criteria  relating  to  the  selection  of 
complementary  fees  within  Member  States,.  An  EU  level  authority  would  also  be  charged 
with  setting  technical  standards,  issuing  guidelines  and  coordinating  longer  term  integration 
of the internal market. 
Quantification of costs and benefits 

• 

• 

• 

• 

• 

• 

Standard,  comparable  fee  information  contained  in  standardised  price  lists  would 
benefit  consumers  who  sought  better  offers  in  the  market.  For  the  purposes  of  this 
assessment we estimate that changes in switching behaviour could result in a benefit 
to consumers of EUR 584.87 million, measured over the period from 2013 to 2022.  

Credit  institutions  and  to  a  lesser  extent,  public  authorities  would  be  expected  to 
incur costs as a result of the introduction of standard price lists.  

Total initial outlay for credit institutions is estimated at a range between EUR 95.95 
– EUR 163.03 million. Relevant costs include updates to marketing and promotional 
material, changes to IT systems to produce price lists in standard form, costs linked 
to internal communication and training and input by industry to set up the list of fees 
with competent authorities.  

Total  recurring  costs 
to  cost  between 
EUR 183.17 – EUR 255.79 million  between  2013  and  2022  mainly  comprising 
additional staff costs due to incremental compliance requirements. 

institutions  are  estimated 

to  credit 

One-off  costs  to  Member  States  comprise  identifying  major  fee  items  and 
implementing  EU  legislation  are  not  considered  material,  assuming  that  credit 
institutions would provide major input into the selection process. 

Recurring  costs  to  Member  States  from  2013  to  2022  are  estimated  at  a  range 
between EUR 0.60 – EUR 1.17 million and mainly comprise the cost of revising fee 
lists and monitoring and enforcement of legislation.  

Table 3.I: 20 most representative fees or 80% of key charges incurred 
Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs: 
 One-off:  
 Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

584.87 
584.87 
Max 

163.03 
255.79 
418.82 

0.08 
1.17 
1.25 

Min 

95.95 
183.17 
279.12 

0.05 
0.60 
0.65 

A detailed description of the calculation basis and assumptions used in quantifying the above 
costs and benefits table (and each costs and benefits table throughout), is provided in Annex 
VI. 

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5.1.3.  Option 3: Introduce the requirement to develop glossaries for bank fee terms 

Effectiveness of policy option 
Glossaries of fee terms are useful tools to encourage a better understanding of the meaning of 
fees,  which  in  turn  contributes  towards  empowering  consumers  to  overcome  inertia  and 
widens their choice of bank offers. A glossary is an educational tool which can be combined 
with  other  options  considered.  In  the  public  consultation,  most  financial  services  industry 
replies considered glossaries a useful tool mainly in terms of enhancing consumers' financial 
education. Consumer organisations recognised that glossaries are not always considered really 
helpful,  especially  if  not  accompanied  by  standardised  terminology  or  without  adequate 
circulation  among  conumers  (BEUC,  UFC-Que  Choisir?,  Which?)  Glossaries  should  not  be 
considered as a stand-alone option since they do not provide information about bank offers as 
such,  neither  in  terms  of  prices  nor  of  the  services  offered.  This  option  could  be  combined 
with options 2, 4, 5, 6, 7 and 8.  
Glossaries  that  are  intended  to  cover  all  fee  terms  also  share  the  concern  described  in  the 
previous section that they may be cumbersome and lead to information overload. Consumers, 
who would be the main beneficiaries of such a tool, may shy away from lenghty documents, 
in particular if they only constitute a limited part of their search efforts, given that they do not 
provide specific information on bank offers. This is likely to restrict their use and limit any 
consequent benefit. 
This  option  assumes  that  Member  States  would  establish  a  single  reference  glossary  to  be 
used within their territory. Under this option we consider two alternative approaches being:a) 
a single glossary within each Member State containing single, harmonised definitions and b) a 
single  glossary  within  each  Member  State  collecting  different  definitions  for  fees  in  use 
within credit institutions. If structured in a way to categorise fees appropriately as well as the 
underlying services, the latter may assist a consumer in comparing the terminology used by 
different  banks.  This  would  require  more  effort  and  be  more  time  consuming  than  if  the 
glossary were to be populated by standardised terms. In addition it is more likely to result in 
information overload. 
Impacts of policy option on stakeholders and efficiency 
This  option  may  assist  consumers  in  developing  an  understanding  of  what  fees  mean. 
Moreover,  drawing  on  recent  experiences  in  France500,  setting  up  glossaries  may  assist  in 
bringing about a harmonisation of practices of different credit institutions as regards their use 
of bank fee terminology, thus creating a clearer landscape for bank fees. 
National level glossaries are not widespread, existing in only two Member States. If required, 
this  option  would  impact  upon  a  large  number  of  Member  States  and  could  prove  quite 
ambitious,  given  the  diversity  of  terms  in  use.  Setting  up  a  glossary  of  unique  standardised 
terms  and  its  regular  update  would  require  the  close  involvement  of  credit  institutions  and 
their  representative  associations  together  with  consumer  organisations  and  coordination  by 
competent public authorities. Therefore it is expected to generate high one-off costs. 
In  the  public  consultation,  Member  States  expressed  diverging  views  on  the  possible 
development  of  glossaries.  Most  of  them  stressed  the  usefulness  of  these  tools  when 
developed  at  the  national  level;  some  respondents  supported  EU  level  intervention  in  this 
area,  while  noting  the  difficulty  to  accomplish  it;  others,  considered  any  intervention  to 
improve glossaries unnecessary. 

500  See reply of the French Banking Federation to the Public consultation on bank accounts, 2012, available at: 

http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm#consultation and  
http://ec.europa.eu/consumers/consultations/bank_accounts_consultation-2012_03_20_en.htm 

EN 

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Common costs to both alternative approaches include, the cost of publicising the existence of 
the glossary for public authorities and credit institutions. 
Quantification of costs and benefits  
Benefits related to potential changes in switching behaviour have not been estimated for the 
introduction of glossaries, given that they are not a stand-alone option. 

• 

Variant A: Glossaries containing non-harmonised terminology 

While  glossaries  provide  definitions  of  services  and  related  fees  that  enable  consumers  to 
better understand the information provided to them with their payment account, they are not 
considered  to  derive  direct  quantifiable  benefits  in  terms  of  changes  to  consumer  behaviour 
either by managing their payment account better or by choosing to seek better offers. 

One-off costs to credit institutions include internal communication and training costs for front 
office and marketing staff, updating websites and IT applications to be able to make available 
glossaries.  Total  initial  outlay  for  credit  institutions  is  estimated  at  between  EUR  11.66  – 
EUR 23.58 million.  

Total  recurring  costs  to  credit  institutions  are  estimated  to  cost  between  EUR  149.67  – 
EUR 192.32 million from 2013 to 2022.  

Initial  one-off  costs  to  public  administrations  are  not  material  for  this  option  as  significant 
effort is not expected of public authorities. Recurring costs to Member States are estimated at 
a range of between EUR 0.84 million and EUR 1.61 million, comprising the cost of updating 
the glossary and costs associated with monitoring and enforcing legislation. 

Table 3.J: Non-harmonised glossaries 

Total EU costs (million EUR) 
Credit institution costs: 
 One-off:  
 Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

Min 

Max 

11.66 
149.67 
161.33 

0.02 
0.82 
0.84 

23.58 
192.32 
215.90 

0.05 
1.56 
1.61 

• 

Variant B: Glossaries based on fully harmonised terminology 

As noted in variant A, no quantifiable benefits are associated directly with this option.  

One-off costs to credit institutions are estimated at between EUR 40.35 - EUR 72.76 million. 
This  figure  takes  account  of  internal  communication  and  training  costs  to  familiarise  front 
office  and  marketing  staff  with  new  standard  definitions  and  explanatory  material  for 
customers linking terminology in use by a credit institution to standard terms in the glossary. 
Total recurring costs to credit institutions are estimated to cost between EUR 334.11 – EUR 
442.78 million from 2013 to 2022.  

Initial one-off costs to public administrations are estimated at between EUR 0.08 million and 
EUR  0.11  million.  These  comprise  effort  on  the  part  of  public  authorities  to  set  up  fully 
harmonised definitions of fee terminology. Recurring costs to Member States are estimated at 
a  range  of  between  EUR  0.99  million  and  EUR  1.95  million,  which  take  into  account 
additional effort in maintaining the glossary as well as costs associated with monitoring and 
enforcing legislation. 

Table 3.K: Fully harmonised glossaries 

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Min 

Max 

40.35 
334.11 
374.46 

72.76 
442.78 
495.54 

the 
Introduce 
requirement  to  set 
fee 
independent 
comparison 

5.1.4.  Option  4: 

up 

websites 

Total EU costs (million EUR) 
Credit institution costs: 
 One-off:  
Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

0.08 
0.99 
1.07 

0.11 
1.95 
2.06 

of 
sites 

policy option 
could 

Effectiveness 
Comparison 
prove 
effective  in  achieving  the  objectives  of  this  initiative.  They  provide  an  effective  means  for 
consumers  to  assess  the  merits  of  different  offers  in  a  single  space  and  therefore  represent 
lower search costs than other options under consideration, where for example, a consumer is 
required  to  collect  information  from  separate  credit  institutions  or  perform  more  detailed 
analyses.  If  properly  set  up,  they  also  provide  the  right  balance  between  the  need  for 
information  to  be  concise  and  clear  and  the  need  for  it  to  be  complete  and  comprehensive, 
through  functionalities  that  enable  internet  users  to  drill  down  into  deeper  levels  of 
information of interest to them. Therefore this option contributes towards the overall objective 
to make markets efficient.  
In  the  liberalised  markets  of  other  network  industries  (e.g.  telecommunications,  electricity, 
gas), making price information clear and accessible for customers is considered crucial for the 
further developments of the EU markets that bring benefits to citizens in all Member States. 
For  example,  in  light  of  the  Commission  report  on  the  functioning  of  the  retail  electricity 
market,501 in July 2012 the European Energy Regulators have developed guidelines of good 
practice  for  price  comparison  tools  in  the  field  of  energy  supply.502  The  recommendations 
highlight the key requirements of price comparison tools (such as independence, transparency, 
exhaustiveness,  clarity,  user-friendliness  and  accessibility),  which  can  ensure  neutral  and 
objective information to consumers. 
In  the  2012  public  consultation  on  bank  accounts,  broad  support  was  expressed  both  by 
consumers  and  the  banking  industry  as  to  the  usefulness  of  comparison  web-sites  to  help 
consumers and complement the obligation to provide clear information. 
However, comparison websites must capture a broad range of consumers. Although internet 
penetration  in  European  households  continues  to  increase  steadily503,  the  proportion  of 
individuals who did not use the internet in 2011 stood at 24%, (42% in 2006), which is still a 
significant  portion  of  the  European  population.  In  addition,  not  all  categories  of  consumers 
may be able and willing to make use of online comparison tools. This is particularly true for 
the  more  vulnerable  sections  of  society,  as  indicated  also  during  the  public  consultation. 
These  may  also  be  the  groups  who  would  benefit  most  from  making  purchases  that  reflect 
best value for money.504  Neverthless, given that this tool would capture the vast majority of 
EU  consumers,  this  will  be  the  most  effective  tool  for  comparison  purposes,  especially  if 
complemented  by  other  options  that  address  a  broader  range  of  consumers.  Alternative 
comparison  methods  for  those  that  do  not  use  the  internet,  although  more  time  consuming,  
would include manual comparison of fee information provided by credit institutions.  

501  Commission Staff Working Paper: "The functioning of the retail electricity markets for consumers in the European 

Union", SEC(2010) 1409. 

502  CEER (Council of European Energy Regulators): "Guidelines of Good Practices on Price Comparison Tools", 10 July 

2012 (available at: http://www.energy-regulators.eu). 

503  The proportion of households in the EU with access to the internet reached 73% in 2011, representing an increase of 24 

percentage points compared with 2006 according to Eurostat data. 

504  Markets and Households on Low Incomes, Office of Fair Trading, September 2010. 

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A recent EIOPA report505 carried out in the context of the insurance market gives a positive 
view of the development of comparison sites as a means to stimulate competition. However it 
points to the fact that comparison sites tend to focus too strongly on price elements in lieu of 
understanding  the  terms  and  conditions  of  competing  products.  As  illustrated  by  the  2011 
study,506 in many cases comparison tools are used in combination with glossaries and lists of 
fees.  In  the  context  of  this  option,  we  consider  that  comparison  sites  are  well-adapted  tools 
that  could  also  provide  other  types  of  information,  for  example  they  could  collect  key 
customer  service  indicators  or  create  a  number  of  quality  of  service  measures  in  agreement 
with credit institutions. 
Another  issue  highlighted  by  EIOPA  is  the  potential  for  conflicts  of  interest  where  close 
commercial  links  exist  between  insurers  and  commercial  comparison  websites.  This  is  an 
essential issue to address if market information is to be free of bias and reliable. In order to 
ensure that comparison websites are independent, we consider two variants under this option. 
The  first  is  to  have  a  single  comparison  site  within  each  Member  State,  managed  by  a 
competent  public  authority.  As  an  alternative  public  authorities  would  set  up  accreditation 
schemes for private comparison sites as a means to ensure independence.  
Entrusting the setting up of a comparison website to a public authority, covering virtually the 
whole  range  of  bank  acccount  offers  may  be  more  appropriate  in  Member  States  where 
comparison  tools  are  not  widely  used.  However  in  more  mature  markets,  existing  private 
providers  may  be  well  established  and  may  be  willing  and  able  to  fulfil  accreditation 
requirements in order to gain further recognition in the market and strengthen their reputation 
with consumers and credit institutions.  
Finally,  the  scope  of  comparison  websites  may  also  not  be  bound  by  national  markets  but 
could evolve to cover broader geographical areas within the single market, where a business 
case exists. In this case, it may be more appropriate to allow Member States and the EU to 
establish oversight and monitoring mechanisms at an appropriate level, while allowing firms 
to seek business opportunities within the single market.  
Impacts of policy option and efficiency 
Comparison  tools  are  becoming  increasingly  widespread  within  the  EU.  The  number  of 
available comparison sites has increased drastically since 2008,507 cover more products than 
payment  accounts  and  are  present  in  all  Member  States  with  the  exception  of  Luxembourg. 
Generally  they  are not  established through  legally binding instruments, but originate from a 
wide  range  of  stakeholders  including  commercial  operators,  credit  institutions,  consumer 
organisations  or  organisations  representing  industry.  As  a  result  of  market  developments  it 
appears  more  appropriate  to  establish  accreditation  schemes  for  operators  of  comparison 
sites.508 
Website operators would be subject to requirements to acquire accreditation such as minimum 
numbers  of  products  or  providers  websites  should  provide  information  about,  dislosures  of 
potential  conflicts  of  interest  and  independence.  In  addition  they  would  need  to  adhere  to 
quality standards on the information provided together with requirements on timeliness. These 
standards  would  generate  costs  to  website  operators.  Given  that  the  onus  of  collecting  and 

505 

Initial Overview of Key Consumer Trends in the EU, European Insurance and Occupational Pensions Authority 
(EIOPA), February 2012. 

506  Market study of the current state of play in Member States regarding initiatives in bank fee transparency and 

comparability in personal current bank accounts, Van Dijk Management consultants, 2011. 
http://ec.europa.eu/consumers/rights/docs/1912012_market_study_en.pdf 
Ibid. 

507 
508  BEUC's response to the CEER consultation "Energy: Price Comparison Tools" refers to successful accreditation scheme 

Confidence Code in the United Kingdom that is run by Consumer Focus. 

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processing information would fall upon website operators, credit institutions are not expected 
to incur compliance costs under this variant. Participation on comparison sites on the part of 
credit  institutions  would  be  voluntary  and  credit  institutions  would  be  able  to  weigh  the 
benefits of promoting their  payment  accounts against the potential costs that may arise as a 
result  of  vountary  arrangements  with  website  operators  to  provide  information  on  a  regular 
basis. 
The  main  set-up  costs  would  fall  upon  competent  public  authorities  who  would  be  charged 
with  developing  accreditation  systems  as  well  as  monitoring  compliance  and  imposing 
sanctions where approprate for sites whose scope falls within national market boundaries. It 
may  be  appropriate  for  an  EU  level  supervisor  to  develop  accreditation  of  standards  in 
collaboration with Member State authorities with the view of converging national authorities 
and  developing  a  level  playing  field  within  the  Single  Market.  Operators  seeking  to  cover 
broader  geographical  areas  than  Member  State  territories  could  then  fall  under  the  direct 
supervisory powers of an EU level authority. 
The  impact  on  consumers  who  make  use  of  comparison  tools  would  be  highly  positive.  As 
noted above, consumers could limit their search costs and receive relevant information - not 
only on prices - but also on other important information on services and service quality. In the 
public  consultation,  most  consumer  organisations  acknowledged  the  potential  benefits  of 
comparison websites, accessible to all and run by public bodies. This was the preferred tool 
for  enhancing  transparency  and  comparability  of  bank  fees.  The  financial  services  industry 
generally  supported  the  development  of  comparison  websites,  but  stated  that  they  should 
remain  voluntary,  in  particular  if  existing  initiatives  function  well.  A  few  respondents, 
however, pointed out the importance of a public intervention on websites, with a supervisory 
or  management  role  (e.g.  Banking  Associations  in  the  Czech  Republic,  Italy  and  the 
Netherlands). 
Quantification of costs and benefits  

• 

Variant A: A single official website managed by a competent authority 

Benefits  associated  with  changes  in  switching  behaviour  on  the  part  of  consumers  are 
estimated at EUR 731.08 million from 2013 to 2022.  

One-off costs to credit institutions are estimated at between EUR 13.75 - EUR 21.81 million. 
These mainly consist of costs incurred to set up internal processes to compile and submit fee 
information  to  a  website  managed  by  a  public  operator.  Similarly,  recurring  costs  to  credit 
institutions,  estimated  at  a  range  between  EUR  49.36  –  EUR  98.72  million  from  2013  to 
2022,  consist  of  costs  incurred  in  submitting  price  information  to  a  website  operator  on  a 
regular basis.   

Initial  outlay  to  Member  States  is  estimated  at  a  range  of  EUR  0.76  –  EUR  2.8  million, 
consisting  mainly  of  website  set-up  costs.  Total  recurring  costs  to  Member  States  are 
estimated  between  EUR  14.04  –  EUR  20.95  million.  These  figures  are  composed  of  time-
based  costs  (EUR  7.93  –  EUR  8.74  million)  and  acquisition  costs  (EUR  6.11  –  EUR  12.21 
million). Running websites are the major component of time-based costs, with an estimated 
cost of EUR 7.21 – 7.34 million, while acquisition costs are made up of the estimated cost of 
promoting the website through information campaigns. 

Table 3.L: A single official website managed by a competent authority 

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Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institutions: 
 One-off:  
 Recurring: 
Total credit institutions costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

731.08 
731.08 
Max 

21.81 
98.72 
120.53 

2.86 
20.95 
23.81 

Min 

13.75 
49.36 
63.11 

0.76 
14.04 
14.80 

• 

Variant B: Comparison sites licensed under an accreditation scheme  

Benefits  associated  with  changes  in  switching  behaviour  on  the  part  of  consumers  are 
estimated at EUR 731.08 million from 2013 to 2022 as in Variant A to this option.  

Credit institutions would not be significantly impacted by this option given that participation 
in  comparison  websites  would  be  voluntary  and  the  onus  of  collecting  and  processing  fee 
information would call upon website operators. 

Two website operators per Member State are assumed to obtain accreditation for the purposes 
of this assessment. These would incur one-off costs, (EUR 0.32 million – EUR 0.65 million), 
mainly  incurred  in  setting  up  operations  and  internal  controls  to  comply  with  accreditation 
standards. Similarly, recurring costs to website operators, estimated at a range between EUR 
4.77 – EUR 9.53 million from 2013 to 2022, consist of costs of meeting requirements in view 
of compliance audits.   

Initial  outlay  to  Member  States  is  estimated  at  a  range  of  EUR  0.36  –  EUR  0.66  million, 
consisting  mainly  of  setting  up  an  accreditation  system.  Total  recurring  costs  to  Member 
States are estimated between EUR 3.48 – EUR 6.74 million. These figures are composed of 
time-based  costs  (EUR  1.10  –  EUR  1.98  million)  and  acquisition  costs  (EUR  2.38  –  EUR 
4.76  million).  These  mainly  comprise  the  cost  of  monitoring  websites  and  carrying  out 
awareness campaigns.  

Table 3.M: Comparison sites licensed under an accreditation scheme 

Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Website operators: 
 One-off:  
 Recurring: 
Total website operators costs: 
Member State costs: 
One-off:  
 Recurring: 
Total Member State costs: 

731.08 
731.08 
Max 

0.65 
9.53 
10.18 

0.66 
6.74 
7.40 

Min 

0.32 
4.77 
5.09 

0.36 
3.48 
3.84 

5.1.5.  Option  5:  Introduce  the  requirement  to  provide  representative  examples  when 

advertising payment accounts  

Effectiveness of policy option 
Representative  examples  are  an  effective  means  of  providing  clear  and  concise  information 
through advertising material that demonstrates a snapshot of the main attributes of a payment 
account and the main elements of fees. Some account pricing models may be more suitable to 
the  use  of  representative  examples  than  others.  In  particular,  pricing  models  that  have  a 

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simple charge structure comprising a limited number of fees (e.g. package-based or indirect 
revenue based) can easily be presented, together with specific conditions and attributes of an 
account  in  a  concise,  tablular  form.  This  allows  consumers  to  obtain  all  of  the  main  price 
features of an account at a glance, within advertising material.  
On the contrary where payment accounts charge fees per transaction or block of transactions, 
(transactional-based), the cost of an account will depend heavily on consumption patterns and 
typically counts a greater number of fee items, (e.g. variable fees relating to cash handling and 
payments). In this case, fee information cannot be easily captured in a summary table format 
and needs more processing to be useful.  
To  reflect  variable  costs  in  representative  examples,  this  option  foresees  the  use  of  usage 
profiles  reflecting  differing  kinds  of  account  usage  patterns.  The  first  variant  within  this 
option foresees that credit institutions would set up their own representative examples using 
usage profiles developed internally for relevant products. Alternatively, Member States would 
set  up  standard  representative  usage  profiles  to  be  used  consistently  by  credit  institutions. 
Technically  the  latter  variant  should  provide  a  better  basis  for  comparison  of  different 
payment account offers than if credit institutions are free to develop own usage profiles.  
While both variants would enable representative examples to be customised to differing levels 
of  usage  patterns,  both  alternatives  would  also  multiply  the  number  of  representative 
examples  that  would  have  to  be  presented  with  advertising  material  for  any  one  payment 
account  product.  We  consider  that  a  minimum  of  3  and  a  maximum  of  6  usage  profiles509 
would be necessary to capture different levels of usage in a representative manner. As a result, 
where  payment  accounts  charge  fees  per  transaction  (or  per  block  of  transactions), 
representative  examples  may  not  be  an  appropriate  means  of  providing  consise  and  easy  to 
understand  fee  information  within  advertising  material.  The  reasons  are,  first  that  this  tool 
does  not  cater  well  for  variable  costs  and  second,  because  combining  and  providing 
information  about  underlying  usage  profiles  may  render  information  less  clear  and 
understandable,  especially  in  advertising  material.  While  the  Commission's  behavioural 
study,510  indicated  that  the  use  of  representative  examples  a  positive  impact  on  consumer 
switching  behaviour,  the  study  restricted  the  number  of  profiles  to  two  extrement  scenarios 
and  was  presented  in  a  visually  attractive  manner,  which  may  have  influenced  positive 
responses rates in this case. 
Another issue to consider is that consumers may not be able to locate their own usage levels 
within a set of examples, without assistance. 
As discussed in the problems section pricing models for payment accounts vary considerably 
within  the  EU.  Table  3.F  above  shows  eight  Member  States511  where  the  transaction-based 
model was in use, out of a sample of 16 Member States.512 
The  use  of  representative  examples  is  also  of  less  value  when  used  for  packaged  payment 
accounts,  with  a  regular,  single  charge  fee  and  tailored  services.  In  some  more  mature 
markets,  such  as  in  France,  the  trend  is  to  increasingly  personalise  packaged  bank  offers  to 
meet  customer  needs.  In  such  a  tailor-made  product  environment,  representative  examples 
may also not be effective. 
Impacts of policy option and efficiency 

509  This assessment is based Data collection for prices of current accounts provided to consumers, Van Dijk Management 
Consultants (2009), which identified a total of 8 profiles of which, 4 were retained for the purposes of the analysis. The 
World Retail Banking Report 2009, Cap Gemini, uses 5 usage patterns to construct price indices. 

510  Bank fees behaviour study, 2012, TNS Opinion Ltd. 
511  France, Italy, Latvia, Lithuania, Luxembourg, Spain, Poland, Portugal, United Kingdom. 
512  Table 3.4 'Prevailing pricing characteristics in selected Member States' in Section 2. 

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Detailed  information  on  the  current  use  of  representative  examples  for  the  purposes  of 
advertising within the EU is not available and no regulatory requirements or coordinated self-
regulatory initiatives appear to be in place in Member States. A number of credit institutions 
may provide representative examples on a voluntary bases, mainly in The Netherlands and to 
some extent in the United Kingdom, fucussing on overdrafts. Therefore it is likely that credit 
institutions  in  all  Member  States  would  need  to  adapt  to  such  a  requirement.  Credit 
institutions would incur one-off costs associated with setting up representatives examples and 
where relevant, account usage profiles. Additional costs would include adapting promotional 
material  and  the  recurring  costs  of  ensuring  compliance  with  the  requirements  for  all 
advertising launching new payment account products. 
The option would impact upon public authorities mainly in the event that standard bank usage 
profiles were to be set up at Member State level. Public authorities would incur one-off costs 
in setting up usage profiles in this case. Costs would also arise for public authorities, credit 
institutions  and  consumer  organisations,  from  the  necessary  coordination  efforts  during  the 
set-up stage. Recurring costs would mainly be incurred in monitoring credit institutions and 
ensuring  that  representative  examples  reflect  the  attributes  of  payment  account  products 
accurately.  
In  the  public  consultation  on  payment  accounts,  a  number  of  consumers  (including  BEUC) 
noted that entrusting credit institutions with the task to develop their own usage profiles could 
be  problematic,  introducing  bias  into  profiles  and  also  detrimental  to  the  objective  of 
providing  clear  and  comparable  information.  Conversely,  many  representatives  from  the 
financial  services  industry  indicated  that  representative  examples  should  be  provided  on  a 
voluntary  basis  and  did  not  react  favourably  to  standardisation  of  usage  profiles  at  Member 
State level.  
Both  variants  under  this  option  have  potential  disadvantages.  If  representative  examples  do 
not  provide  clear  and  comparable  information,  they  may  have  an  adverse  impact  on 
stakeholders – particularly consumers. They present risks to industry as they do not guarantee 
improvements in providing a level playing field to market participants. Moreover, the benefit 
of representative examples is fundamentally linked to how well pricing structures adapt to the 
presentation  of  attributes  provided  for  a  payment  account.  This  option  is  therefore  not 
considered to fulfill the objectives established in this initiative. 
Quantification of costs and benefits  

• 

Variant A: Banks set up own representative examples 

A change in consumer switching behaviour is estimated to accrue a benefit amounting to EUR 
146.22  million  from  2013  to  2022.  Compared  to  other  options,  this  reflects  the  difficulties 
first, of ensuring that representative examples would be a useful tool when applied to different 
pricing  structures  and  second,  of  those  arising  due  to  the  complexity  that  disclosure  on 
different usage profiles within the same representative example may create. 

Total  one-off  costs  to  credit  institutions  of  setting  up  own  representative  examples  are 
estimated  at  between  EUR  265.44  –  EUR  463.30  million.  The  major  cost  items  to  credit 
institutions  are  adapting  advertising  material  in  compliance  with  a  legislative  requirement, 
(EUR  174.52  –  EUR  290.87  million).  This  amount  also  includes  the  cost  of  developing 
representative  account  usage  profiles.  Other  major  cost  items  include  costs  of  updating  IT 
systems and internal communication and training costs.  

Total  recurring  costs  to  credit  institutions  are  estimated  at  between  EUR  323.68  –  EUR 
347.76  million  from  2013  to  2022  and  mainly  comprise  additional  staff  costs  as  a  result  of 
incremental compliance requirements (EUR 299.61).  

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One-off  costs  to  Member  States  mainly  consist  of  implementing  legislation  and  are  not 
expected to be material. Recurring costs to Member States from 2013 to 2022, are estimated 
at a range between EUR 0.71 - EUR 1.40 million and mainly comprise the cost monitoring 
and enforcement of legislation (estimated between EUR 0.33 - EUR 0.66 each).  

Table 3.N: Representative examples using non-standard usage profiles set up by credit institutions 

Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs: 
One-off:  
Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

146.22 
146.22 
Max 

463.30 
347.76 
811.06 

0.03 
1.40 
1.43 

Min 

265.44 
323.68 
589.12 

0.02 
0.71 
0.73 

• 

Variant B: Member States prescribe representative examples  

The estimate of benefits to consumers relating to a change in switching behaviour is equal to 
variant A above, amounting to EUR 146.22 million from 2013 to 2022.  

Total one-off costs to credit institutions are estimated at between EUR 299.71 – EUR 522.34 
million.  The  major  cost  items  to  credit  institutions  are  the  same  as  described  in  variant  A. 
Here  they  are  expected  to  be  higher,  reflecting  additional  compliance  efforts  in  adapting 
marketing  and  IT  to  pre-defined  usage  profiles  rather  than  profiles  that  are  generated 
internally. 

Total  recurring  costs  to  credit  institutions  are  estimated  at  between  EUR  362.97  –  EUR 
390.94  million  from  2013  to  2022  and  mainly  comprise  additional  staff  costs  as  a  result  of 
incremental compliance requirements.  

One-off costs to Member States mainly consist of developing standard usage profiles and are 
estimated  to  cost  between  EUR  0.08  and  EUR  0.12.  Recurring  costs  to  Member  States  are 
expected mainly through revisions of standard usage profiles, monitoring and enforcement of 
legal  requirements.  Total  recurring  costs  to  Member  States  are  estimated  at  between  EUR 
0.94  -  EUR  1.85  million  from  2013  to  2022  and  mainly  comprise  the  cost  monitoring  and 
enforcement of legislation. 

Table 3.O: Costs and benefits –representative examples using standard usage profiles 

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Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs:  
One-off:  
Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
 Recurring: 
Total Member State costs: 

146.22 
146.22 
Max 

522.34 
390.94 
912.08 

0.12 
1.85 
1.97 

Min 

299.71 
362.97 
662.08 

0.08 
0.94 
1.02 

5.1.6.  Option  6:  Provide  or  make  available  a  personalised  cost  simulation  to  prospective 

customers 

Effectiveness of policy option 
Cost simulations can be provided through both the major distribution channels used by credit 
institutions to sell payment accounts, i.e. the branch network and online. As a result, they are 
capable of capturing virtually all customers. They would cover the needs of consumers with 
varying  degrees  of  financial  education,  as  more  proactive  internet  users  could  use  tools  to 
calculate  cost  simulations  themselves,  while  others  preferring  to  bank  directly  in  branches 
would  be  assisted  by  an  employee  of  a  credit  institution  in  compiling  the  information 
necessary  to  set  up  a  simulation.  Yet  the  ultimate  responsibility  to  provide  information  that 
may reasonably reflect a client’s usage patterns would fall upon the client themself, although 
factual  information  from  a  consumer’s  bank  history  and  bank  statements  could  be  used  to 
provide reliable information.  
To  be  effective,  personalised  cost  simulations  need  to  be  based  on  relevant  information 
information,  which  requires  efforts  from  both  consumers  and  businesses.  For  example,  in 
2011 the United Kingdom launched an initiative to enable consumers to access their personal 
and  transaction  data  in  a  safe  way,  named  "Midata  ".513  The  purpose  of  the  intiative  is  for 
consumers  to  improve  their  purchasing  decisions  by  becoming  more  aware  of  their 
consumption  patterns.  While  this  is  precisely  the  kind  of  information  necessary  for  cost 
simulations, initial research indicates that "There is unlikely to be very much initial consumer 
interest  in  the  overarching  principle  of  companies  releasing  personal  data  for  use  by 
consumers. If anything, this news is likely to be received with suspicion until the benefits of 
this  can  be  observed  in  practice."  Some  credit  institutions  provide  a  simple  tool  on  their 
website  for  consumers  to  run  simulations  of  overdraft  charges.  Yet,  mandatory  cost 
simulations  approximating  the  features  contained  in  this  option  are  currently  not  widely  in 
use. 
In  order  to  address  different  account  usage  patterns,  this  option  considers  the  two  scenarios 
presented in the discussion on representative examples. Under the first scenario, banks would 
provide  fully  personalised  cost  simulations  attaching  the  fees  charged  on  an  account  to 
information  provided  by  a  prospective  customer  on  usage  patterns,  (apart  from  account 
management  fees  and  other  standard  charges).  Banks  could  also  set  up  their  own  customer 
usage profiles and provide prospective customers with cost simulations corresponding to the 
most  relevant  profile,  based  on  information  collected  from  the  customer.  In  the  second 
scenario  Member  States  would  define  a  set  of  standard  bank  usage  profiles  for  credit 
institutions  to  use  when  providing  cost  simulations.  This  approach  suffers  from  the  same 
weaknesses as the previous option that discussed the use of representative examples.  

513  http://www.bis.gov.uk/policies/consumer-issues/consumer-empowerment/personal-data  

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Impacts of policy option and efficiency 
The impact on consumers would depend on how they perceived this option. When contrasted 
with  comparison  websites,  this  option  has  the  disadvantage  that  consumers  would  need  to 
collect  simulations  from  different  institutions  separately  in  order  to  compare  offers,  thus 
incurring higher search costs. In addition as mentioned above, the clarity of information could 
be  hampered  by  different  methodologies  used  by  credit  institutions  within  simulators  and 
usage  patterns.  In  the  public  consultation,  several  consumer  organisations  questioned  the 
usefulness of these tools, raising in particular the risk of them being too generic.  
The cost of developing and operating simulators would be  borne  by credit  institutions, who 
would also incur additional set-up costs in adapting front office operations and training front 
office  staff  in  branch  networks.  Public  authorities  would  incur  significant  set  up  costs  if 
charged  with  developing  standard  usage  profiles.  Coordination  efforts  would  raise  costs  to 
industry  representative  organisations,  credit  institutions  and  consumer  representatives 
involved  in  the  process.  Public  authorities  would  incur  additional  setup  costs  in  designing 
presentation and information requirements and recurring costs of monitoring compliance after 
entry into force. An EU level supervisor would be charged with coordinating the production 
of technical standards for the use of cost simulations, ensuring consistency in the application 
of this requirement across the internal market. 
The appeal of cost simulations has not been ascertained and they are only used on a voluntary 
basis  by  a  limited  number  of  credit  institutions.  While  they  are  mostly  useful  to  estimate 
variable cost items associated with a payment account, they suffer from similar weaknesses to 
representative examples. As noted previously, different groups of stakeholders have indicated 
either  potential  for  methodological  bias  when  developing  simulators  or  reluctance  for 
simulators to become a regulatory tool. As a result their impact on stakeholders presents the 
risk of not providing clear and comparable information presented in an understandable way. 
They  present  risks  to  industry  as  they  do  not  guarantee  improvements  in  providing  a  level 
playing  field  to  market  participants.  In  the  public  consultation,  several  representative 
associations  of  banks  could  not  support  the  development  of  standardised  cost  simulations, 
raising concerns on the effectiveness of this approach and the cost implied. Consequently, this 
option does not fulfil the objectives established in this initiative. 
Quantification of costs and benefits 

• 

Variant A: Banks provide personalised simulations or set up own usage profiles 

Benefits  to  consumers  from  changes  in  switching  behaviour  are  estimated  at  EUR  219.32 
million from 2013 to 2022. Although both options that utilise usage profiles created by credit 
institutions  (representative  examples  and  cost  simulations)  do  not  fulfil  the  objectives  of 
providing clear, comparable information on bank fees, the Commission’s estimate of benefits 
to  consumers  takes  account  of  the  potential  broader  impact  personalised  cost  simulations  – 
provided to consumers at the pre-contractual stage – could have over representative examples. 

Total  one-off  costs  to  credit  institutions  of  setting  up  own  representative  examples  are 
estimated at a range between EUR 420.77 – EUR 691.71 million. The main items of cost to 
credit  institutions  arise  from  updating  IT  systems  (EUR  139.91  –  EUR  209.87  million)  and 
marketing  and  promotional  material  (EUR  209.87  –  EUR  349.78  million)  to  set  up  cost 
simulations. This also includes the cost of developing representative account usage profiles.  

This  option  is  expected  to  generate  high  costs  to  credit  institutions  over  the  long  term  as  it 
imposes  new  procedures  on  credit  institutions  when  opening  accounts,  requiring  additional 
time  to  be  spent  by  front  office  staff  with  payment  account  clients.  Total  recurring  costs  to 
credit institutions are estimated at between EUR 2 572.48 – EUR 3 682.59 million from 2013 

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186 

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to 2022. Of this amount, additional interaction by front office staff with clients' accounts for 
an estimated, EUR 2 204.17 – EUR 3 306.25 million from 2013 and 2022.  

One-off  costs  to  Member  States  mainly  consist  of  implementing  legislation  and  are  not 
expected to be material. Recurring costs to Member States for the period from 2013 to 2022 
are  estimated  between  EUR  0.71  -  EUR  1.40  million  and  mainly  comprise  the  cost  of 
monitoring and enforcement of legislation (estimated between EUR 0.33 - EUR 0.66 each).  

Table 3.P: Costs and benefits – cost simulations using  
non-standard usage profiles set up by credit institutions 

Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs: 
 One-off:  
Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

219.32 
219.32 
Max 

691.71 
3 682.59 
4 374.30 

0.03 
1.40 
1.43 

Min 

420.77 
2 572.48 
2 993.25 

0.02 
0.71 
0.73 

• 

Variant B: Member State prescribe usage profiles 

The estimate of benefits to consumers resulting from a change in switching behaviour is at the 
same level as for Variant A above, amounting to EUR 219.32 million from 2013 to 2022. 

Total  one-off  costs  to  credit  institutions  are  estimated  between  EUR  461.12  –  EUR  757.51 
million.  The  major  cost  items  to  credit  institutions  are  of  the  same  kind  as  described  in 
Variant  A  but  are  higher,  reflecting  additional  compliance  efforts  in  adapting  marketing 
material  and  IT  systems  to  pre-defined  usage  profiles  rather  than  generating  profiles 
internally. 

Similar to variant A, recurring costs to credit institutions that are estimated at between EUR 2 
821.51  –  EUR  4  036.32  million  from  2013  to  2022,  are  impacted  upon  by  the  expected 
additional time front office staff would need to dedicate to clients to provide cost simulations, 
(EUR 2 397.51 – EUR 3 596.27),.  

One-off costs to Member States mainly consist of developing standard usage profiles and are 
estimated  to  cost  between  EUR  0.08  -  EUR  0.12.  Recurring  costs  to  Member  States  are 
expected  mainly  as  a  result  of  revisions  of  standard  usage  profiles,  monitoring  and 
enforcement  of  legal  requirements.  Total  recurring  costs  to  Member  States  are  estimated 
between EUR 0.99 - EUR 1.95 million from 2013 to 2022 and mainly comprise the costs of 
monitoring and enforcing legislation. 

Table 3.R: Costs and benefits – cost simulations using standard usage profiles 

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Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs: 
One-off:  
Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

219.32 
219.32 
Max 

757.51 
4 036.32 
4 793.83 

0.12 
1.95 
2.07 

Min 

461.12 
2 821.51 
3 282.63 

0.08 
0.99 
1.07 

5.1.7.  Option 7: Introduce EU standardised forms for the provision of ex-ante information 

on fees (standard price lists) 

Effectiveness of policy option 
EU standardised forms for ex-ante information on bank fees would essentially comprise two 
elements: a standard presentation and fully standardised fee terminology.  
First  it  would  require  the  creation  of  a  standard  format  for  a  price  list  of  fees.  This  would 
include standard categories of fees presented in a pre-defined order. It would foresee specific 
disclosures regarding information about the frequency with which fees would be charged and 
measurement  units  (e.g.  per  transaction),  together  with  additional  presentation  requirements 
covering  the  name  and  details  of  the  credit  institution,  similar  to  the  standard  presentation 
format provided for in SECCI or ESIS.  
As with SECCI and ESIS, a standard price list would need to regularise the terminology used 
to describe fees to create an EU standard for pre-contractual information. Unlike the Annual 
Percentage Rate of Charge,514 which effectively establishes the cost of a loan, there is no such 
unique,  single  measure  of  cost  that  encompasses  fees  incurred  under  a  payment  account. 
Standardising  all  fee  terminology  at  EU  level  would  be  complex;  not  all  payment  services 
instruments are commonly used throughout the EU, e.g. cheques are common in France but 
are not used at all in Belgium. The result could be that EU standard fees would not only be 
overly  cumbersome  to  be  effective,  but  they  may  also  lead  to  confusion  by  requiring 
disclosure of fee items that may not be relevant to a large number of EU citizens. 
Member  States’  responses 
the  Commission  consultation  on  payment  accounts 
acknowledged  the  need  for  coordination  across  borders  and  favoured  flexibility  to 
accommodate  national  circumstances.  Consumers  also  took  the  view  that  full  EU  level 
harmonisation of fees terminology could be a medium to long-term goal. Respondents from 
industry  held  the  view  that  harmonisation  of  fee  terminology  should  happen  at  a  national 
level, while they generally did not disagree with action coordinated by the EU.  
While  it  is  considered  that  Option  2  may  identify  commonalities  between  Member  States 
where  similar  charging  structures  are  in  operation,  a  full  EU  level  standardisation  of  fee 
terminology,  without  taking  into  account  national  circumstances  does  not  appear  to  be 
supported by stakeholders in Member States.  
Impacts of policy option and efficiency 
The  impact  on  consumers  could  vary  widely  depending  on  the  relevance  of  a  European 
standard price list to the fees actually incurred by EU citizens. As underlined by a majority of 
consumers responding to the public consultation, Member State standardisation of major fee 

to 

514  As referred to in the Consumer Credit Directive (Directive 2008/48/EC on credit agreements for consumers and 

repealing Directive 87/102/EEC, OJ L 33 of 22.05.2008, p. 66). 

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188 

   EN 

 
 
 
 
 
 
 
                                                 
items  as  described  under  Option  2  is  a  prerequisite  to  determining  possible  commonalities 
between Member States (or groups of Member States). 
This option would generate costs to the EU in developing a fully standardised EU price list, as 
opposed to simply those fees common to all Member States. Member States would also incur 
set-up costs through coordination efforts with the EU. Recurring costs to credit institutions in 
complying  with  this  requirement  would  be  largely  similar  whether  action  were  taken 
nationally or at EU level.  However one-off costs would be higher in the event of EU-level 
standardisation:  this  would  require  a  greater  degree  of  adaptation  on  the  part  of  credit 
institutions  to  comply  with  full  standardisation,  that  would  not  allow  for  flexibility  to  take 
account of national banking practices and cultures would be affected. 
Quantification of costs and benefits  

• 

• 

• 

• 

The  Commission  estimates  that  changes  in  switching  behaviour  could  result  in  a 
benefit to consumers of EUR 438.65 million, measured from 2013 to 2022. 

Total initial outlay for credit institutions is estimated at between EUR 148.89 – EUR 
252.07  million.    Costs  to  credit  institutions  in  adapting  marketing  and  promotional 
material (EUR 107.51 – EUR 179.19) and from internal communication and training 
costs (EUR 33.59 – 58.79 million) are expected to be higher under this option than if 
EU standard terminology were to be undertaken only for a limited number of fees as 
described  in  Option  2.  Other  relevant  one-off  costs  to  credit  institutions  including 
changes  to  IT  systems  to  produce  price  lists  in  standard  form  would  not  vary 
significantly to those estimates for Option 2.  

Total  recurring  costs  to  credit  institutions  are  estimated  at  between  EUR  224.89  – 
EUR 297.51 million from 2013 to 2022 and mainly comprise additional staff costs as 
a result of incremental compliance requirements.  

One-off costs to the European Institutions have not been quantified. Costs to Member 
States mainly comprise those of monitoring and enforcing legislation.  

Table 3.S: Costs and benefits – EU standard form for ex-ante fee disclosure 

438.65 
438.65 
Max 

Min 

banks 

Introduce 
for 

an 
to 
ex-post 
information  on  the 
incurred 

5.1.8.  Option  8: 
obligation 
provide 

fees 

Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs: 
 One-off:  
 Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

148.89 
224.89 
373.78 

252.07 
297.51 
549.58 

Effectiveness 
of 
policy option 
that 
information 
In order to provide 
effectively, ex-post 
can 
used 
be 
to be provided in a 
information  needs 
and  to  be  concise. 
dedicated summary 
However it should also provide sufficient detail of major elements of fees incurred to enable a 
consumer  to  understand  what  fee  expenditure  relates  to,  and  to  assess  the  need  to  either 
modify consumption patterns or move to another provider.  
This  option  directly  addresses  the  objective  of  making  consumers  aware  of  costs  actually 
incurred, as obtaining a summary of information about charges incurred is key for a consumer 
to understand the cost holding an account.  
This  option  is  effective  in  combination  with  Options  2  and  4B  and  the  ex-post  fee  items 
would match the ex-ante fee items in Option 2. This option - in combination with ex-ante fee 

0.01 
0.33 
0.34 

0.02 
0.64 
0.66 

EN 

189 

   EN 

 
 
 
 
 
 
 
comparison  and  presentation  requirements  -  could  help  improve  customer  mobility  while 
nurturing competition in the payment accounts market. 
Impacts of policy option and efficiency 
The  impact  of  this  option  on  consumers  would  be  very  positive.  This  benefit  would  be 
maximised if ex-ante and ex-post information requirements were coordinated. This could be 
achieved by ensuring that the major fee items selected under option 2 - disclosed in a standard 
price  list  -  included  ex-post  fee  information.  This  could  be  provided  alongside  regular 
information on total costs incurred. In the public consultation, almost all consumers stressed 
the key role of clear and timely information on actual fees paid and called for action in this 
area. 
As described in the problems section, the approach taken by Member States to the provision 
of ex-post information on fees incurred varies widely ranging from a requirement of regular, 
dedicated  and  concise  information  in  some  Member  States  to  no  requirements  in  others.  At 
least  11  Member  States  have  adopted  specific  requirements  for  ex-post  information;this 
option would have an important impact on harmonisation within the Internal Market and on 
the provision of equal levels of consumer protection.  
Public  authorities  would  mainly  incur  the  cost  of  defining  the  content  and  presentation  of 
summary  fee  sheets,  in  collaboration  with  representatives  of  credit  instutions  and  consumer 
organisations. There would also be recurring costs associated with monitoring compliance of 
the  requirements.  An  EU-level  supervisor  could  coordinate  the  activities  of  Member  State 
competent authorities during the set-up stage, overseeing the selection of those fees common 
to  all  Member  States,  and  ensuring  the  consistent  application  of  rules  within  the  internal 
market.  
Credit institutions are expected to incur costs in updating their information systems to be able 
to  provide  a  summary  of  information  at  a  level  of  detail  determined  by  Member  States. 
However, as confirmed by the contributions to the public consultation, most of the financial 
services industry has already adopted the practice of providing consumers with statements on 
a regular basis.  
Quantification of costs and benefits  

• 

• 

• 

The  Commission  estimates  that  benefits  to  consumers  of  providing  ex-post 
information in a dedicated summary form, particularly if information is structured to 
match  ex-ante  fee  presentation  requirements,  would  accrue  in  the  form  of  savings 
through  better  account  management  and  through  changes  to  consumer  switching 
behaviour. These benefits are estimated to generate savings to consumers amounting 
to EUR 2 702.57 and EUR 1 462.16 million respectively from 2013 to 2022. 

Credit institutions would incur one-off costs mainly through adapting IT systems to 
filter  charge  information,  developing  summary  form  fee  statements  and  due  to 
internal reporting, amounting to EUR 192.42 – EUR 326.31 million. Total recurring 
costs  to  credit  institutions  are  estimated  at  between  EUR  260.37  –  EUR  492.45 
million from 2013 to 2022 and mainly comprise additional staff costs as a result of 
incremental  compliance  requirements  and  the  cost  of  disseminating  ex-post  fee 
information in a standard form. 

Costs to Member States mainly comprise monitoring and enforcement of legislation. 
One-off  costs  are  estimated  between  EUR  0.07  –  EUR  0.11  million.  The  recurring 
costs to Member States are estimated at EUR 0.81 – EUR 1.59 million from 2013 to 
2022. 

Table 3.T: Costs and benefits – a requirement to provide ex-post information of fees incurred 

EN 

190 

   EN 

 
Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Better account management 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs: 
One-off:  
Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

1 462.16 
2 702.57 
4 164.73 
Max 

326.31 
492.45 
818.76 

0.11 
1.59 
1.70 

Min 

192.42 
260.37 
452.79 

0.07 
0.81 
0.88 

5.1.9.  Option 9: Introduce EU standardised forms for the provision of ex-post information 

on fees 

Effectiveness of policy option 
EU  standardised  forms  prescribing  ex-post  information  requirements  would  establish 
presentation  requirements  covering  all  personal  payment  account  fees  developed  at  an  EU 
level.  Presentation  requirements  would  include  aspects  such  as  the  level  of  detail  to  be 
provided, information on unit costs, the number of charge events, total costs incurred as well 
any debit incurred and any credit interest earned. 
As  indicated  in  option  8,  the  provision  of  ex-post  information  would  be  most  beneficial  if 
combined  with  options  for  ex-ante  information  provision,  focusing  on  providing  consumers 
with detailed information about the most relevant fees incurred, for example those indicated 
in a standard ex-ante price list. For reasons discussed in the analysis of Options 2 and 7 above, 
standardisation  of  fee  terms  would  only  be  effective  at  national  level,  after  EU  level 
standardisation of the fees common to all Member States. 
Including  all  personal  payment  account  fees  in  any  EU  action  would  not  be  helpful  to 
consumers  and  may  in  fact  be  cumbersome,  making  such  a  tool  unusable.  As  a  result  this 
option is not considered more effective than option 8 above.  
Impacts of policy option and efficiency 
The impact of this option on consumers is not expected to be as positive as the impact brought 
about by option 8, since the price list would cover all fees across the EU and not just those 
most relevant to consumers. The benefit derived from standard presentation requirements and 
coherence  with  ex-ante  information  requirements  would  be  similar  in  both  options  8  and  9. 
This  option  is  likely  to  set  up  the  requirement  to  present  fee  items  in  a  summary  sheet  that 
may not represent major items of expenditure incurred by a large number of EU citizens. As 
indicated  under  option  8,  most  respondents  to  the  public  consultation  from  the  financial 
services industry recalled current the current practices that have been already developed and 
used in terms of providing consumers with statements on a regular basis. 
This option would generate costs to the EU to develop a standard summary form that provides 
ex-post information on fees incurred and identify every personal payment account fee in the 
EU. Costs to credit institutions in complying with this requirement would not vary to a large 
extent if fee lists are set up at the level of Member States or the EU.  
Quantification of costs and benefits  

• 

The  Commission  estimates  that  benefits  to  consumers  would  accrue  in  the  form  of 
savings  through  better  account  management  and  changes  to  consumer  switching 
behaviour  amounting  to  EUR  954.48  and  EUR  292.43  million  respectively  from 
2013 to 2022. 

EN 

191 

   EN 

 
 
 
 
 
 
 
• 

• 

• 

Credit institutions would incur one-off costs mainly through adapting IT systems to 
filter  charge  information,  develop  summary  form  fee  statements  and  reporting 
internally. This would amount to EUR 345.71 – EUR 681.55 million. These costs are 
expected to be higher than if summary ex-post fee statements were set up by Member 
States on the basis of common EU criteria given the greater potential for a departure 
from national banking practices and cultures resulting in greater adaptation efforts by 
credit institutions. 

Total recurring costs to credit institutions are estimated to cost between EUR 587.74 
–  EUR  1  100.48  million  from  2013  to  2022  and  mainly  comprise  additional  staff 
costs  as  a  result  of  incremental  compliance  requirements  and  the  cost  of 
disseminating information in standard form. 

Costs to Member States mainly comprise monitoring and enforcement of legislation. 
One-off  costs  are  estimated  between  EUR  0.03  –  EUR  0.05  million.  The  recurring 
costs to Member States are estimated at EUR 0.71 – EUR 1.40 million from 2013 to 
2022. 

Table 3.U: Costs and benefits – a requirement to provide ex-post information of fees incurred 

Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 
Better account management 
Total consumer benefits: 
Total EU costs (million EUR) 
Credit institution costs: 
One-off:  
Recurring: 
Total credit institution costs: 
Member State costs: 
One-off:  
Recurring: 
Total Member State costs: 

292.43 
954.48 
1 247.11 
Max 

681.55 
1 100.48 
1 792.03 

0.05 
1.40 
1.45 

Min 

345.71 
587.74 
933.45 

0.03 
0.71 
0.74 

EN 

192 

   EN 

 
 
 
 
 
 
 
ANNEX IV 
PAYMENT ACCOUNT SWITCHING 

1. 

PROBLEMS 

1.1. 

General problem: restricted customer mobility 

Comparison with other network industries 

Graph IV.A: Annual switching rates for different network industries 

Source: Monitoring consumer markets in the European Union, GFK, 2011 

Graph IV.B: Overall switching of products/services within network industries 

Source: Monitoring consumer markets in the European Union, GFK, 2011 
In mobile telephony, for example, academic research515 measured the impacts of introduction 
of  mobile  number  portability  on  switching  rates  and  on  benefits  resulting  from  increased 
efficiency and price reductions due to strengthening of competition in the mobile telephony 
sector.516  It  concluded  that  in  countries  where  a  good  quality  mobile  number  portability 
service was introduced517 average prices518 fell by 6.6% in the short term and by 12% over the 

515  Measuring the Benefits of Mobile Number Portability, Sean Lyons, Department of Economics Trinity College Dublin, 

2006, main conclusion on p. 27, http://www.tcd.ie/Economics/TEP/2006_papers/TEP9.pdf  

516  To estimate the average treatment effects of mobile number portability on retail prices and switching by customers, the 
study performed an econometric analysis of international time-series cross-section data of 38 countries for the time 
period 1999-2004. 

517  Good quality of the service was defined as portability service with duration of up to 5 days. 
518  Defined as real revenue per minute. 

EN 

193 

   EN 

 
 
 
                                                 
long  run.  The  quarterly  switching  rates519  increased  by  13.6%  over  the  short  term  and  by 
34.7% over the long term. These results were confirmed by another study520 that analysed the 
impact of mobile number portability on prices in the EU15 countries from 1998 to 2002 and 
tested the impact of both regulatory (e.g. legislation on mobile number portability) and non-
regulatory factors (e.g. income per capita in purchasing power parities, total population). The 
findings  suggest  that  number  portability  leads  to  a  reduction  in  prices,  since  competition  is 
more  intense  and  prices  decreased  in  countries  where  mobile  number  portability  was 
introduced. 
Are low switching rates a problem? 
Low switching rates are not, per se, a sign of insufficient competition. Low switching levels 
in retail banking markets are problematic only if consumers are not willing and able to switch 
rapidly when differences in fees or product features appear. A number of studies demonstrate 
that there is a significant discrepancy between the percentage of consumers unsatisfied with 
their  bank  and  those  that  have  not  thought  about  switching  their  banks.521  Dissatisfied 
customers are more likely to switch accounts than satisfied customers, but only 25% of very 
dissatisfied  customers,  and  40%  of  extremely  dissatisfied  customers,  are  likely  to  switch. 
High levels satisfaction can clearly not alone explain low switching rates.522  
Restricted  customer  mobility  has  an  adverse  impact  on  both  consumers  and  the  banking 
industry. First, it increases providers’ market power resulting in lower incentive for them to 
innovate  and  seek  cost-efficiencies.  Consequently,  'locked-in'  customers  experience  higher 
prices and a reduced level of services. Second, it affects the supply side of banking services, 
as it is one of the factors that limit the possibility for efficient credit institutions to enter new 
markets or expand their client base. 

1.2. 

Specific problems 

1.2.1. 

Inadequate information 

EBIC  reported  that  information  on  payment  account  switching  should  be  available  on  the 
national banking associations' websites and websites of banks and invited those banks that did 
not yet integrate the information on their webpage to do so.523 Regarding the staff awareness, 
they  stated  that  "the  situation  will  in  any  case  improve  over  time  as  the  branch  staff  will 
naturally  get  acquainted  with  this  new  service."524  However,  a  number  of  surveys  and 
mystery  shopping  studies  cited  in  the  main  report  and  below  have  come  to  different 
conclusions.  

Table 4.A: Share of switching enquirers answering 'YES' to the following questions: 

Did they explain how direct debits and standing orders would be transferred? 
Did they explain how payments would be cancelled at your old bank? 

Did they explain that they would inform your old bank and transfer the balance of your account? 

Did they explain that they would provide a dedicated switching team to do everything for you? 
Did  they  make  it  clear  that  you  would  not  have  to  contact  your  old  bank  at  all  during  the  switching 
process? 

43% 
32% 

35% 

18% 

26% 

519  Proxied by 'churn' measured on a quarterly basis. 
520  Regulation of Mobile Telephony across the European Union: An Empirical Analysis, Lukasz Grzybowski, University of 

Munich, Journal of Regulatory Economics 28:1, p.47-67, 2005 http://www.researchgate.net/publication/   
5156175_Regulation_of_Mobile_Telephony_across_the_European_Union_An_Empirical_Analysis  

521  PCA Consumer Research Findings, Quadrangle-2011, p.13 

522 

http://www.quadrangle.com/PCA_switching_consumer_research.pdf 
ICB Final report recommendations, ICB, September 2011, p. 184, 
http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf  

523  Review of the EBIC Common Principles on bank account switching in the European Member States, EBIC, 2011, p.4. 
524 

Ibid. 

EN 

194 

   EN 

 
                                                 
Were you given information on how long each step took?  
Was it made clear that switching service was free?  

21% 
57% 

Source: Consumer Market Study on the consumers’ experiences with bank account switching with reference to  
the Common Principles on Bank Account Switching, GfK, January 2012. 

In a review of a sample of 136 bank websites from all EU countries, BEUC concluded that in 
10% of the cases, the relevant information was difficult to find and in 24% of cases, there was 
no information at all available on the website. Moreover, the websites of some of the largest 
banks  in  "some  countries"  were  amongst  those  that  failed  to  provide  information  about 
switching.525  National  research  confirms  these  findings.  In  France,  a  survey526  in  1 746 
branches  found  that  only  14%  of  branches  had  information  on  switching  freely  available  in 
form of leaflets and information was provided spontaneously in only 35% of cases where the 
consumer expressed a wish to change the bank. 

1.2.2.  Complexity of switching process 

Switching current accounts is a complex process. In order for customers not to be discouraged 
by  this  process,  ideally,  the  process  should  be  short,  with  the  least  possible  time  and  effort 
incurred  on  the  part  of  the  consumer  and  free  of  errors.  Many  consumers,  however,  find 
switching  to  be  too  much  effort.  For  example,  in  2011  around  1%  of  EU  citizens  tried  to 
switch payment  accounts but gave up.527 This figure was slightly higher in Estonia, France, 
Luxembourg  and  Slovakia  (2%).528  In  another  survey  from  2009,  6%  of  consumers 
(equivalent to around 21 million consumers) felt that the cost and effort of switching was too 
much.529 In a UK survey,530 nearly two thirds of respondents indicated 'too much hassle' as the 
reason why they have not switched or not considered switching. 
Difficulties transferring standing orders and direct debits represent one of the major barriers to 
account mobility. As part of an EU mystery shopping exercise531 in 2011 around 400 mystery 
shoppers  were  instructed  to  perform  a  switch  to  a  new  bank  including  the  transfer  of  a 
standing order from the old payment account. Out of the 276 shoppers who were said to be 
helped, two thirds were told that the bank could not assist them with the transfer of standing 
orders and only 19% successfully switched their payment account including a standing order. 
While  the  data  for  Member  States  differs  significantly;  it  can  be  noted  that  the  overall  low 
success rate cannot be explained by a few 'black sheep' but a problem across the board.  

Table 4.B: Overview: Results of attempted switches: 

Mystery 
shoppers 

Successful application for 
switching service 

Successful switchers incl. one 
standing order 

Austria 

Number 

Number 

15 

15 

% 

100% 

Number 

13 

% 

87% 

525  Easy switching? – A long way to go; BEUC Monitoring Report of the 'Common Principles for Bank Account Switching', 

BEUC, January 2011, p.6-12, 
http://docshare.beuc.org/docs/1/DFMPDNNCIAHOOIFKIKKAABFKPDWY9DBYC69DW3571KM/BEUC/docs/DLS/
2011-00183-01-E.pdf 

526  Tarifs et mobilité bancaires: le désolant palmarès des Banques, UFC Que Choisir, October 010, pp.14-15, 

http://image.quechoisir.org/var/ezflow_site/storage/original/application/961abc610b3b1f8bd82e9ad5ed117a5f.pdf 

527  Special Eurobarometer on Retail Financial Services, European Commission, March 2012,  p.87, 
http://ec.europa.eu/internal_market/finservices-retail/docs/policy/eb_special_373-report_en.pdf  
Ibid. 

528 
529  Consumers' views on switching service providers, Eurobarometer 243, European Commission, January 2009, p. 35, 

http://ec.europa.eu/public_opinion/flash/fl_243_en.pdf 

530  Stick or twist? An analysis of consumer behaviour in the personal current account market, Consumer Focus, October 

2010, p.21, http://www.consumerfocus.org.uk/files/2010/10/Stick-or-twist-for-web1.pdf. 

531  Consumer Market Study on the consumers’ experiences with bank account switching with reference to the Common 

Principles on Bank Account Switching, GfK, January 2012,  pp 28, 292, 
http://ec.europa.eu/consumers/rights/docs/switching_bank_accounts_report_en.pdf 

EN 

195 

   EN 

 
 
  
                                                 
Belgium 

Bulgaria 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg  

Malta  

Netherlands  

Poland  

Portugal  

Romania 

Slovakia  

Slovenia  

Spain 

Sweden  

UK  

EU 27 

15 

15 

10 

15 

15 

15 

15 

20 

20 

15 

15 

15 

15 

15 

15 

9 

10 

15 

15 

15 

15 

15 

15 

15 

15 

19 

12 

2 

0 

7 

10 

15 

12 

9 

15 

5 

15 

15 

14 

4 

6 

9 

1 

14 

15 

12 

0 

14 

14 

11 

14 

16 

403 

276 

80% 

13% 

0% 

47% 

67% 

100% 

80% 

45% 

75% 

33% 

100% 

100% 

93% 

27% 

40% 

100% 

10% 

93% 

100% 

80% 

0% 

93% 

93% 

73% 

93% 

84% 

67% 

4 

1 

0 

3 

2 

1 

3 

5 

4 

0 

3 

9 

3 

2 

3 

1 

0 

3 

2 

4 

0 

1 

0 

0 

7 

4 

78 

27% 

7% 

0% 

20% 

13% 

7% 

20% 

25% 

20% 

0% 

20% 

60% 

20% 

13% 

20% 

11% 

0% 

20% 

13% 

27% 

0% 

7% 

0% 

0% 

47% 

21% 

19% 

Source: Consumer Market Study on the consumers’ experiences with bank account switching with reference to the Common Principles on 
Bank Account Switching, GfK, January 2012. 
In  an  Austrian  study532,  direct  debit  transfers  were  singled  out  as  the  main  concern  for 
switching and were not transferred by any of the account providers involved in the mystery 
shopping  study.  Account  providers  could  not  guarantee  that  all  direct  debits  would  be 
transferred during the switch as neither the new nor the old bank has the relevant information 
on direct debits of third parties. Erroneous transfers of direct debits were said to be possibly 
resulting in additional charges to the consumer, such as reminder fees or reversing payment 
fees. Due to the high number of errors, the Austrian consumer organisation recommended that 
consumers  should  retrieve  all  information  on  direct  debits  from  old  statements  and  directly 
inform  all  relevant  third  party  creditors  in  order  to  avoid  problems.  While  this  national 
mystery  shopping  exercise  seems  to  contradict  the  results  of  Table  4.A  above,  the  national 
exercise  focused  on  direct  debts,  while  the  EU  mystery  shopping  covered  the  transfer  of 
standing orders. 
Overall,  the  problem  of  potential  misdirection  of  payments  has  been  identified  as  the  most 
prominent  inconvenience  of  switching  by  all  stakeholders.533  A  UK  consumer  organisation 

532  Kontowechsel: Wie funktioniert er?, VKI, March 2010, p.12, 

http://wien.arbeiterkammer.at/bilder/d118/Studie_Kontowechsel2010.pdf  

533  2012 Public consultation on bank accounts (see footnote 11), p. 195 

EN 

196 

   EN 

 
                                                 
stated that "Problems with direct debits and standing orders were the biggest single source of 
difficulties  experienced  during  the  switching  process"  and  that  "nearly  36%  experienced  a 
problem with direct debits or standing orders." 534  

2. 

SUMMARY OF PROBLEMS AND CONSEQUENCES 

Table 4.C: Problems and consequences 

Problems 

Consequences 

Complexity of switching process 
=> Time required for the switching 
=> Uncertainty in the duration of the switching process 
=> Errors resulting in delay or non-execution of recurrent 
payments, in particular direct debit transactions 

Inadequate Information  
=> Limited awareness of the switching service by consumers 
=> Limited knowledge of the switching service by bank staff 

Psychological factors (negative perceptions) 

No cross-border switching service 

Restricted cross-border activity 
=> Characteristics of switching process restrict consumer cross-border 
activity 
=> Increased costs for credit institutions operating in several Member 
States 
=> Non-level playing field between market actors  
=> Restricted market entry/expansion 
=> Missed business opportunities 

Restricted product choice 
=> Reduced product choice for financial and non-financial products 
and services 
=> Product/service received not adapted to customer needs/preferences 
=> Higher prices for financial and non-financial products and services 
=>  Higher costs of shopping around 

Low consumer satisfaction => lower consumer confidence 

3. 

DETAILED ASSESSMENT OF THE POLICY OPTIONS 

3.1. 

Possible policy instruments 

Each  of  the  above  options  could  be  given  effect  through  a  variety  of  different  policy 
instruments.  These  include  an  industry  self-regulation  (code  of  conduct),  EU  level  non-
binding  measures  such  as  a  Recommendation  or  Communication,  or  binding  EU  measures 
such as legislation in the form of a Regulation or Directive.  

1. No action 
2.  Ensure  that  the  switching  services 
follow the Common Principles (CP) 
3.  Improve  the  effectiveness  of  the 
CP  
3 (A) Improve the existing CP 
3 (B) Broaden the scope of the CP to 
EU-wide cross-border switching 
4.  Set  up  an  automatic  redirection 
service  for  all  receipts  and  payments 
from an old to a new account  
4 (A) Introduce a domestic automatic 
redirection service 
4 
Introduce 
redirection service 
5. 
Introduce 
portability 
5  (A)  Domestic  payment  account 
portability 
5 (B) EU payment account portability 

an  EU-wide 

payment 

account 

(B) 

Table 4.CA: Policy options versus instruments  
Communication 

Self-regulation 

Recommendation 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

Directive 

Regulation 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

A  Commission  Communication  would  be  unable  to  achieve  any  of  the  objectives,  as  it  is  a 
tool to communicate information to the Member States rather than effect a particular change. 
The following sections will assess the impact of the policy options and will describe which 

534  Which! Consultation response, p.6, http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm  

EN 

197 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
policy  instrument  is  the  most  appropriate  to  use,  as  well  as  the  underlying  reasons  for  the 
choice. 

3.2. 

Option 1: No action 

• 

Effectiveness of policy option 

When assessing the effectiveness of no EU action, recent developments at Member State level 
need to be taken into account. As demonstrated in Sub-section 3.2.3 of the main report, the 
Common Principles are not sufficiently applied by payment account providers in the majority 
of Member States. Consequently, the defined objectives are not being met or are only partially 
met. The effectiveness of 'no action' is highly dependent on the application/non-application of 
the  Common  Principles.  In  most  cases  –  partly  due  to  the  non-binding  character  of  the 
Common  Principles  –  it  is  a  discretionary  choice  of  account  providers.  In  any  event,  the 
Common  Principles  do  not  contain  any  explicit  provisions  on  raising  awareness  among 
consumers  on  the  existence  of  switching  services  or  any  requirement  for  improving  staff 
awareness  of  the  switching  process.  As  a  result,  it  is  not  ensured  that  consumers  receive 
adequate assistance during the switching process. In addition, no substantial reduction of the 
risk of lost/missed/inaccurate transactions resulting from switching of payment accounts can 
be  expected,  as  third  parties  need  to  be  informed  of  changes  in  payment  account  details 
'manually'.  Furthermore,  as  the  Principles  relate  to  domestic  switching  only,  consumers 
wishing to switch cross-border are not helped. 
A  number  of  Member  States  have  decided  to  go  beyond  what  is  expected  by  the  self-
regulatory  principles  in  different  ways.  Ireland,  for  example,  has  decided  to  render  the 
voluntary  switching  code  legally  binding  to  improve  the  application  of  the  Common 
Principles  via  stricter  monitoring  and  enforcement  measures  by  public  authorities.  This 
implies that Ireland has already opted for Option 2 and therefore fulfils the objectives to the 
extent of that option. 
In  order  to  decrease  the  risk  of  lost/missed/delayed/inaccurate  transactions  resulting  from 
switching  of  payment  accounts,  the  Netherlands  have  introduced  a  re-routing  system  for 
payment  orders  sent  to  the  'old'  payment  account  to  be  automatically  sent  on  to  the  'new' 
account.  A  similar,  though  technically  different  system,  is  currently  being  developed  in  the 
United Kingdom and should become operational in September 2013.  
These  actions  taken  by  the  Member  States  aim  to  facilitate  domestic  switching  systems. 
However,  as  the  approaches  differ,  they  might  lead  to  an  even  less  consistent  regulatory 
environment,  making  the  potential  cross-border  switching  of  payment  accounts  even  more 
difficult  and  hindering  the  potential  benefits  of  a  pan-European  payment  account  market  in 
the future. 

• 

Impacts of policy option on stakeholders and efficiency 

In the absence of any action, the consequences outlined in Section 3.4 of the main report will 
persist. Consumer mobility remains restricted and consumers are unable to reap the benefits 
of a well-functioning competitive internal market. Moreover, due to different frameworks in 
different  Member  States,  consumers  do  not  enjoy  the  same  level  of  service  by  the  payment 
providers. The fact that different Member States look for national solutions going beyond the 
requirements  of  the  Common  Principles  further  amplifies  these  divergences  and  creates 
further obstacles to an integrated internal market. 
The overall impacts of this policy option would be negative for consumers. Direct and indirect 
costs to consumers are likely to remain, meaning that barriers to switching would persist. 

EN 

198 

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Generally,  consumer  and  civil  society  representatives  have  voiced  clear  discontent  with  the 
status quo and consider the voluntary character of the Common Principles to be a major cause 
of insufficient switching services.535 The Financial Services User Group sees difficulty in the 
fact that self-regulation does not provide for sanction; therefore while voluntary commitments 
might be respected in some banking communities, they do not result in behavioural change in 
others.536 For payments account providers, 'no action' is generally the preferred way forward: 
they believe that switching services complying with the Common Principles are in place and 
even  though  they  recognise  certain  shortcomings  in  relation  to  misdirection  of  payments 
during the switching process, they do not see a need for additional measures.537  
This option would be the least expensive in terms of short-term costs. Generally, providers of 
low quality products or those charging above average prices would benefit from no action, as 
they  would  be  able  to  remain  competitive  due  to  restricted  customer  mobility.  Providers 
offering  better  quality  and  higher  value  for  money  products  and  service  to  their  (potential) 
customers would be affected negatively; the value-added to the customer of switching might 
not exceed actual or perceived switching costs. Therefore, more competitive providers would 
be  penalised  and  limited  in  their  attempts  to  expand  their  customer  base  domestically  and  
across Europe.  
The impact of 'no action' upon Member States would be neutral, unless they decided to take 
any  national  measures.  If  they  acted  unilaterally  (as  has  already  happened  in  Ireland), 
providers would be affected in a similar way as described in Option 3A or, in the case of the 
Netherlands  or  the  United  Kingdom,  as  described  by  Option  4A.  If  action  were  taken  at 
national  level  alone,  all  stakeholders  would,  long-term,  encounter  consequences  from  an 
inconsistent  regulatory  framework  negatively  affecting  the  functioning  of  retail  banking 
markets. Providers would be hindered in their attempts to enter new markets, and consumers 
would be offered fewer products of inferior quality.  

3.3. 

Option 2: Ensure that the switching services follow the Common Principles 

• 

Effectiveness of policy option 

Ensuring  the  application  of  Common  Principles  should  reduce  the  complexity  and  increase 
the certainty of the switching process. However, as the Common Principles do not contain any 
explicit provisions on raising awareness among consumers on the existence of the switching 
services or any requirement to improve staff knowledge of the switching process, it would not 
ensure that consumers receive adequate assistance during the switching process. In addition, it 
would not lead to any significant reduction of the risk of lost/missed/inaccurate transactions 
resulting from switching of payment accounts, as third parties would need to be informed of 
changes in payment account details manually. Furthermore, as the Common Principles do not 
contain any provisions on cross-border switching, their application on national level would be 
inconsistent  and  may  preclude  cross-border  switching.  The  potential  introduction  of  27 
different  national  legal  regimes  could  hinder  potential  benefits  from  a  future  pan-European 
payment account market. 
In conclusion, this option taken alone would produce insufficient effects to meet the defined 
objectives.  Moreover,  the  effectiveness  of  this  option  would  be  highly  dependent  on  the 
policy instrument, if any, chosen by Member States.  

• 

Impacts of policy option on stakeholders and efficiency 

535  2012 Public consultation on bank accounts (see footnote 11), p.10.  
536  FSUG response to the 2012 Public consultation on bank accounts (see footnote 11), p.12.  
537  2012 Public consultation on bank accounts (see footnote 11), p.11-12.  

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Consumers should, in principle, become more aware of switching processes and increasingly 
gain the confidence to ask their 'new' bank to provide them with the service. This increased 
confidence could also encourage shopping around for a better product. Consumers would be 
offered  an  improved  service  from  account  providers  and  be  less  restricted  in  their  mobility. 
However, consumers may still be confronted with a time-consuming, complex process if they 
were to encounter insufficiently knowledgeable staff, and could continue  to  face difficulties 
with the transfer of recurrent payments. Furthermore, consumers wishing to switch provider 
cross-border would be unable to do so: cross-border provisions are not foreseen. 
Payment account providers that have not fully implemented or correctly applied the Common 
Principles  would  incur  one-off  costs.  These  would  consist  of:  adaptation  of  IT  systems  and 
business processes to comply with the Common Principles and monitor internal compliance; 
costs of staff  training on the  switching process; and updating website/branch  information to 
include information on the switching service. Furthermore, they would incur recurrent costs 
relating  to  running,  monitoring  compliance  with  and  reporting  upon  the  switching  service. 
However,  providers  wishing  to  expand  their  client  base  and/or  enter  new  markets would  be 
able to benefit from moderately increased customer mobility and a more level-playing field. 
This  option  could  benefit  wider  society  by  creating  a  more  competitive  environment  due  to 
increased customer and provider mobility. 
For Member States, the impact of this option would be limited. Some costs would be incurred 
for  running  an  awareness  campaign.  Additionally,  they  would  incur  monitoring  costs  and 
costs  of  reporting  to  the  EU.  Further  costs  to  Member  States  would  depend  on  the  policy 
instrument chosen. 
This option could be implemented in various ways. First, scoreboards providing information 
on  the  success/failure  of  switching  between  account  providers  could  be  developed.  The 
Commission  could  also  engage  in  more  in-depth  monitoring  (e.g.  annual  reports).  Second, 
Member  States  could  designate  a  competent  authority  that  would  be  responsible  for 
monitoring  the  application  of  the  Common  Principles  –  this  might  involve  conducting 
mystery shopping exercises and reporting on the results. To increase consumer awareness of 
the switching service, Member States could undertake information campaigns.  
The policy instruments could be self-regulatory or binding. First, the Commission could issue 
a  Recommendation  inviting  Member  States  to  endorse  the  EBIC  Common  Principles. 
Member  States  would  be  free  to  determine  how  best  to  ensure  the  application  of  the  EBIC 
Common Principles within their territory – through self-regulation or through legal measures. 
Secondly,  the  Commission  could  make  the  Common  Principles  on  bank  account  switching 
binding  at  EU  level.  In  this  case,  Member  State  authorities  would  be  responsible  for 
monitoring  compliance,  enforcement  of  the  principles  and  reporting  of  results  to  the 
Commission. Member State monitoring could take different forms, such as mystery shopping, 
reporting obligations, etc. 
Generally,  consumers  have  expressed  a  clear  preference  for  a  legally  binding  approach, 
arguing  that  the  Common  Principles  have  been  in  place  for  three  years,  but  were  applied 
poorly.  So  far  the  only  Member  State  that  has  adopted  legal  measures  is  Ireland.538A  great 
majority of financial services industry representatives, on the other hand, would prefer that the 
Principles remain voluntary; they feel that binding measures might not adequately address the 

538  Code of Conduct on the Switching of Current Accounts with Credit Institutions, Republic of Ireland, 2010, 

http://www.centralbank.ie/regulation/processes/consumer-protection-
code/Documents/Code%20of%20Conduct%20on%20the%20Switching%20of%20Current%20Accounts%20with%20Cr
edit%20Institutions%201%20October%202010.pdf 

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specific needs of national banking markets and might not be flexible enough to adapt to future 
market developments.539  
Outside the EU, recent legal measures aiming at facilitating payment account switching have 
recently  (July  2012)  been  taken  in  Australia.  The  adopted  measures  including  switching 
provisions  similar  to  the  Common  Principles,  though  go  beyond  these by  not  only  assisting 
the consumer by informing third parties to his/her direct debits/credits (by providing standard 
letters), but by actually performing this task on behalf of the consumer.540 
In the event that the Common Principles were made legally binding at EU level, in case of a 
Directive,  Member  States  would  incur  one-off  legislative  costs  and  recurring  enforcement 
costs. Ireland would be the exception. If the legal instrument were a regulation, there would 
be no one-off costs to the Member States for the adoption of national legal measures, but costs 
of legislating would be incurred at EU level. 

The  overall  impacts  on  stakeholders  are  likely  to  be  limited  and  depend  on  the  instrument 
chosen.  As  demonstrated  in  Section  7.6  of  the  main  report,  if  binding  measures  were 
introduced,  the  impact  on  Member  States  and  payment  account  providers  would  be  slightly 
negative due to higher additional costs incurred. However, the positive effects for consumers 
would likely be significantly higher with a possibility of enforcement.  

All Members States would be affected by this option, though only to a small extent. Ireland is 
likely to be affected only very marginally (e.g. if reporting to the EU is made obligatory), as it 
already  has  introduced  switching  legislation.  The  Netherlands  and  Denmark  would  also  be 
affected only marginally541, but they would potentially incur legislative costs. 

• 

Quantification of costs and benefits 

A summary of quantified costs and benefits is provided in Table 4.D. 

Table 4.D: Costs and benefits – Ensure compliance with the  
existing Common Principles at domestic level 

Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 

Total consumer benefits: 

Total EU costs (million EUR) 

Credit institution costs: 
 One-off:  

 Recurring: 

Total credit institution costs: 

Member State costs: 

One-off:  

 Recurring: 

Total Member State costs: 

Min 

16.8 

228.8 

245.6 

1 462.2  

1 462.2  

Max 

32.9  

395.7  

428.6  

3.2 

18.8 

22.0 

The  total  cost  of  implementing  this  option  to  the  industry  has  been  estimated  at  between 
EUR 246–429  million.  These  include  one-off  costs  of  EUR 17-33 million  for  adapting  IT 
systems  and  business  processes  to  facilitate  the  switching  process;  initial  staff  training  and 
updating  website  information  on  the  switching  process;  and  time  spent  by  banks'  legal 

Ibid., p.14.  

539 
540  Australian banking reforms, Australian Government, July 2012, 

http://www.bankingreforms.gov.au/content/Content.aspx?doc=switching.htm 

541  The analysis for AT, BE, BG, DE, DK, ES, FI, FR, IT, LT, LU, LV, NL, PL, PT, UK is derived from the study; 

Quantification of the economic impacts of EU action to improve fee transparency, comparability and mobility in the 
Internal Market for personal current accounts", ICF GHK, 2012; for the other MS the category of impact was assessed 
by Commission staff. 

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departments  on  familiarisation  with  new  legislative  text  (where  appropriate).  The  industry 
would  incur  recurring  costs  of  staff  spending  time  in  implementing  switching  (additional 
customer enquiries) and compliance monitoring and. If calculated for a 10-year period, these 
would total EUR 229–396 million.  
The  cost  to  Member  States  would  be  limited  and  only  incurred  if  binding  measures  were 
introduced. In Table 4.D costs are quantified on the basis that the legal instrument used is a 
Directive. If the binding instrument were a Regulation, the costs to the Member States would 
be  lower  (as  they  would  not  incur  the  costs  for  transposing  the  Principles  in  national 
legislation), but the cost to EU-budget might increase accordingly.  
The  benefits  to  consumers,  payment  account  providers  and  wider  society  would  arise  from 
facilitation of market access and an increase in cross-border activity due to economies of scale 
and scope. These would lower cross-border operating costs and increase consumer confidence 
and mobility, contributing to a more competitive environment, likely to influence price levels 
and product offers. For this option, these benefits are lower than they could be (and in cross-
border terms are expected to be minimal) as only domestic switching is facilitated. Consumers 
who  switch  are  estimated  to  save  more  than  EUR 1 462 million.  If  a  non-binding  approach 
were chosen, this would probably be significantly lower. 
Additional  potential  benefits  arising  to  consumers,  payment  account  provider  and  wider 
society resulting from a more competitive environment reached through greater customer and 
provider mobility have not been quantified. 
A  detailed  description  of  the  methodology  used  to  calculate  potential  costs  and  benefits, 
including related assumptions, are presented in Annex VI. 

3.4. 

Option 3: Add provisions to improve the effectiveness of the Common Principles 

Variant A: Improve the existing Common Principles at domestic level 

• 

Effectiveness of policy option 

By  introducing  obligatory  displays  on  banks  websites  and  ensuring  that  staff  are  properly 
trained on switching procedures, this variant would ensure that consumers are made aware of 
switching  services,  provided  with  all  relevant  information,  and  receive  adequate  assistance. 
This would reduce indirect costs to consumers in terms of time and effort.  
The  objective  of  reducing  the  risk  of  lost/missed/inaccurate  transactions  resulting  from 
switching of payment accounts to less than 5% of transferred transactions would not be fully 
met.  Third  parties  would  need  to  be  informed  of  changes  in  payment  account  details 
'manually',  meaning  that  most  of  the  direct  costs  to  customers,  such  as  postage  or  penalties 
from  missed/late  payments,  would  not  be  significantly  reduced.  Furthermore,  as  this  option 
does  not  introduce  any  provisions  on  cross-border  switching,  its  implementation  would  not, 
enable the consumers to maximise the benefits from the Single European Payment Area.  

• 

Impacts of policy option on stakeholders and efficiency 

Consumers  would  be  more  aware  of  the  switching  service  and  informed  about  what  it 
comprised.  The  process  would  be  easier  and  less  time-consuming  as  consumers  would  be 
assisted  by  sufficiently  knowledgeable  staff.  Although  customer  mobility  would  be  less 
restricted,  consumers  may  still  face  difficulties  transferring  recurrent  payment  and  be 
discouraged from changing provider. Consumers wishing to switch cross-border would not be 
helped:  cross-border  provisions  are  not  included,  narrowing  product  choice  granted,  in 
principle, by the Single European Payment Area. 
In their responses to the 2012 Commission consultation, consumer representatives noted that 
"the consumer experience in relation to bank account switching depends on the level of staff 

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202 

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preparedness and training of a particular bank branch, whilst all banks must comply equally 
with  the  same  guidelines.  Accordingly,  better  information  and  better  training  of  bank  staff 
would benefit banks and reduce the random variable which impacts on consumer experiences 
of switching and, more generally, the relationship between banks and their customers."542 
Providers, Member States and wider society would incur the same one-off and recurring costs 
and benefits as found in Option 2 above.   
The  effectiveness,  impacts,  costs  and  benefits  would  depend  on  the  policy  instrument  via 
which this option is implemented. If a self-regulatory approach were chosen, all effects and 
impacts  would  likely  be  significantly  lower  –  the  lack  of  enforcement  mechanisms  would 
create  a  risk  that  the  measures  would  not  be  implemented  or  applied  properly.  Even  if  a  
binding instrument were chosen, the implementation of Option 3A could be flexible enough 
to take into account national specificities and thus ensure nationally effective switching. Staff 
training provisions could specify that staff are to be adequately trained on the functioning of 
the switching service, leaving Member States to decide how this is to be applied.  
Geographically,  all  Member  States  would  be  affected  by  this  option.  The  cost  and  broader 
impact would depend on the current application of the Common Principles and the way how 
the  additional  provisions  relating  to  staff  training  and  provision  on  information  were 
implemented. Consequently, other things being equal, Member States with a higher number of 
credit institutions would be affected to a greater extent than those with fewer. On this basis, 
the Member States impacted upon to a medium extent would be: Bulgaria, Cyprus, Germany, 
Hungary,  Luxemburg,  Latvia,  Poland,  Portugal  and  the  United  Kingdom.543  The  remaining 
Member States would be affected to a smaller extent. 

• 

Quantification of costs and benefits 

A summary of quantified costs and benefits is provided in Table 4.E below. 

Table 4.E: Costs and benefits – Improve the existing Common Principles at domestic level 

Total EU benefits (million EUR) 

Consumer benefits: 
Changes in switching behaviour 

Total consumer benefits: 

Total EU costs (million EUR) 

Credit institution costs: 
 One-off:  

 Recurring: 

Total credit institution costs: 

Member State costs: 

One-off:  

 Recurring: 

Total Member State costs: 

Min 

37.3 

852.6 

889.9 

1 679.5  

1 679.5  

Max 

73.1  

1 214.1  

1 287.2  

3.2 

18.8 

22.0 

In practice, the incremental costs for industry from the implementation of this option should 
only  be  slightly  higher  than  those  cited  under  Option  2.  However,  given  that  the  Common 
Principles  do  not  have  an  explicit  obligation  for  e.g.  staff  training,  these  additional  costs 
(many  of  which  should  have  already  been  incurred  by  providers  applying  the  Common 
Principles) are far more than double that in the above table. 

542  BEUC response to the 2012 Public consultation on bank accounts (see footnote 11), p. 19. 
543  Data for AT, BE, BG, DE, DK, ES, FI, FR, IT, LT, LU, LV, NL, PL, PT, UK is derived from the study; Quantification 
of the economic impacts of EU action to improve fee transparency, comparability and mobility in the Internal Market 
for personal current accounts", ICF GHK, 2012; for the other MS the category of impact was assessed by Commission 
staff. 

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Costs  to  Member  States  would  remain  unchanged  compared  to  Option  2:  up  to 
EUR 22 million for all costs for a period of 10 years. 
The benefits in forms of money saved by consumers who switch will be EUR 1 680 million – 
higher than Option 2. 
Additional benefits arising for consumers, payment account providers and wider society due 
to a more competitive environment have not been quantified, but are likely to be higher than 
for Option 2.  
A  detailed  description  of  the  methodology  used  to  calculate  potential  costs  and  benefits, 
including related assumptions, is presented in Annex VI. 
Variant B: Broaden the scope of the improved Common Principles to cross-border switching 

• 

Effectiveness of policy option 

This option is based on Option 3A, so meets the same objectives.  
By  introducing  additional  provision  on  cross-border  switching  and  harmonising  certain 
provisions of the Common Principles, such as the time-periods set for the 'new' and the 'old' 
bank  to  perform  their  respective  tasks,  implementation  of  this  option  would  additionally 
create a consistent regulatory framework across the EU. 
This  option  would  to  a  large  extent  meet  the  defined  operational  objectives.  Moreover,  it 
could be considered as a first step ahead of possible further measures at a later stage, such as 
an EU-wide redirection service.  

• 

Impacts of policy option on stakeholders and efficiency 

Generally, stakeholders would encounter similar costs and benefits as with Variant A of this 
option.  The  difference  would  be  that  a  consumer  wishing  to  switch  provider  cross-border 
would  be  helped,  since  this  option  foresees  relevant  cross-border  provisions.  As  a  result, 
consumer  mobility  would  be  facilitated  domestically  and  at  EU  level.  Consumers  would 
benefit  from  greater  product  choice  due  to  the  implementation  of  the  Single  European 
Payments Area and from lower account fees resulting from increased competitive pressure.  
Payment account providers that have adopted processes incompatible with harmonised cross-
border  provisions  (e.g.  adopting  stricter  provisions  as  to  the  number  of  days  for  performing 
the  tasks  by  the  two  banks)  would  face  additional  costs  for  adapting  them.  However, 
providers  wishing  to  expand  their  client  base  and/or  enter  new  markets  would  significantly 
benefit from increased EU-wide customer mobility providing for a more level-playing field. 
If followed, the more competitive environment this variant would achieve (in comparison to 
Variant  A)  would  also  bring  larger  benefits  to  wider  society,  most  likely  in  form  of  better 
quality products and overall lower account prices. 
Member States might encounter additional costs, as closer cooperation of supervisory bodies 
of  different  Member  States  would  be  necessary  for  cross-border  switching.  Further  costs  to 
Member States also exist in the form of one-off costs relating to potential introduction of legal 
measures (if a Directive were chosen) and the organisation of awareness raising campaigns on 
the  enhanced  cross-border  switching  procedures  (EUR 3 million)  and  recurrent  costs  related 
to monitoring and enforcement measures and potentially reporting to the EU (EUR 2 million a 
year). 
As  with  Variant  A,  the  overall  impacts  on  stakeholders  are  likely  to  depend  largely  on  the 
response of Member States and/or providers depending on the policy instrument chosen. Due 
to additional complexity given through the cross-border implications of this option, however, 
it is likely that the impacts of self-regulatory measures would be overall significantly lower 
than  if  legally  binding  measures  are  chosen.  Even  if  in  principle  a  consistent  EU-wide 

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framework  could  be  implemented  within  a  self-regulatory  initiative,  experience  has  shown 
that  the  Common  Principles  were  insufficient,  leaving  doubt  about  whether  they  could  be 
successful  if  implemented  with  an  extended  scope.  Due  to  their  generally  principle-based 
wording, even a binding instrument could potentially leave a quite high flexibility to Member 
States in course of implementation. Member States could decide whether they wish to define 
the  extent  of  staff  training,  the  layout  of  information  on  the  switching  service,  the  exact 
content of the information that needs to be submitted from the 'old' bank to the 'new' one, and 
its  format.  A  more  standardised  approach  across  the  Member  State  would  nevertheless  be 
necessary  for  certain  provisions  (such  as  maximum  length  of  the  switching  procedure)  to 
ensure the functioning of the cross-border switching service. 
As this option is introducing provisions facilitating cross-border switching service which was 
not  existent  in  any  of  the  Member  States,  diverse  stakeholders  within  all  Member  States 
would be impacted by it. However, the extent of the impact across the Member States would 
depend  on  those  same  factors  as  outlined  in  Variant  A  above.  On  this  basis,  it  has  been 
assessed544  that  the  Member  States  affected  to  the  largest  extent  would  be:  Bulgaria, 
Germany,  Finland,  Luxemburg,  Poland,  Portugal,  and  the  United  Kingdom.  Denmark, 
Estonia, Malta and the Netherlands would be affected to a smaller extent, while the remaining 
Member States would be affected to a medium extent. 

• 

Quantification of costs and benefits  

A summary of quantified costs and benefits is provided in Table 4.F below. 

Table 4.F: Costs and benefits – Broadening the scope of the improved  
Common Principles to cross-border switching 

Total EU benefits (million EUR) 

Consumer benefits: 

Changes in switching behaviour 

Total consumer benefits: 

Total EU costs (million EUR) 

Credit institution costs: 
 One-off:  

 Recurring: 

Total credit institution costs: 

Member State costs: 
One-off:  

 Recurring: 

Total Member State costs: 

Min 

67.2 

2 041.3 

2 108.5 

3 655.4  

3 655.4  

Max 

129.4  

2 649.2  

2 778.6  

3.2 

18.8 

22.0 

The costs incurred from implementing this option to the industry would be between EUR 2 
109-2779 million. These costs include the same categories of one-off costs and recurring costs 
as Variant A. The main difference in cost arises from a higher weighting factor due to higher 
necessary  adaptation  level  by  the  payment  account  providers  arising  from  additional 
requirements of this option. 
Costs to Member States would remain unchanged to Options 2 and 3A and would, calculated 
over a 10-year period, amount to EUR 22 million. 
The money saved by consumers who switch would be higher than for Options 2 and 3A due 
to easier domestic and cross-border mobility. They would amount to EUR 3655 million. 

544 

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Additional  benefits  for  consumers,  payment  account  providers  and  wider  society  resulting 
from  a  more  competitive  environment  have  not  been  quantified,  but  are  likely  to  be  higher 
than  for  Option  3A.  The  above  costs  and  benefits  are  estimated  on  the  basis  of 
implementation  within  a  Directive.  If  the  choice  of  the  instrument  were  a  self-regulatory 
approach, the cost to Member States would probably be lower. However, the benefits to the 
consumers are likely to be considerably lower as there would be no enforcement mechanism 
and no guarantee of timely implementation.  
The methodology used is presented in Annex VI. 

3.5. 

Option 4: Set up an automatic redirection service for all receipts and payments 
from an old to a new account  

Variant A: Introduce automatic domestic redirection service  

• 

Effectiveness of policy option 

Introducing  a  domestic  automatic  redirection  service  would  be  an  effective  measure  to 
address the operational objectives at domestic level. Switching would become easier and less 
time-consuming  for  the  customer.  The  risk  of  errors  in  transactions  would  be  significantly 
reduced  –  even  virtually  eliminated  –  as  all  payments  paid  to/or  debited  from  the  'old' 
payment account would be automatically redirected/rerouted to the 'new' payment account. A 
period for the redirection service of 13 months would guarantee this for infrequent payments 
too  (e.g.  annual  recurrent  payments).  Direct  costs  (e.g.  postage  costs)  and  indirect  costs  in 
terms of consumer time would be significantly reduced: for most types of transactions, third 
parties  would  be  automatically  informed  of  the  customer's  new  banking  details  via  the 
'payment  infrastructure'.  Only  in  a  few  exceptional  cases,  e.g.  cash  in-payments,  would  the 
consumer need to take action to inform other party – if known – of his/her new bank details. 
This option does not propose explicit provisions on raising consumer awareness of switching 
services, nor does it introduce requirements for staff training on the switching process, and so 
it would not ensure adequate assistance is provided to consumers. To ensure this, it could be 
combined with Option 3A. 
As this option would introduce a national redirection service, it would most likely lead to 27 
different  systems  in  place  across  the  EU,  and  would  not  contribute  to  the  creation  of  a 
consistent  EU  framework.  Moreover,  it  might  be  counterproductive  to  possible  subsequent 
efforts  to  obtain  potential  cost  efficiencies  through  the  establishment  of  an  EU-wide 
redirection  service.  Significant  resources  deployed  by  Member  States  and  the  financial 
industry  to  implement  the  domestic  redirection  system  would  create  an  infrastructure  that 
would  not  necessarily  be  compatible  with  a  later  EU-wide  redirection  system.  It  would 
therefore increase the domestic mobility of customers but potentially create further obstacles 
to  cross-border  switching.  The  cross-border  mobility  of  financial  providers  would  be 
improved by increased domestic customer mobility, but the positive impact would be lower 
than  in  the  case  of  introduction  of  an  EU-wide  redirection  service,  since  many  of  the 
economies  of  scale  would  not  be  obtainable.  Payment  account  providers  operating  cross-
border  would  face  significant  investment  in  order  to  integrate  themselves  into  two  or  more 
domestic redirection services. For this reason, this option does not create a level playing field 
between market actors. 

• 

Impacts of policy option on stakeholders and efficiency 

If  a  domestic  redirection  service  were  introduced,  consumers  would  benefit  from  a 
significantly  improved  domestic  switching  process.  As  the  process  would  be  automated, 
consumer involvement would be reduced to a minimum. Consumers would not need to take 

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action  to  inform  third  parties  of  changes  to  their  payment  account  details  (with  a  few 
exceptions) as they would be automatically informed via the system. Knowing that payments 
will not get lost or be delayed would improve consumer confidence in the switching process. 
Increased confidence would make consumers more likely to switch where a better offer exists. 
Generally, the direct cost in terms of postage and penalties for late/missed payments would be 
minimised by this option. Yet as the introduction of the redirection service would be costly to 
the industry, it is likely that these costs would be passed on to the consumers. As redirection is 
to  be  offered  free  of  charge,  the  costs  would  be  passed  on  to  the  consumers  in  other  ways, 
meaning  that  all  consumers,  including  those  uninterested  in  switching,  would  need  to  pay. 
However,  all  consumers  would  benefit  from  a  more  competitive  environment,  but  as  this 
option only proposes a domestic redirection service, it would not help consumers wishing to 
switch cross-border.  
For  the  industry,  the  introduction  of  a  redirection  service  would  impose  significant  initial 
costs.  First,  they  would  need  to  acquire  familiarity  with  any  new  requirements,  possibly 
requiring  external  legal  and/or  technical  expertise.  They  would  also  face  significant  one-off 
costs  for  the  internal  development  of  a  system  to  be  aligned  to  an  industry-wide  switching 
service,  which  would  include  costs  for  adapting  their  IT-systems,  business  processes, 
monitoring  systems  and  product  pricings.  Further  one-off  costs  would  relate  to  training  of 
staff  dealing  with  customer  enquiries  and  adaptation  of  material  for  consumers  on  the 
switching  service.  Despite  these  high  costs,  some  industry  stakeholders  have  indicated  that 
such automatic rerouting of payments represents best practice.545 
In  addition  to  the  costs  of  adaptation  of  providers'  internal  payment  systems,  a  redirection 
service  would  necessitate  the  development  of  a  central  infrastructure  via  which  payments 
could  be  redirected.  The  costs  for  central  development  would  consist  of:  designing  and 
implementing a new messaging system to inform third parties that their payments have been 
redirected and communicate the new bank details to them; implementing changes to payment 
schemes  to  support  redirection  and  forwarding  of  payments  from  the  old  account;  and 
undertaking industry testing. Implementation and management of the new service would also 
be  costly;  these  costs  would  most  probably  need  to  be  in  first  instance  borne  by  Member 
States (central authority) and could, upon functioning, be recovered from the banking industry 
as a 'per switch charge' over the initial period of the service's operation.  
There would also be smaller recurrent costs for the industry and Member States. The industry 
would need to bear the costs for running the redirection service, for compensating customers 
in  case  of  system  errors,  and  for  handling  a  potentially  increased  number  of  customer 
enquiries (as customer mobility would increase). Member States would incur recurrent costs 
for compliance monitoring and costs related to enforcement and to reporting to the EU. One-
off costs to Member States would arise in case legislative measures should be adopted. 
Introduction  of  redirection  service  would  also  incur  costs  for  direct  debit  originators  and 
merchants accepting recurring card transactions. These would need to adapt their IT systems 
and business processes. 
So far, the Netherlands is the only Member State that has introduced a redirection service. The 
so-called  'Interbank  Switch-Support  Service'  ('Overstapservice')  has  been  available  since 
February 2004 and includes the following features546: 

• 

for  13  months  all  direct  debits  destined  for  the  old  account  are,  without  delay, 
automatically re-routed to the new account through the Interpay clearing house. The 

545  2012 Public consultation on bank accounts (see footnote 11), p.12. 
546  Background paper on the Dutch Interbank Switch Support Service (Overstapservice), NVB, May 2006, p.1, 

http://www.nvb.nl/publicaties/switchsupportmay20061.pdf  

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• 

• 

corporate customer that has initiated the direct debit is automatically informed of the 
new account number and is requested to update his database; 

for 13 months all credit transfers destined for the old account are, without delay, re-
routed  to  the  new  account  (also  through  the  Interpay  clearing  house).  The  account 
holder  must  inform  his  debtors  of  the  new  account  number,  for  which  the  ISSS 
brochure provides him with standard cards; 

the  old  bank  cancels  standing  orders  on  the  old  account  and  provides  the  customer 
with  a  detailed  specification.  The  customer  must  give  this  list  to  the  new  bank, 
requesting that it activates some or all of the standing orders on the new account. 

Accordingly,  if  this  option  were  retained,  Dutch  stakeholders  would  not  incur  any 
costs/benefits. 
The United Kingdom is also in the process of developing a redirection service, which should 
be  operational  by  September  2013.  According  to  the  final  report  of  the  Independent 
Commission on Banking547, preliminary discussions with the Payments Council suggest that 
the  costs  of  introducing  an  effective  redirection  service  could  be  in  the  order  of 
GBP 650 million  to  GBP 850 million.  These  are  predominantly  one-off  costs  –  the  ongoing 
maintenance  costs  would  be  very  low,  and  may  be  offset  by  savings  from  fewer  manual 
processes.  These  estimates  include  costs  to  all  those  potentially  affected  by  the  change, 
including  central  payments  schemes,  banks  that  are  members  of  these  schemes,  banks  that 
access these schemes through agency arrangements, and service users of payments systems, 
such as direct debit originators and merchants that take automated debit card payments. The 
ICB states that "there is significant uncertainty around these costs, which are still subject to 
testing  with  banks  and  service  users.  In  some  cases,  the  direct  costs  of  introducing  the 
redirection service may be one element of wider investments in infrastructure, in which case it 
will be difficult to attribute costs specifically to the new service. The costs to small business 
direct debit originators are expected to be unchanged from the current system. The costs to 
small banks and banks that access payments systems through agency arrangements are still 
highly uncertain." 548 
"The Commission’s conclusion is that there are significant net benefits of such a service. This 
service  may  also  have  a  financial  stability  benefit,  as  it  will  facilitate  orderly  resolution  of 
failed  current  account  providers  by  enabling  the  accounts  to  be  switched  to  another  bank 
easily and reliably." 549 
Based on the information on the set-up and functioning of the Dutch and UK systems, they do 
not appear to be compatible should they be merged into a single system. This suggests that if 
this  option  were  adopted,  it  might  be  counterproductive  if  an  EU-wide  redirection  service 
might  become  desirable  at  a  later  stage,  since  this  would  probably  require  significant 
resources and effort. 
Moreover, the technical implementation of a redirection service, may require a single clearing 
house domestically (such as the Bankers' Automated Clearing Services – now known as Bacs 
Payment Schemes Limited – in the UK) or the interlinking of clearing houses where there are 
several of them. In some Member States with multiple clearing houses, adaptation of payment 
systems  would  be  more  technically  difficult  and  therefore  more  costly.  Additionally,  third 
parties to credit mandated direct debits (which are the standard for SEPA direct debits) might 

547 

548 
549 

ICB Final report recommendations, ICB, September 2011, p. 220, 
http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf  
Ibid., p. 221. 
Ibid.  

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208 

   EN 

 
                                                 
not  be  known  to  banks.  As  a  consequence,  their  direct  debits  could  not  be  automatically 
transferred to the new payment account. Nevertheless, it should be possible to redirect these 
payments  once  they  are  sent  to  the  old  account,  and  then  inform  the  third  party  of  the 
customer's changed account details. 
Domestic  redirection  services  could  be  implemented  via  self-regulation  or  legally  binding 
measures.  As  implementation  of  this  option  requires  substantial  technical  input  from  the 
industry, implementation by banking communities has advantages. However, due to the high 
initial  one-off  costs  to  the  industry,  the  extent  that  to  which  the  industry  would  wish  to 
implement  the  redirection  service  on  a  voluntary  basis  is  questionable.  A  legal  obligation 
might therefore represent a more effective (and comparably efficient) way forward. 
This option would have a large impact on all Member States except for the Netherlands and 
the UK. 

• 

Quantification of costs and benefits 

A summary of quantified costs and benefits is provided in Table 4.G below. 

Table 4.G: Costs and benefits – Introduce domestic automatic redirection service 

Total EU benefits (million EUR) 

Consumer benefits: 

Changes in switching behaviour 

Reduction direct/indirect costs 

Total consumer benefits: 

Total EU costs (million EUR) 

Credit institution costs: 
 One-off:  

 Recurring: 

5 848.7  

1 284.2  

7 132.9  

Max 

Min 

500.0 

22 734 

not quantified 

not quantified 

Total credit institution costs: 

500.0 

22 734 

Member State costs: 
One-off:  

 Recurring: 

Total Member State costs: 

3.2 

18.8 

22.0 

Based  on  the  costs  of  the  re-routing  system  introduced  in  2004  in  the  Netherlands 
(EUR 18 million)  and  the  cost  estimate  for  the  UK  redirection  system  (between  GBP 650-
850 million),  it  is  estimated  that  the  overall  cost  to  the  industry  of  introducing  similar 
redirection systems in all 27 Member States would be between EUR 500 – 22 000 million. 
As with some other options, the cumulative 10-year costs to the Member States are estimated 
at around EUR 22 million. However, as this option would likely be introduced in combination 
with either Option 2 or Option 3A, this cost would arise only once.  
The  benefits  to  consumers  are  estimated  at  EUR 7 133 million.  Additional  benefits  for 
consumers, payment account providers and wider society resulting from a more competitive 
environment have not been quantified, but are likely to be higher than for Options 2 and 3A. 
The costs of this option would not differ much according to the policy instrument chosen, and 
with  a  self-regulatory  initiative  there  would  be  only  marginal  costs  for  Member  States.  The 
benefits of a self-regulatory approach would depend on its effectiveness, but are expected to 
be lower than for a legally binding approach. 
Overall, however, the benefits would potentially be lower that the costs, making this option 
inefficient, and therefore disproportionate to the defined objectives. 
The methodology used is presented in Annex VI. 
Variant B: Introduce an automatic EU-wide automatic redirection service  

• 

Effectiveness of policy option 

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An EU-wide automatic redirection service would fulfil all the objectives that Variant A above 
does.  It  would  also  create  a  consistent  framework  across  the  EU,  reducing  barriers  to 
customer cross-border mobility. More mobile customers would represent more opportunities 
for competitive providers of retail financial services. Providers would be able to use similar 
systems  in  different  Member  States,  facilitating  and  reducing  the  costs  of  cross-border 
expansion. 

• 

Impacts of policy option on stakeholders and efficiency 

Impacts on stakeholders would be similar to those described in Variant A. This option would 
also  help  consumers  wishing  to  switch  cross-border,  therefore  potentially  bringing  wider 
benefits to customers and industry. However, due to divergent national payment systems and 
use of different currencies, this option would be technically more challenging than Variant A. 
All Member States, even those that already have a redirection system (the Netherlands, as of 
2013 the United  Kingdom),  would  be  affected significantly by this  option. The Netherlands 
and the United Kingdom would need to amend their systems to make it compatible with the 
EU system. 
As with Variant A, the policy instrument chosen would not change the cost of implanting the 
policy  much.  A  self-regulatory  initiative  would  only  impose  marginal  costs  upon  Member 
States. The benefits of a self-regulatory approach, which would be more challenging for this 
variant, as cross-border provisions would need to be agreed upon and applied, would depend 
on its effectiveness. Benefits are likely to be higher under a legally binding approach. 

• 

Quantification of costs and benefits 

A summary of quantified costs and benefits is provided in table 4.H below. 

Table 4.H: Costs and benefits – Introduce EU-wide automatic redirection service 

Total EU benefits (million EUR) 

Consumer benefits: 

Changes in switching behaviour 

Reduction direct/indirect costs 

Total consumer benefits: 

Total EU costs (million EUR) 

Credit institution costs: 
 One-off:  

 Recurring: 

6 579.7  

1 426.9  

8 006.6  

Max 

Min 

500.0 

22 734 

not quantified 

not quantified 

Total credit institution costs: 

500.0 

22 734 

Member State costs: 
One-off:  

 Recurring: 

Total Member State costs: 

3.2 

18.8 

22.0 

Due to divergent national payment systems and use of different currencies, this option would 
be  technically  challenging  and  therefore  costly  to  the  industry.  However,  additional 
economies  of  scale  would  arise,  benefiting  providers  operating  in  more  than  one  Member 
State. As it is difficult to estimate these costs, we use the same broad estimate as with Option 
4A. 
As with some other options, the cumulative 10-year costs to Member States are estimated at 
EUR 22 million (or less with a Regulation). Since this option would likely be introduced in 
combination with Option 3B, this cost would arise only once. 

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Benefits are likely to be high. Consumers will save an estimated EUR 1 427 million550 from 
the  simpler  switching  process  and  EUR  8  000  million  in  reduced  bank  fees  following  a 
provider  switch.551  Additional  potential  benefits  to  stakeholders  arising  from  a  more 
competitive environment are likely to be higher than for Option 4A. 
Overall,  however,  benefits  would  potentially  be  lower  than  costs,  making  this  option 
inefficient and possibly disproportionate to the defined objectives. 
The methodology used is presented in Annex VI. 

3.6. 

Option 5: Introduce payment account portability 

Variant A: Domestic payment account portability 

• 

Effectiveness of policy option 

Introduction of national account number portability would be an effective measure to address 
the operational objectives defined at domestic level. As the account number would stay with 
the  customer  who  moves  from  one  provider  to another  within  the  Member  State,  the  whole 
process of switching would become a lot less complex and time-consuming for the consumer. 
There would be no need to inform third parties about new bank details: nothing would change 
for the customer apart from the provider's name and address. Consequently, the direct costs of 
switching for consumers would be significantly lowered; some costs, such as postage, would 
be eliminated. No transactions directed to or from the payment account would get lost during 
the process, since the account number would be the unique identifier and the payments would 
be executed automatically to the provider with whom the account is active at the very moment 
of the financial transaction; therefore, no payments would be missed or charged twice/double. 
Customers would need to be informed about 'account number portability', but as the switching 
process would be  significantly simplified, there would be significantly less  (or no) need for 
particular assistance by bank staff during the process.  
This option would introduce payment account portability at domestic level and would lead to 
a  multiplicity  of  systems  in  place  within  the  EU;  therefore,  it  would  not  help  achieve  a 
consistent  framework  across  the  EU.  Moreover,  it  might  undermine  subsequent  efforts  to 
introduce  EU-wide  portability.  Significant  resources  deployed  by  Members  States  and  the 
finance  industry  to  implement  domestic  payment  account  number  portability  would  create 
infrastructure possibly incompatible with a subsequent EU-wide portability system.  
As this option is domestically-focused, it does not facilitate customer cross-border mobility. 
While  financial  providers  may  find  it  easier  to  move  cross-border  as  a  consequence  of  this 
option,  but  less  so  than  with  EU-wide  account  number  portability,  and  so  does  not  create  a 
fully-level playing field between market actors. 

• 

Impacts of policy option on stakeholders and efficiency 

Payment  account  number  portability  could  be  achieved  in  two  ways.  The  first  is  that  all 
numbering  systems  for  all  payment  accounts  would  need  to  be  unified,  meaning  that  all 
accounts would need to be re-numbered in a standard way. This would be the most effective, 
though also the most costly way forward, as for historical reasons the numbering standards in 
different Members States – and sometimes even within Member States – diverge significantly. 
In  recent  years,  significant  efforts  were  made  to  standardise  the  payment  information 

550  Calculated as for variant A; assumption: benefits increase by 10%. 
551  Quantification of the economic impacts of EU action to improve fee transparency, comparability and mobility in the 

Internal Market for personal current accounts, ICF GHK, 2012. 

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necessary for banks to execute payments. IBAN552 and BIC553 codes were introduced for this 
purpose  and  following  SEPA554  migration  these  codes  will  be  the  standards  required  for 
SEPA credit transfers and direct debits both at cross-border and national level. However, the 
IBAN contains a referral to the Member State and provider (and even the branch of a bank in 
some cases) allowing identification of the payment account. For these reasons, according to 
banking industry experts, the introduction of portable payment account numbers would mean 
that the current IBAN and BIC standards would have to be replaced.555 As already stated in 
the  Impact  Assessment  of  the  Payment  Services  Directive,  "… studies  carried  out  in  some 
Member States (Netherlands, UK) regarding this question of portability have shown that the 
recently  introduced  EU-wide  IBAN-BIC  numbering  system  is  not  compatible  with  the 
portability  of  account  numbers  without  incurring  in  disproportionate  costs  and  provoking 
problems for efficient straight through processing." Furthermore, it needs to be noted that the 
IBAN  code,  even  though  originally  adopted  by  the  European  Committee  for  Banking 
Standards,  was  later  adopted  as  an  international  standard  and  is  currently  used  in  numerous 
countries outside the EU.  
Portability  could  also  be  introduced  by  creating  a  central  'database'  that  automatically 
'translated'  each  existing  account  number  in  a  new  virtual  account  number.  The  customer 
would need to communicate this 'virtual' number once to all third parties who could change 
their records. If the consumer wishes to switch between providers (or between accounts with a 
single  provider),  the  new  account  number  would  replace  the  old  account  number  in  the 
database,  and  so  the  new  account  number  would  be  assigned  to  the  'virtual'  number.  The 
consumer would not need to communicate the new payment account details.  
This way of achieving account number portability could potentially be compatible with IBAN 
coding. Nevertheless, for this method, potential operational risks would need to be taken into 
account  when  designing/developing  the  system.  As  customers  and  public  authorities  make 
heavy demands on payment systems, technical problems could not only entail direct economic 
damage, but also pose a challenge to financial stability and increase the risk of fraud or the 
accidental disclosure of personal data. Additionally, it would be necessary to enable tracking 
of the active provider for each account number for tax purposes.  
If  domestic  account  portability  could  be  successfully  and  cost-efficiently  implemented,  it 
would be most beneficial to consumers wishing to switch domestically. It would eliminate the 
risk of missed/delayed payments, financially benefiting consumers (reduction of costs related 
to  missed  payments  such  as  late  payment  fees,  unexpected  overdrafts  costs  or  longer-term 
effects  such  as  possible  black  marks  on  their  credit  history).  Consumers  would  find  the 
process  understandable  and  straightforward,  decreasing  the  time  and  effort  involved  in 
switching. As they would not need to inform third parties of changes in their payment account 
details, consumers would benefit from a real reduction of direct costs of switching in terms of 
postage  costs.  An  easy  and  error-free  switching  process  would  substantially  improve 
consumer satisfaction and confidence.  
Consumers  would  also  benefit  from  increased  domestic  customer  mobility,  which  would 
stimulate competition between providers, leading to more product innovation by the providers 
and  therefore  more  product  choice  and  better  value  for  consumers.  These  effects  would  be 
smaller  than  with  cross-border  portability.  Furthermore,  as  this  option  would  result  in 

International Bank Account Number 

552 
553  Bank Identifier Code 
554  Single European Payments Area 
555  See also: The SEPA IBAN Strategy, June 2006, p. 2. The bank identifier that is embedded in the IBAN is the identifier 
assigned by national clearing systems or other national bodies. Most national clearing codes in the IBAN identify the 
bank at branch level.  

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substantial costs to the financial industry, it is likely that a (significant) part of these costs will 
be passed on to consumers. As set out above, as the switching service is meant to be free of 
charge,  costs  would  be  passed  on  to  all  consumers,  irrespective  of  their  desire  to  switch. 
Furthermore, depending on method of implementation, consumers would bear one-off costs of 
informing third parties of their new portable account number or the 'virtual' account number 
and  updating  the  account  information  in  their  everyday  business  transactions  (including  i.e. 
reprinting of stationery). To direct debit originators and those who make automatic payments 
into customers' accounts the introduction of payment account portability would impose initial 
costs  for  adapting  account  information  in  their  database.  Subsequent  costs  would  be 
significantly  reduced,  as  there  would  be  no/substantially  less  need  for  them  to  change  their 
entries relating to payment account information in the database at a later stage. 
For the financial industry, this option would impose considerable initial costs - primarily one-
off  compliance  costs  related  to  the  implementation  of  account  number  portability  and 
significantly  smaller  recurrent  costs  related  to  its  functioning.  The  compliance  costs  would 
comprise  familiarisation  costs  with  new  legal  and  technical  requirements  of  portability 
(potentially  requiring  external  expertise);  costs  of  adapting  IT  systems  to  make  accounts 
portable across EU; costs of adapting business processes to meet the requirements of account 
portability;  costs  of  initial  customer  communications  and  of  initial  staff  training  on 
portability; and dealing with customer enquiries. One-off administrative costs would arise for 
adapting IT systems and business processes to monitor internal compliance. Recurrent costs 
would be linked to the increased operational costs of handling additional customer enquiries 
and the costs of reporting on compliance activities to a supervisory body. 
Once  account  number  portability  was  operational,  the  financial  services  industry  would 
benefit  from  a  simpler  switching  process.  Even  higher  domestic  customer  mobility  would 
facilitate the market entry and client acquisition of competitive market players. 
Due to its technical nature, this option could be implemented through either a self-regulatory 
initiative  or  a  legally  binding  approach  with  a  number  of  regulatory  technical  standards.  At 
present, no existing domestic laws could prevail over any self-regulatory agreement, leaving 
the door open for a self-regulatory approach. However, due to the high one-off costs of this 
option and the fact that the significantly less costly and burdensome Common Principles were 
not sufficiently applied on a voluntary basis, a legal obligation might be necessary to achieve 
effective results. 
For Member States, costs would depend on the implementing instrument. If a legally binding 
instrument  were  chosen,  this  option  would  potentially  result  in  one-off  costs  for  the 
transposition of the EU legislation into national law (in case of a Directive) and for conceptual 
development  of  the  portability  system  and  related  necessary  changes  to  national  payment 
infrastructure. Potentially information campaigns to raise awareness of the portability service 
among consumers could be envisaged. Recurrent costs would arise for compliance monitoring 
and enforcement costs, and costs for reporting to the EU. Alternatively, if the legal instrument 
chosen were a Regulation, most of these costs would not accrue to Member States, but would 
need to be financed directly from the EU budget. 
Due  to  the  historical  differences  in  account  numbering,  any  new  system  is  likely  to  retain 
some idiosyncrasies.. All Member States would be significantly affected by this option, as no 
Member State has a portability system in place, though Sweden may be affected less due to its 
existing  "Bankgiro"  system  for  corporate  customers.  Consequently,  providers  operating  in 
several  Member  States  would  be  confronted  with  significant  initial  outlays  with  limited 
possibility  to  profit  from  economies  of  scale.  Furthermore,  if  different  account  number 
portability system were introduced across the EU, these would not necessarily be compatible 

EN 

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with a potential EU-wide portability that could be envisaged at a later stage without deploying 
significant additional resources to adapt the systems.  

• 

Quantification of costs and benefits 

A summary of quantified costs and benefits is provided in Table 4.I below. 

Table 4.I: Costs and benefits – Account number portability at national level 

Total EU benefits (million EUR) 

Consumer benefits: 

Changes in switching behaviour 

Reduction direct/indirect costs 

Total consumer benefits: 

Total EU costs (million EUR) 

Credit institution costs: 
 One-off:  

 Recurring: 

Total credit institution costs: 

Member State costs: 
One-off:  

 Recurring: 

Total Member State costs: 

8 773.0  

1 284.2  

10 057.2  

14 700 

not quantified 

14 700 

3.2 

18.8 

22.0 

The quantification of the overall costs of introducing domestic payment account portability is 
difficult.  The  costs  would  arguably  be  similar  to  introducing  EU-wide  portability  (i.e. 
EUR 14 700 million  for  the  European  banking  industry).  On  the  one  hand,  some  of  the 
cumulative  costs  might  be  higher  due  to  fewer  economies  of  scale,  especially  for  small 
Member  States.  Similarly,  overall  costs  to  Member  States  might  be  higher,  as  they  might 
conceptually develop and design their own systems. However, some technical aspects might 
be less costly if portability were introduced only domestically. As these effects are difficult to 
quantify, for simplicity the costs of domestic portability are assumed to be equal to the costs 
of EU-wide portability. 
The overall benefits of this option are potentially lower than from an EU-wide portability: the 
effect  on  consumer  and  provider  mobility  would  be  smaller  and  would  not  fully  level  the 
payment account market playing field. The benefits that were quantified for this option stem 
from two sources. First, there are benefits for consumers resulting from better product choice 
(savings in bank fees following a provider switch) estimated at EUR 8 773 million. Second, 
there  are  reduced  consumer  costs  estimated  at  EUR 1 284 million.  All  stakeholders  could 
benefit from a more competitive environment; these benefits are difficult to quantify. 
In  conclusion,  the  long-term  benefits  of  EU-wide  portability  would  need  to  be  weighed  up 
more  carefully  against  the  technical  issues  behind  modifications  to  payment  infrastructures. 
For now, this option seems disproportionate. 
The methodology used is presented in Annex VI. 
Variant B: EU-wide payment account portability 

• 

Effectiveness of policy option 

As  domestic  payment  account  portability  is  an  implicit  prerequisite  to  EU-wide  account 
number  portability,  this  variant  would  be  an  effective  measure  to  address  all  operational 
objectives  as  described  in  the  analysis  of  Option  5A.  Moreover,  as  this  variant  would 
introduce  pan-European  payment  account  portability,  it  would  automatically  create  a 
consistent  framework  across  the  EU.  At  the  same  time,  it  would  significantly  reduce  the 
barriers  to  customer  cross-border  mobility.  More  mobile  customers  would  represent  greater 

EN 

214 

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opportunity for competitive providers of retail financial services. Together with the fact that 
the  financial  services  providers  would  not  need  to  use  differing  infrastructure  related  to 
payment  account  numbering  in  different  Member  States,  this  would  facilitate  and  increase 
their cross-border mobility. 
Overall,  introduction  of  EU-wide  payment  account  portability  would  be  the  most  effective 
measure  in  view  of  the  operational  objectives.  Increased  customer  mobility  and  financial 
services  mobility  would  lead  to  more  competitiveness in the retail  financial sector, improve 
the level-playing field between market actors and result in larger consumer choice and lower 
prices, which would lead to greater consumer satisfaction and confidence. 

• 

Impacts of policy option on stakeholders and efficiency 

EU level account number portability could be achieved in the two ways described above, with 
similar difficulties. 
An  additional  difficulty  that  would  need  to  be  solved  is  that,  if  payment  account  numbers 
were to be easily transferable between Member States, for tax purposes, a system would need 
to be developed that would allow tracking of the payment account provider and Member State 
where the payment account is active.  
If EU-wide portability could be successfully and cost-efficiently implemented, it would be the 
option benefiting consumers wishing to switch the most. Consumers and providers would be 
affected in a similar manner to that in Variant A above; however, the benefits would likely be 
magnified because of increased cross-border mobility. Consumers would benefit from easier 
improved  product  choice  and  direct  costs  savings.  Payment  account  providers  operating  in 
more  than  one  Member  State  would  benefit  from  potentially  higher  economies  of  scale  and 
lower  compliance  costs.  Generally,  payment  account  providers  would  benefit  from  easier 
market entry/expansion due to higher consumer and provider mobility. 
As introduction of EU-wide portability would necessitate conceptual development it might be 
possible  to  delegate  the  task  to  a  European  body  such  as  the  European  Banking  Authority 
(EBA). 
Within  the  feedback  to  Commission  public  consultation556,  a  majority  of  consumer 
representatives  and  several  Member  States  identified  the  introduction  of  EU-wide  payment 
account portability as the best long-term solution, eliminating obstacles to switching payment 
accounts. The European consumer organisation BEUC encouraged Commission to launch an 
in-depth feasibility study on EU-wide account number portability, in order to better assess its 
cost  and  benefits  and  its  implications,  such  as  compatibility  with  the  IBAN  system.  557 
Overall,  implementation  of  EU-wide  portability  would  have  significant  impacts  on  all 
Member States. 

• 

Quantification of costs and benefits 

A summary of quantified costs and benefits is provided in Table 4.J below. 

Table 4.J: Costs and benefits – EU-wide account number portability 

Total EU benefits (million EUR) 

Consumer benefits: 

Changes in switching behaviour 

Reduction direct/indirect costs 

Total consumer benefits: 

Total EU costs (million EUR) 

9 504.1  

1 426.9  

10 931.0  

556  2012 Public consultation on bank accounts (see footnote 11), p. 16.  
557 

response to the 2012 Public consultation on bank accounts (see footnote 11), p. 16.  

EN 

215 

   EN 

 
 
  
  
                                                 
Credit institution costs: 
 One-off:  

 Recurring: 

Total credit institution costs: 

Member State costs: 
One-off:  

 Recurring: 

Total Member State costs: 

14 700 

not quantified 

14 700 

3.2 

18.8 

22.0 

The cost of introducing payment account portability would be high. The cost across the EU 
for  the  technical  reorganisation  of  account  numbering  systems  alone  would  total  around 
EUR 14  700 million  for  the  European  banking  industry.558  The  EUR 14 700 million  figure 
excludes  further  reorganisation  costs,  particularly  in  relation  to  customers  (adaptation  of 
customer systems, information for business partners and other organisational measures). For 
example,  when  switching  accounts,  banks  will  still  expect  to  reissue  physical  cards  and 
cheque books, as these include bank logos and account number details.  
Assuming  that  the  demand  for  switching  significantly  increased  once  account  number 
portability were operational – and considering that the yearly demand for national switching 
in the EU is currently 7.7%559 – a  prudent estimate of its increase would be around 10%. In a 
conservative  scenario,  the  cost  per  switch  would  be  calculated  by  dividing  the  total  costs 
among 10% of the current account users (i.e. about 35.8 million customers). This would mean 
that cost of introducing account number portability would amount to approximately EUR 413 
per payment account switcher in a given year in the EU. However, as the recurrent costs of 
porting  account  numbers  are  very  low  in  comparison  to  one-off  initial  outlay,  it  may  be 
argued,  that  the  significant  investment  required  for  the  one-off  adaptation  of  the  account 
number  portability  should  be  viewed  as  a  mid-  to  long-term  investment  and  one  should 
consider  the  costs  to  be  amortised  over  several  years.  Considering  a  5-year  horizon  and 
assuming 10% switching rate per annum, the costs per switch would amount to EUR 82.  
As this option also foresees the facilitation of cross-border switching, consumers would make 
direct  cost  savings  of  EUR 1 427 million560 
from  a  more  efficient  process  and 
EUR 9 504 million from lower bank fees following a switch.561 Additional potential benefits 
arising  to  consumers,  payment  account  providers  and  wider  society,  including  a  more 
competitive environment, have not been quantified, but would likely be significantly higher 
than if portability were introduced domestically. 
In conclusion, the long-term benefits of EU-wide portability will need to be weighed up more 
carefully against the technical issues behind modifying payment infrastructures. For the time 
being, however, implementation of this option is disproportionate to the identified problems. 
The methodology used is presented in Annex VI. 

558  Customer Mobility in Relation to Bank Accounts, BearingPoint GmbH, 2007, p. 48. This figure seems to be consistent 
with an estimation quoted by a Dutch bank in the Expert Group, according to which in the Netherlands the number 
portability would cost, only for the banks, EUR 300-500 million as well as with the Dutch Banking Association who 
estimated the number portability to cost EUR 260-510 million. 

559  Consumers' views on switching service providers, Eurobarometer 243, European Commission, January 2009, p.85, 

http://ec.europa.eu/public_opinion/flash/fl_243_en.pdf, 

560  Calculated as for variant A; assumption: benefits increase by 10%. 
561  Based on model of analysis of potential reduction of PCA prices resulting from switching options by the contractor 

(GfK), Quantification of the economic impacts of EU action to improve fee transparency, comparability and mobility in 
the Internal Market for personal current accounts, ICF GHK, 2012. 

EN 

216 

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Term 
Basic payment account 

Consumer 

Churn 
Credit transfer 

Debit card 

Direct Debit 

Gateway product 

Payment account 

Payment card 

Payment service provider 

Payment service user 

Payment transaction 

Pre-paid card 
SEPA 
Standing order 

ANNEX V 
GLOSSARY 

Definition 
A basic payment account includes the ability to deposit and withdraw cash into 
and from the account. It also enables the consumer to make essential payment 
transactions such as receiving income or benefits, paying bills or taxes and 
purchasing goods and services, including via direct debit, credit transfer and the 
use of a payment card. 
Any natural person who requests and makes use of a basic payment account for 
purposes other than his trade, business, craft or profession. 
The share of customers who change providers in a given year. 
A payment service for crediting a payee’s payment account, where a payment 
transaction or a series of payment transactions is initiated by the payer on the 
basis of the consent given to his payment service provider. 
A payment card not allowing payment transactions which exceed the balance of 
the account. 
Direct debit is a payment service that allows a payee (e.g. an electricity 
company or a mobile phone operator) to instruct its bank to collect (to debit) 
varying amounts directly from a customer's account. The transaction is initiated 
by the payee (the company in the example provided) on the basis of the payer's 
(consumer's) consent given to the payee  or to the payer's own service provider. 
A product that a consumer purchases which leads to subsequent product/service 
purchases with the same provider. 
An account held in the name or one or more payment service users, which is 
used for the execution of payment transactions; held by a payment services 
provider. 
any personalised card used for payment orders/transactions, including a debit 
card or pre-paid card; which can be used at points of sale where the card is 
accepted, including for online purchases. 
Any of the categories referred to in Article 1(1) of Directive 2007/64/EC and 
the legal and natural persons referred to in Article 26 of that Directive, but 
excludes those institutions listed in Article 2 of Directive 2006/48/EC of the 
European Parliament and of the Council of 14 June 2006 relating to the taking 
up and pursuit of the business of credit institutions benefiting from a Member 
State waiver exercised under Article 2(3) of Directive 2007/64/EC, to which 
belong: 
– credit institutions/banks; 
– payment institutions, e.g. GSM companies, bill payers, money remittance 
institutions, etc.; 
– electronic money institutions; 
– post office giro institutions; 
– other payment services providers, e.g. public authorities or national central 
banks (in some cases). 
A natural or legal person making use of a payment service in the capacity of 
either payer or payee, or both. 
An act, initiated by the payer or by the payee of transferring funds, irrespective 
of any underlying obligations between the payer and the payee. 
A payment card pre-loaded with funds. 
Single Euro Payments Area 
An instruction initiated by the payer (i.e. a consumer) through an instruction to 
their payment institution to pay a set amount at regular intervals to the payee's 
account. 

EN 

217 

   EN 

 
 
 
 
 
ANNEX VI 
ASSUMPTIONS AND CALCULATION BASES USED IN DETERMINING COSTS AND BENEFITS 

Detailed tables: benefits and costs of access to basic payment accounts 
Option 1: No action 
Option 2: Ensure application of the provisions of the Recommendation 
Since three Member States (Belgium, France and Italy) have already implemented the Recommendation, the calculation of costs and benefits of this 
option for different stakeholders covers 24 Member States. 

Benefit / cost  per 
stakeholder and type 

Benefit / cost description 

Table 6.A: Ensure application of the provisions of the Recommendation 
Euro 
(Millions) 

Calculation basis 

Number of consumers 
that could potentially 
open an account as a 
result of this option 

Benefits to consumers 

Total benefits resulting from 
improved access to a basic 
payment account  

542 - 2711 

320-1600 

222-1111 

Number of consumers impacted would be 2 million (pessimistic scenario), 6.4 million (realistic scenarios) or 10 million (optimistic scenario).  

Source: SEC(2011)906, p. 41 and annexes, p. 51, "While the number of European consumers who desire access to a bank account but are 
deprived of it have been estimated to amount to about 6.4 million, an additional optimistic scenario considers the possibility of a 10 million 
uptake. The additional demand of 3.6 million basic accounts could come from previously disinterested unbanked consumers who notice the 
new product and become interested (especially if it is low-priced). It could also come (albeit to a small extent) from some consumers who 
although not unbanked, will close their existing ordinary account in case they can get a basic account for a lower price." 

Under this policy option, it is assumed that all these consumers would be impacted. No discount is therefore applied to the 3 scenarios. 

Benefits from discounts from reduced use of out-of-bank money transmission services (e.g. reduced use of postal orders): EUR 60

 saved 
annually per consumer on money transmission services multiplied by the number of unbanked consumers who would open an account (2 
million, 6.4 million or 10 million depending on the scenario). 

562

563

Benefits from discounts from reduced use of cheques: EUR 120

 saved annually per consumer by withdrawal from cheques multiplied by 

the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

option. 

Benefits from discounts from electronic payments (e.g. discounts available by paying utility bills by direct debit rather than cash): EUR 125

564

saved per consumer / per year by using the more efficient means of payment multiplied by the number of unbanked consumers who would 
open an account (2 million, 6.4 million or 10 million depending on the scenario). 

The estimated benefit of EUR 125 per consumer per year is considered a prudent estimate.

 Data from the UK suggests that vulnerable 

565

562  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 44. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid. 
Ibid., p. 46.  

563 
564 

EN 

218 

EN 

 
  
 
 
 
 
 
 
 
 
                                                 
consumers in the UK could be paying EUR 880-1 100 a year in higher costs because they are excluded from mainstream financial services. 
566

The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

option. 

0 

Benefits from online purchases: EUR 0. Based on the evidence collected for this impact assessment, it is assumed that being able to access a 

bank account would not necessarily provide access to the appropriate means of payment to enable online purchases.  

Costs to consumers 

Total costs for consumers 

Account operation costs 

108-542 

91 – 453 

Cost of inappropriate use of the 
account  

18 – 89 

Benefit / cost per 
stakeholder and type 
Benefits to payment 
services providers 

Benefit / cost description 

Recurring annual benefits from 
providing access to a basic 
payment account  

Euro 
(Millions) 
18 - 89 

•  Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of 

567

EUR 51

 by the number of consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

•  The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

option. 

•  For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 

estimated at somewhere between EUR 17 and EUR 22 for each failed transaction
It is assumed that 25% of unbanked consumers who would open a bank account (i.e. 25% under the pessimistic, realistic and optimistic 

). 

• 

568

569

 This number is multiplied by the average failed transaction cost of 

scenarios) would make on average 2 failed transactions per year.

EUR 20

570

. 

•  The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

option. 

Calculation basis 

•  Average price of a payment account which consumer has to pay has been calculated at EUR 51
573

572

account provider are equal to EUR 40
. This results in revenue of approximately EUR 10
multiplied by the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the 
scenario). 

 for providers per each account which is 

571

, where the estimated costs incurred by 

•  The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

Ibid., p. 46.  
Ibid., p. 46. From Family Welfare Association (retrieved from http://www.inclusioncentre.org.uk/3.html).  
Ibid., p. 40. The data was collected by CSES associates across the European Union from local banks. 
Ibid., p. 41.  

565 
566 
567 
568 
569  Estimate by Commission services. 
570  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 44. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study, p. 41 
Ibid., p. 40.  
Ibid., p. 54. 
Ibid., p. 54. 

571 
572 
573 

EN 

219 

EN 

 
  
 
 
 
 
                                                                                                                                                                                                                                                    
option. 

Costs to payment 
services providers 

One-off costs of introducing basic 
bank accounts (if not already exist) 

N/A 

•  These costs of will generally be incorporated into the annual fees charged to consumers. Over time, the more basic bank accounts that there 

are, the lower the incremental costs

, thus these are assumed to be marginal. 

574

Recurring annual costs resulting 
from operating a basic payment 
account  

71 – 356 

•  The costs are calculated by multiplying the annual cost of operation of an account (EUR 40

575

) by the number of consumers who would 

open an account (3 scenarios are 2 million, 6.4 million and 10 million). The CSES study also concluded that these costs were highly 
dependent on the design of the product being offered and the more electronic features provided, the cheaper the account. 576

•  The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Euro 
(Millions) 
18 – 89 

Costs to Member States 
(governments) 

Total costs for Member States 

One-off costs of legislating 

3.02 

1.13 

option. 

Calculation basis 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. benefit cheques) are estimated at 

577

578

EUR 7-12 per recipient per annum
number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

, thus an average of EUR 10 per recipient per annum

 has been applied which is multiplied by the 

The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

option. 

•  The cost of legislating is assumed to require about 1 500 man hours

579

 where the EU average employee cost per hour is estimated to be 

around EUR 31.5

580

 which is multiplied by 24 Member States which have not yet implemented the Recommendation. 

•  This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 

assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of the 

costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906. 

581

, it was decided to use the 

574 
575 

Ibid., p. 50.  
Ibid., p. 52. Data is based on national studies, notably from the UK as well as research by external consultants. The study specifically states that in at least one case, stakeholders consider the UK 
data as representative of other countries.  

576  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 52. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. Data is based on national studies, notably from the UK as well as research by external consultants. The study 
specifically states that in at least one case, stakeholders consider the UK data as representative of other countries.  

577  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 54. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 

578  Calculation by Commission services. 
579  SEC(2011)906, annexes, p. 58. 
580  Eurostat 2008, Average Hourly Labour costs, Nace Rev. 1.1. 
581  SEC(2011)906. 

EN 

220 

EN 

 
  
 
 
 
 
 
                                                 
Recurring costs of monitoring 
application of legislation  

1.89 

•  The annual cost of monitoring and enforcing is assumed to require about 2 500

582

 man hours where the EU average employee cost per 

hour is estimated to be around EUR 31.5
Recommendation yet. 

583

 which is multiplied by 24 Member States which have not yet implemented the 

•  This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 

assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of the 

584

, it was decided to use the 

costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906. 

Calculation basis 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 55 (EUR 0.6-EUR 1 for water payments and 

EUR 0.6-EUR 1 for energy payments respectively) per transaction.

 In order to make the necessary overall estimation of benefits to be 

obtained by utility firms in the 24 Member States which have not yet implemented the Recommendation, an average saving of EUR 1.5
per transaction has been assumed. It is assumed that 12 transactions take place a year. This is multiplied by the number of unbanked 
consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

586

The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

option. 

585

Benefit / cost per 
stakeholder and type 
Benefits to utility firms 

Benefit / cost description 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

Euro 
(Millions) 
32 - 160 

Option 3: Modify the provisions of the Recommendation relative to the beneficiaries 
Variant A: Introduce a universal right to a basic payment account 
The calculation of costs and benefits of this option for different stakeholders covers 27 Member States. No discount is therefore applied. 

Benefit / cost  per 
stakeholder and type 

Number of consumers 
that could potentially 
open an account as a 
result of this option 

Table 6.B: Modify the provisions of the Recommendation relative to the beneficiaries- Variant A: Introduce a universal right to a basic payment account 
Benefit / cost description 

Calculation basis 

Euro 
(Millions) 

Number of consumers impacted would be 2 million (pessimistic scenario), 6.4 million (realistic scenarios) or 10 million (optimistic scenario).  

Source: SEC(2011)906, p. 41 and annexes, p. 51, "While the number of European consumers who desire access to a bank account but are 
deprived of it have been estimated to amount to about 6.4 million, an additional optimistic scenario considers the possibility of a 10 million 
uptake. The additional demand of 3.6 million basic accounts could come from previously disinterested unbanked consumers who notice the 
new product and become interested (especially if it is low-priced). It could also come (albeit to a small extent) from some consumers who 

582  SEC(2011)906, annexes, p. 58. 
583  Eurostat 2008, Average Hourly Labour costs , Nace Rev. 1.1. 
584  SEC(2011)906. 
585  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 60. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study; 

586  Calculation by Commission services. 

EN 

221 

EN 

 
  
 
 
 
 
 
 
 
 
 
                                                 
Benefits to consumers 

Total benefits resulting from 
improved access to a basic 
payment account  

610 - 3050 

360-1800 

250-1250 

Costs to consumers 

Total costs for consumers 

122-610 

Account operation costs 

102 – 510 

Cost of inappropriate use of the 
account  

20 – 100 

although not unbanked, will close their existing ordinary account in case they can get a basic account for a lower price."  

Under this policy option, it is assumed that all these consumers would be impacted. No discount is therefore applied to the 3 scenarios. 

• 

• 

• 

Benefits from discounts from reduced use of out-of-bank money transmission services (e.g. reduced use of postal orders): EUR 60
saved annually per consumer on money transmission services multiplied by the number of unbanked consumers who would open an 
account (2 million, 6.4 million or 10 million depending on the scenario). 

587

Benefits from discounts from reduced use of cheques: EUR 120
by the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

 saved annually per consumer by withdrawal from cheques multiplied 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 
• 

Benefits from discounts from electronic payments (e.g. discounts available by paying utility bills by direct debit rather than cash): 

588

EUR 125
consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

 saved per consumer / per year by using the more efficient means of payment multiplied by the number of unbanked 

The estimated benefit of EUR 125 per consumer per year is considered a prudent estimate.
consumers in the UK could be paying EUR 880-1 100 a year in higher costs because they are excluded from mainstream financial 
services. 591

 Data from the UK suggests that vulnerable 

590

0 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 
• 

Benefits from online purchases: EUR 0. Based on the evidence collected for this impact assessment, it is assumed that being able to 
access a bank account would not necessarily provide access to the appropriate means of payment to enable online purchases.  

•  Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of 

EUR 51

 by the number of consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 
• 

For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 

estimated at somewhere between EUR 17 and EUR 22 for each failed transaction
It is assumed that 25% of unbanked consumers who would open a bank account (i.e. 25% under the pessimistic, realistic and optimistic 

). 

• 

593

589

592

587  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 44. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 44.  
Ibid., p. 46.  
Ibid., p. 46.  
Ibid., p. 46. From Family Welfare Association (retrieved from http://www.inclusioncentre.org.uk/3.html). 

588 
589 
590 
591 
592  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 40. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. The data was collected by CSES associates across the European Union from local banks. 
Ibid., p. 41.  

593 

EN 

222 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
                                                 
Benefit / cost per 
stakeholder and type 
Benefits to payment 
services providers 

Benefit / cost description 

Recurring annual benefits from 
providing access to a basic 
payment account. 

Euro 
(Millions) 
20 - 100 

Costs to payment 
services providers 

Recurring annual costs resulting 
from operating a basic payment 
account. 

80 – 400 

One-off costs of introducing basic 
bank accounts (if not already exist) 

N/A 

Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Euro 
(Millions) 
20 – 100 

scenarios) would make on average 2 failed transactions per year.

594

 This number is multiplied by the average failed transaction cost of 

EUR 20

595

. 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 
Calculation basis 

•  Average price of a payment account which consumer has to pay has been calculated at EUR 51
598

597

account provider are equal to EUR 40
. This results in revenue of approximately EUR 10
multiplied by the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the 
scenario). 

 for providers per each account which is 

596

, where the estimated costs incurred by 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 

• 

• 
• 

The costs are calculated by multiplying the annual cost of operation of an account (EUR 40
open an account (3 scenarios are 2 million, 6.4 million and 10 million). The CSES study also concluded that these costs were highly 
dependent on the design of the product being offered and the more electronic features provided, the cheaper the account. 600
All 27 Member States would be impacted by this option, therefore no discount is applied. 
These costs of will generally be incorporated into the annual fees charged to consumers. Over time, the more basic bank accounts that 

) by the number of consumers who would 

there are, the lower the incremental costs

, thus these are assumed to be marginal. 

601

599

Calculation basis 

• 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. benefit cheques) are estimated at 

EUR 7-12 per recipient per annum
, thus an average of EUR 10 per recipient per annum
the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

 has been applied which is multiplied by 

602

603

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 

594  Estimate by Commission services. 
595  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 41. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 40. The data was collected by CSES associates across the European Union from local banks. 

596 
597  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 54. 

598 
599 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 54. 
Ibid., p. 52. Data is based on national studies, notably from the UK as well as research by external consultants. The study specifically states that in at least one case, stakeholders consider the UK 
data as representative of other countries.  

600  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 52. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. Data is based on national studies, notably from the UK as well as research by external consultants. The study 
specifically states that in at least one case, stakeholders consider the UK data as representative of other countries.  

601  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 50. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 

602  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 54. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 

EN 

223 

EN 

 
  
 
 
                                                                                                                                                                                                                                                    
Costs to Member States 
(governments) 

Total costs for Member States 

One-off costs of legislating 

3.4 

1.27 

Recurring costs of monitoring 
application of legislation  

2.12 

• 

• 

• 

• 

Benefit / cost per 
stakeholder and type 
Benefits to utility firms 

Benefit / cost description 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

Euro 
(Millions) 
36 – 180 

The cost of legislating is assumed to require about 1 500 man hours

604

 where the EU average employee cost per hour is estimated to be 

605

around EUR 31.5
This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 
assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of 

 which is multiplied by 27 Member States. 

the costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906. 

The annual cost of monitoring and enforcing is assumed to require about 2 500

607

 man hours where the EU average employee cost per 

606

, it was decided to use the 

hour is estimated to be around EUR 31.5
This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 
assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of 

 which is multiplied by 27 Member States. 

608

609

, it was decided to use the 

the costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906. 

Calculation basis 

• 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 55 (EUR 0.6-EUR 1 for water payments 

and EUR 0.6-EUR 1 for energy payments respectively) per transaction.
to be obtained by utility firms in the 24 Member States which have not yet implemented the Recommendation, an average saving of 

 In order to make the necessary overall estimation of benefits 

EUR 1.5
unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

 per transaction has been assumed. It is assumed that 12 transactions take place a year. This is multiplied by the number of 

611

610

Variant B: Introduce a right to a basic payment account at least for national residents 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 

603  Calculation by Commission services. 
604  SEC(2011)906, annexes, p. 58. 
605  Eurostat 2008, Average Hourly Labour costs, Nace Rev. 1.1. 
606  SEC(2011)906. 
607  SEC(2011)906, annexes, p. 58. 
608  Eurostat 2008, Average Hourly Labour costs , Nace Rev. 1.1. 
609  SEC(2011)906. 
610  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 60. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study; 

611  Calculation by Commission services. 

EN 

224 

EN 

 
  
 
 
 
 
                                                                                                                                                                                                                                                    
Since  three  Member  States  (Belgium,  France  and  Italy)  have  already  implemented  the  Recommendation,  thus  they  provide  for  a  right  to  a  basic 
payment account at least for national residents, the calculation of costs and benefits of this option for different stakeholders covers 24 Member States. 
In addition, for this option the number of unbanked national residents has been calculated as 82% of the total unbanked consumers. 

Table 6.C: Modify the provisions of the Recommendation relative to the beneficiaries- Variant B: Introduce a right to a basic payment account at least for national residents 
Benefit / cost  per 
stakeholder and type 

Benefit / cost description 

Euro 
(Millions) 

Calculation basis 

Number of consumers 
that could potentially 
open an account as a 
result of this option 

Benefits to consumers 

Total benefits resulting from 
improved access to a basic 
payment account  

Number of consumers impacted would be 2 million (pessimistic scenario), 6.4 million (realistic scenarios) or 10 million (optimistic scenario).  

Source: SEC(2011)906, p. 41 and annexes, p. 51, "While the number of European consumers who desire access to a bank account but are 
deprived of it have been estimated to amount to about 6.4 million, an additional optimistic scenario considers the possibility of a 10 million 
uptake. The additional demand of 3.6 million basic accounts could come from previously disinterested unbanked consumers who notice the 
new product and become interested (especially if it is low-priced). It could also come (albeit to a small extent) from some consumers who 
although not unbanked, will close their existing ordinary account in case they can get a basic account for a lower price."  

Under this policy option, it is assumed that all these consumers would be impacted. No discount is therefore applied to the 3 scenarios. 

In 2010, citizens living in another Member State represented 12.3 million people (18% of the EU population above 15 years of age).

612

444 - 2223 

262-1312 

182-911 

• 

• 

• 

• 

• 

613

Benefits from discounts from reduced use of out-of-bank money transmission services (e.g. reduced use of postal orders): EUR 60
saved annually per consumer on money transmission services multiplied by the number of unbanked consumers who would open an 
account (depending on the scenario). 

614

Benefits from discounts from reduced use of cheques: EUR 120
by the number of unbanked consumers who would open an account (depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 
Benefits from discounts from electronic payments (e.g. discounts available by paying utility bills by direct debit rather than cash): 

 saved annually per consumer by withdrawal from cheques multiplied 

615

EUR 125
consumers who would open an account (depending on the scenario). 

 saved per consumer / per year by using the more efficient means of payment multiplied by the number of unbanked 

The estimated benefit of EUR 125 per consumer per year is considered a prudent estimate.
consumers in the UK could be paying EUR 880-1 100 a year in higher costs because they are excluded from mainstream financial 
services. 617

 Data from the UK suggests that vulnerable 

616

612  http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Total_population_and_resident_non-

national_population_by_group_of_citizenship,_2010.png&filetimestamp=20111125175609  

613  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 44. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 44.  
Ibid., p. 46.  

614 
615 

EN 

225 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
                                                 
0 

• 

• 

The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 
Benefits from online purchases: EUR 0. Based on the evidence collected for this impact assessment, it is assumed that being able to 
access a bank account would not necessarily provide access to the appropriate means of payment to enable online purchases.  

Costs to consumers 

Total costs for consumers 

89-445 

Account operation costs 

74 – 371 

Cost of inappropriate use of the 
account  

15 – 72 

• 

• 

• 

Benefit / cost per 
stakeholder and type 
Benefits to payment 
services providers 

Benefit / cost description 

Recurring annual benefits from 
providing access to a basic 
payment account  

Euro 
(Millions) 
15 - 73 

•  Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of 

618

 by the number of consumers who would open an account (depending on the scenario). 

EUR 51
The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 
option. 
For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 

estimated at somewhere between EUR 17 and EUR 22 for each failed transaction
It is assumed that 25% of unbanked consumers who would open a bank account (i.e. 25% under the pessimistic, realistic and optimistic 

). 

619

620

scenarios) would make on average 2 failed transactions per year.

 This number is multiplied by the average failed transaction cost of 

621

. 

• 

EUR 20
The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 
option. 
Calculation basis 

•  Average price of a payment account which consumer has to pay has been calculated at EUR 51
624

623

account provider are equal to EUR 40
multiplied by the number of unbanked consumers who would open an account (depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 

. This results in revenue of approximately EUR 10

 for providers per each account which is 

• 

622

, where the estimated costs incurred by 

616  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 46. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 46 from Family Welfare Association (retrieved from http://www.inclusioncentre.org.uk/3.html).  

617 
618  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 40. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. The data was collected by CSES associates across the European Union from local banks. 

619  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 41. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 

620  Estimate by Commission services. 
621  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 41. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 40. The data was collected by CSES associates across the European Union from local banks. 

622 
623  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 54. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 54.  

624 

EN 

226 

EN 

 
  
 
 
 
 
 
                                                                                                                                                                                                                                                    
Costs to payment 
services providers 

Recurring annual costs resulting 
from operating a basic payment 
account  

58 – 292 

One-off costs of introducing basic 
bank accounts (if not already exist) 

N/A 

Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Euro 
(Millions) 
15 – 73 

Costs to Member States 
(governments) 

Total costs for Member States 

One-off costs of legislating 

3.02 

1.13 

Recurring costs of monitoring 
application of legislation  

1.89 

• 

• 

• 

• 

• 

• 

• 

• 

The costs are calculated by multiplying the annual cost of operation of an account (EUR 40
) by the number of consumers who would 
open an account (depending on the scenario). The CSES study also concluded that these costs were highly dependent on the design of the 
product being offered and the more electronic features provided, the cheaper the account. 626
The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 
option. 
These costs of will generally be incorporated into the annual fees charged to consumers. Over time, the more basic bank accounts that 

there are, the lower the incremental costs

, thus these are assumed to be marginal. 

627

Calculation basis 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. benefit cheques) are estimated at 

628

, thus an average of EUR 10 per recipient per annum
EUR 7-12 per recipient per annum
the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 

 has been applied which is multiplied by 

625

629

The cost of legislating is assumed to require about 1 500 man hours

630

 where the EU average employee cost per hour is estimated to be 

631

around EUR 31.5
This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 
assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of 

 which is multiplied by 24 Member States which have not yet implemented the Recommendation. 

the costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906. 

The annual cost of monitoring and enforcing is assumed to require about 2 500

633

 man hours where the EU average employee cost per 

hour is estimated to be around EUR 31.5
Recommendation yet. 

634

 which is multiplied by 24 Member States which have not yet implemented the 

632

, it was decided to use the 

625  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 52. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. Data is based on national studies, notably from the UK as well as research by external consultants. The study 
specifically states that in at least one case, stakeholders consider the UK data as representative of other countries.  
Ibid., p. 52.  

626 
627  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 50. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 54.  

628 
629  Calculation by Commission services. 
630  SEC(2011)906, annexes, p. 58. 
631  Eurostat 2008, Average Hourly Labour costs, Nace Rev. 1.1. 
632  SEC(2011)906. 
633  SEC(2011)906, annexes, p. 58. 
634  Eurostat 2008, Average Hourly Labour costs , Nace Rev. 1.1. 

EN 

227 

EN 

 
  
 
 
 
 
 
                                                 
Benefit / cost per 
stakeholder and type 
Benefits to utility firms 

Benefit / cost description 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

Euro 
(Millions) 
26 - 131 

• 

This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 
assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of 

the costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906 

Calculation basis 

635

, it was decided to use the 

• 

• 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 55 (EUR 0.6-EUR 1 for water payments 

and EUR 0.6-EUR 1 for energy payments respectively) per transaction.
to be obtained by utility firms in the 24 Member States which have not yet implemented the Recommendation, an average saving of 

 In order to make the necessary overall estimation of benefits 

636

637

 per transaction has been assumed. It is assumed that 12 transactions take place a year. This is multiplied by the number of 

EUR 1.5
unbanked consumers who would open an account (depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 

Variant C: Introduce a right to a basic payment account at least to those non-residents with a link to the country where they wish to open an account 
Since  three  Member  States  (Belgium,  France  and  Italy)  have  already  implemented  the  Recommendation,  thus  they  provide  for  a  right  to  a  basic 
payment account at least to those non-residents with a link to the country where they wish to open an account, the calculation of costs and benefits of 
this option for different stakeholders covers 24 Member States.  
In addition, for this option the number of unbanked non-residents with a link to the country where they wish to open an account has been calculated as 
50% of the total unbanked non-residents applying for  an account. This figure has  been summed  up  to  the  total  of  unbanked  national residents who 
would also have a right to a basic payment account under this option.     

Table 6.D: Modify the provisions of the Recommendation relative to the beneficiaries- Variant C: Introduce a right to a basic payment account at least to those non-residents with a link to the country 
where they wish to open an account 

Benefit / cost  per 
stakeholder and type 

Number of consumers 
that could potentially 
open an account as a 
result of this option 

Benefit / cost description 

Euro 
(Millions) 

Calculation basis 

Number of consumers impacted would be 2 million (pessimistic scenario), 6.4 million (realistic scenarios) or 10 million (optimistic scenario).  

Source: SEC(2011)906, p. 41 and annexes, p. 51, "While the number of European consumers who desire access to a bank account but are 
deprived of it have been estimated to amount to about 6.4 million, an additional optimistic scenario considers the possibility of a 10 million 
uptake. The additional demand of 3.6 million basic accounts could come from previously disinterested unbanked consumers who notice the 
new product and become interested (especially if it is low-priced). It could also come (albeit to a small extent) from some consumers who 

635  SEC(2011)906. 
636  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 60. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study; 

637  Calculation by Commission services. 

EN 

228 

EN 

 
  
 
 
 
 
 
                                                                                                                                                                                                                                                    
Benefits to consumers 

Total benefits resulting from 
improved access to a basic 
payment account  

Costs to consumers 

Total costs for consumers 

Account operation costs 

493 - 2467 

291-1456 

202-1011 

0 

99-493 

83 – 413 

although not unbanked, will close their existing ordinary account in case they can get a basic account for a lower price."  

Under this policy option, it is assumed that all these consumers would be impacted. No discount is therefore applied to the 3 scenarios. 

In 2010, citizens living in another Member State represented 12.3 million people (18% of the EU population above 15 years of age).

638

• 

• 

• 

• 

• 

• 

• 

Benefits from discounts from reduced use of out-of-bank money transmission services (e.g. reduced use of postal orders): EUR 60
saved annually per consumer on money transmission services multiplied by the number of unbanked consumers who would open an 
account (depending on the scenario). 

Benefits from discounts from reduced use of cheques: EUR 120
by the number of unbanked consumers who would open an account (depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 
Benefits from discounts from electronic payments (e.g. discounts available by paying utility bills by direct debit rather than cash): 

 saved annually per consumer by withdrawal from cheques multiplied 

640

639

EUR 125
consumers who would open an account (depending on the scenario). 

 saved per consumer / per year by using the more efficient means of payment multiplied by the number of unbanked 

The estimated benefit of EUR 125 per consumer per year is considered a prudent estimate.
consumers in the UK could be paying EUR 880-1 100 a year in higher costs because they are excluded from mainstream financial 
services. 643
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 
Benefits from online purchases: EUR 0. Based on the evidence collected for this impact assessment, it is assumed that being able to 
access a bank account would not necessarily provide access to the appropriate means of payment to enable online purchases.  

 Data from the UK suggests that vulnerable 

642

•  Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of 

EUR 51
The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 

 by the number of consumers who would open an account (depending on the scenario). 

• 

641

644

638  http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Total_population_and_resident_non-

national_population_by_group_of_citizenship,_2010.png&filetimestamp=20111125175609  

639  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 44. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 44.  
Ibid., p. 46.  
Ibid., p. 46. 

640 
641 
642 
643  From Family Welfare Association (retrieved from http://www.inclusioncentre.org.uk/3.html).  
644  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 40. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. The data was collected by CSES associates across the European Union from local banks. 

EN 

229 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                                                                                                                    
option. 

Cost of inappropriate use of the 
account  

16 – 81 

• 

• 

For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 

estimated at somewhere between EUR 17 and EUR 22 for each failed transaction
It is assumed that 25% of unbanked consumers who would open a bank account (i.e. 25% under the pessimistic, realistic and optimistic 

). 

645

646

Benefit / cost per 
stakeholder and type 
Benefits to payment 
services providers 

Benefit / cost description 

Recurring annual benefits from 
providing access to a basic 
payment account  

Euro 
(Millions) 
16 - 81 

Costs to payment 
services providers 

Recurring annual costs resulting 
from operating a basic payment 
account  

65 – 324 

One-off costs of introducing basic 
bank accounts (if not already exist) 

N/A 

• 

• 

• 

• 

scenarios) would make on average 2 failed transactions per year.

 This number is multiplied by the average failed transaction cost of 

647

. 

• 

EUR 20
The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 
option. 
Calculation basis 

•  Average price of a payment account which consumer has to pay has been calculated at EUR 51
650

649

account provider are equal to EUR 40
. This results in revenue of approximately EUR 10
multiplied by the number of unbanked consumers who would open an account (depending on the scenario for the number of impacted 
consumers). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 

 for providers per each account which is 

648

, where the estimated costs incurred by 

The costs are calculated by multiplying the annual cost of operation of an account (EUR 40
open an account (3 scenarios are 2 million, 6.4 million and 10 million). The CSES study also concluded that these costs were highly 
dependent on the design of the product being offered and the more electronic features provided, the cheaper the account. 652
The costs are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this policy 
option. 
These costs of will generally be incorporated into the annual fees charged to consumers. Over time, the more basic bank accounts that 

) by the number of consumers who would 

651

645  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 41. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 

646  Estimate by Commission services. 
647  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 41. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 40. The data was collected by CSES associates across the European Union from local banks. 

648 
649  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 54. 

650 
651 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 54. 
Ibid., p. 52. Data is based on national studies, notably from the UK as well as research by external consultants. The study specifically states that in at least one case, stakeholders consider the UK 
data as representative of other countries.  

652  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 52. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. Data is based on national studies, notably from the UK as well as research by external consultants. The study 
specifically states that in at least one case, stakeholders consider the UK data as representative of other countries.  

EN 

230 

EN 

 
  
 
 
 
                                                 
Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Euro 
(Millions) 
16 – 81 

Costs to Member States 
(governments) 

Total costs for Member States 

One-off costs of legislating 

3.02 

1.13 

Recurring costs of monitoring 
application of legislation  

1.89 

there are, the lower the incremental costs

653

, thus these are assumed to be marginal. 

Calculation basis 

• 

• 

• 

• 

• 

• 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. benefit cheques) are estimated at 

654

655

, thus an average of EUR 10 per recipient per annum
EUR 7-12 per recipient per annum
the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 

 has been applied which is multiplied by 

The cost of legislating is assumed to require about 1 500 man hours

656

 where the EU average employee cost per hour is estimated to be 

657

around EUR 31.5
This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 
assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of 

 which is multiplied by 24 Member States which have not yet implemented the Recommendation. 

the costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906. 

The annual cost of monitoring and enforcing is assumed to require about 2 500

 man hours where the EU average employee cost per 

659

658

, it was decided to use the 

hour is estimated to be around EUR 31.5
Recommendation yet. 
This methodology may overestimate the actual costs of legislating. Calculations based on an alternative methodology in another impact 
assessment on the basis of data provided by Member States give a far lower figure. However, in order to prevent an underestimation of 

 which is multiplied by 24 Member States which have not yet implemented the 

660

661

, it was decided to use the 

Benefit / cost per 

Benefit / cost description 

Euro 

Calculation basis 

the costs and in order to be consistent with a previous impact assessment on access to basic account services
methodology used in SEC(2011)906. 

653  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 50. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid, p. 54.  

654 
655  Calculation by Commission services. 
656  SEC(2011)906, annexes, p. 58. 
657  Eurostat 2008, Average Hourly Labour costs, Nace Rev. 1.1. 
658  SEC(2011)906. 
659  SEC(2011)906, annexes, p. 58. 
660  Eurostat 2008, Average Hourly Labour costs , Nace Rev. 1.1. 
661  SEC(2011)906. 

EN 

231 

EN 

 
  
 
 
 
 
                                                                                                                                                                                                                                                    
stakeholder and type 
Benefits to utility firms 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

(Millions) 
29 - 146 

• 

• 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 55 (EUR 0.6-EUR 1 for water payments 

and EUR 0.6-EUR 1 for energy payments respectively) per transaction.
to be obtained by utility firms in the 24 Member States which have not yet implemented the Recommendation, an average saving of 

 In order to make the necessary overall estimation of benefits 

662

663

 per transaction has been assumed. It is assumed that 12 transactions take place a year. This is multiplied by the number of 

EUR 1.5
unbanked consumers who would open an account (depending on the scenario). 
The benefits are discounted to take into account the fact that 3 Member States (Belgium, France and Italy) have already applied this 
policy option. 

Option 4: Improve the features of the basic payment account  
Variant A: Enlarge the list of basic services to include internet banking and online purchasing 
The calculation of costs and benefits of this option for different stakeholders covers 27 Member States. No discount is therefore applied. 

Table 6.E: Improve the features of the basic payment account- Variant A: Enlarge the list of basic services to include internet banking and online purchasing 

Benefit/ cost per 
stakeholder and type 

Benefit / cost description 

Euro 
(Millions) 

Calculation basis 

Number of consumers 
that could potentially 
open an account as a 
result of this option 

Benefits to consumers 

Total benefits resulting from 
improved access to a basic 
payment account  

236 - 1179 

Number of consumers impacted would be 2 million (pessimistic scenario), 6.4 million (realistic scenarios) or 10 million (optimistic scenario).  

Source: SEC(2011)906, p. 41 and annexes, p. 51, "While the number of European consumers who desire access to a bank account but are 
deprived of it have been estimated to amount to about 6.4 million, an additional optimistic scenario considers the possibility of a 10 million 
uptake. The additional demand of 3.6 million basic accounts could come from previously disinterested unbanked consumers who notice the 
new product and become interested (especially if it is low-priced). It could also come (albeit to a small extent) from some consumers who 
although not unbanked, will close their existing ordinary account in case they can get a basic account for a lower price." 

Under this policy option, it is assumed that all these consumers would be impacted. No discount is therefore applied to the 3 scenarios 

662  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 60. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study; 

663  Calculation by Commission services. 

EN 

232 

EN 

 
  
 
 
 
 
 
                                                 
88-440 

28-139 

120-600 

22-108 

19 – 97 

Costs to consumers 

Total costs for consumers 

Account operation costs 

Cost of inappropriate use of the 
account  

2 – 11 

• 

• 

• 

• 

• 

Benefits from discounts from reduced use of out-of-bank money transmission services (e.g. reduced use of postal orders): EUR 84
saved annually per consumer on money transmission services multiplied by the number of unbanked consumers who would open an 
account (depending on the scenario). A higher figure for savings on money transmission has been estimated for calculation of this option 

(EUR 7 per transaction per month
transactions and thus save on other more costly ways of transferring money.  

) because with an access to internet banking consumer will be able to make even more electronic 

665

664

666

Benefits from discounts from reduced use of cheques: EUR 120
by the number of unbanked consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 
In order to be able to benefit from access to an account, consumers first need access. As such, this includes the benefits of Option 2. In 
order to establish the incremental benefit of this option alone, the benefits of Option 2 are deducted from the total. 

 saved annually per consumer by withdrawal from cheques multiplied 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 
• 

Benefits from discounts from electronic payments (e.g. discounts available by paying utility bills by direct debit rather than cash): 

667

EUR 125
consumers who would open an account (2 million, 6.4 million or 10 million depending on the scenario). 

 saved per consumer / per year by using the more efficient means of payment multiplied by the number of unbanked 

The estimated benefit of EUR 125 per consumer per year is considered a prudent estimate.
consumers in the UK could be paying EUR 880-1 100 a year in higher costs because they are excluded from mainstream financial 
services. 669
In order to be able to benefit from access to an account, consumers first need access. As such, this includes the benefits of Option 2. In 
order to establish the incremental benefit of this option alone, the benefits of Option 2 are deducted from the total. 

 Data from the UK suggests that vulnerable 

•  All 27 Member States would be impacted by this option, therefore no discount is applied. 
• 

Benefits from discounts from online purchases: EUR 60 saved per consumer / per year on online purchases multiplied by a number of 
unbanked consumers.  

•  Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of EUR 

55 by the number of consumers who would open an account. A higher figure for the charge of annual account maintenance has been used 
for the calculation of this option (EUR 55) in order to cover additional features of the basic payment account: internet banking and online 
purchase facility.   
For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 
estimated at somewhere between EUR 17 and 22 for each failed transaction). 
 It is assumed that 25% of unbanked consumers who would open a bank account would make on average 2 failed transactions per year. 
This number is multiplied by an average failed transaction cost of EUR 20. 

• 

• 

668

Benefit / cost per 

Benefit / cost description 

Euro 

Calculation basis 

664  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 44. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 

665  Estimate by Commission services. 
666  Study on the costs and benefits of policy actions in the field of ensuring access to basic account – Final Report, Centre for Strategy and Evaluation Services (CSES), July 2010, p. 44. 

http://ec.europa.eu/internal_market/finservices-retail/inclusion_en.htm#study. 
Ibid., p. 46.  
Ibid., p. 46.  
Ibid., p. 46 from Family Welfare Association (retrieved from http://www.inclusioncentre.org.uk/3.html).  

667 
668 
669 

EN 

233 

EN 

 
  
 
 
 
 
 
 
 
 
                                                 
stakeholder and type 
Benefits to payment 
services providers 

Costs to payment 
services providers 

Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Recurring annual benefits from 
providing access to a basic 
payment account. 

Recurring annual costs resulting 
from operating a basic payment 
account. 

Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Costs to Member States 
(governments) 

Total costs for Member States 

One-off costs of legislating 

Benefit / cost per 
stakeholder and type 
Benefits to utility firms 

Recurring costs of monitoring 
application of legislation  

Benefit / cost description 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

(Millions) 
2 - 11 

15 – 74 

Euro 
(Millions) 
2 – 11 

0 

0 

0 

Euro 
(Millions) 
16 – 80 

•  Average price of a payment account which consumer has to pay has been calculated under this option at EUR 55, where the costs 

incurred by account provider are equal to ca. EUR 43-45. This results in revenue of ca. EUR 10 for providers per each account which is 
multiplied by a number of consumers who would open a bank account. 

• 

The costs are calculated by multiplying the annual cost of operation of an account under this option (EUR 43) by the number of 
consumers who would open an account. A higher figure of annual cost of account operation has been used for the calculation of this 
option (EUR 43) in order to cover the cost of additional features of the basic payment account: internet banking and online purchase 
facility.   
Calculation basis 

• 

• 

• 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. cheques) are estimated at EUR 7-
12 per recipient per annum, thus the average of EUR 10 per recipient per annum has been applied which is multiplied by a number of 
consumers who would open a bank account.  

The cost of legislating is assumed to require about 1500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 27 Member States. 
The cost of monitoring is assumed to require about 2500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 27 Member States. 

Calculation basis 

• 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 per transaction. A higher figure for benefits 
on payments collection by utility firms has been used for calculation of this option (EUR 2 per transaction) because with an access to 
internet banking consumer will be able to make even more electronic payments which will allow for greater savings of utility firms.  

Variant B: Enlarge the list of basic services to include a small overdraft or a 'buffer' facility 
Since one Member State (France) has already implemented the Recommendation, and in addition banks in France can offer a basic payment account 
with a small overdraft or a 'buffer' facility, therefore the calculation of costs and benefits of this option for different stakeholders covers 26 Member 
States. 
In addition, for this option the total number of unbanked consumers who would open a basic payment account has been reduced by 10%. Given a small 
overdraft or a buffer facility available under this option, providers would need to conduct creditworthiness assessment of applicants and it is estimated 
that based on this, 10% of them would be rejected (based on data from the UK).  

Table 6.F: Improve the features of the basic payment account- Variant B: Enlarge the list of basic services to include a small overdraft or a 'buffer' facility 

Benefit / cost  per 
stakeholder and type 
Benefits to consumers 

Benefit / cost description 

Total benefits resulting from 
improved access to a basic 
payment account  

Calculation basis 

Euro 
(Millions) 
-14 to -68 

EN 

234 

EN 

 
  
 
 
 
 
-8 to -40 

-6 to -28 

• 

• 

• 

Benefits from discounts from reduced use of out-of-bank money transmission: EUR 60 saved per consumer / per year on money 
transmission services multiplied by a number of unbanked consumers. 
Benefits from discounts from reduced use of cheques: EUR 120 saved per consumer / per year by withdrawal from cheques multiplied by 
a number of unbanked consumers. 

Benefits from discounts from electronic payments: EUR 125 saved per consumer / per year multiplied by a number of unbanked 
consumers. 

Costs to consumers 

Total costs for consumers 

-11 to -57 

Account operation costs 

-2 to -11 

•  Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of EUR 

51 by the number of consumers who would open an account.   

Cost of inappropriate use of the 
account  

-9 to -46 

Benefit / cost per 
stakeholder and type 
Benefits to payment 
services providers 

Costs to payment 
services providers 

Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Benefit / cost description 

Recurring annual benefits from 
providing access to a basic 
payment account. 

Recurring annual costs resulting 
from operating a basic payment 
account. 
Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Costs to Member States 
(governments) 

Total costs for Member States 

One-off costs of legislating 

Benefit / cost per 
stakeholder and type 
Benefits to utility firms 

Recurring costs of monitoring 
application of legislation  

Benefit / cost description 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

• 

• 

For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 
estimated at somewhere between EUR 17 and 22 for each failed transaction). 
 It is assumed that under this option 25% of unbanked consumers who would open a bank account would make on average 1 failed 
transaction per year. This number is multiplied by an average failed transaction cost of EUR 20. It is assumed that consumers with 
positive credit histories are less likely to make failed transactions and therefore the number of failed transactions per year has been 
decreased (from 2 to 1) compared to other policy options. 

Calculation basis 

•  Average price of a payment account which consumer has to pay has been calculated at EUR 51, where the costs incurred by account 

provider are equal to ca. EUR 40. This results in revenue of ca. EUR 10 for providers per each account which is multiplied by a number 
of consumers who would open a bank account. 

Euro 
(Millions) 
-0.4 to -2 

-2 to -9 

• 

The costs are calculated by multiplying the annual cost of operation of an account (EUR 40) by the number of consumers who would 
open an account. 

Euro 
(Millions) 
-0.04 to -2 

Calculation basis 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. cheques) are estimated at EUR 7-12 
per recipient per annum, thus the average of EUR 10 per recipient per annum has been applied which is multiplied by a number of 
consumers who would open a bank account.  

2.52 

0.94 

1.57 

• 

• 

The cost of legislating is assumed to require about 1500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 26 Member States. 

The cost of monitoring is assumed to require about 2500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 26 Member States. 

Euro 
(Millions) 
-0.8 to -4 

Calculation basis 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 per transaction. In order to make the necessary 

overall estimation of benefits to be obtained by utility firms in the 26 Member States, an average of EUR 1.5 has been assumed and 
multiplied by a number of consumers who would open a bank account. 

EN 

235 

EN 

 
  
 
 
 
 
 
 
 
 
Variant C: Indicate a minimum account balance that cannot be seized 
Since one Member State (France) has already implemented the Recommendation, and in addition banks in France can offer a basic payment account 
with a minimum account balance that cannot be seized, therefore the calculation of costs and benefits of this option for different stakeholders covers 26 
Member States. 

Benefit / cost  per 
stakeholder and type 
Benefits to consumers 

Table 6.G: Improve the features of the basic payment account- Variant C: Indicate a minimum account balance that cannot be seized 
Benefit / cost description 

Calculation basis 

Total benefits resulting from 
improved access to a basic 
payment account  

Euro 
(Millions) 
45 – 226 

27 – 133 

Benefits from discounts from reduced use of out-of-bank money transmission: EUR 60 saved per consumer / per year on money transmission 

services multiplied by a number of unbanked consumers. 

Benefits from discounts from reduced use of cheques: EUR 120 saved per consumer / per year by withdrawal from cheques multiplied by a 

number of unbanked consumers. 

19 – 93 

Benefits from discounts from electronic payments: EUR 125 saved per consumer / per year multiplied by a number of unbanked consumers. 

Costs to consumers 

Total costs for consumers 

9 – 45 

Account operation costs 

8 – 38 

Cost of inappropriate use of the 
account  

1 - 7 

• 

• 

• 

Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of EUR 
51 by the number of consumers who would open an account.   

For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 
estimated at somewhere between EUR 17 and 22 for each failed transaction). 
 It is assumed that under this option 25% of unbanked consumers who would open a bank account would make on average 2 failed 
transactions per year. This number is multiplied by an average failed transaction cost of EUR 20.  

Benefit / cost per 
stakeholder and type 
Benefits to payment 
services providers 

Costs to payment 
services providers 

Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Benefit / cost description 

Recurring annual benefits from 
providing access to a basic 
payment account. 

Recurring annual costs resulting 
from operating a basic payment 
account. 
Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Euro 
(Millions) 
1 – 7 

Calculation basis 

Average price of a payment account which consumer has to pay has been calculated at EUR 51, where the costs incurred by account provider 
are equal to ca. EUR 40. This results in revenue of ca. EUR 10 for providers per each account which is multiplied by a number of 
consumers who would open a bank account. 

6 – 30 

• 

The costs are calculated by multiplying the annual cost of operation of an account (EUR 40) by the number of consumers who would 
open an account. 

Euro 
(Millions) 
1.5 – 7 

Calculation basis 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. cheques) are estimated at EUR 7-12 
per recipient per annum, thus the average of EUR 10 per recipient per annum has been applied which is multiplied by a number of 
consumers who would open a bank account.  

Costs to Member States 

Total costs for Member States 

2.52 

EN 

236 

EN 

 
  
 
 
 
 
 
 
(governments) 

One-off costs of legislating 

Benefit / cost per 
stakeholder and type 
Benefits to utility firms 

Recurring costs of monitoring 
application of legislation  
Benefit / cost description 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

0.94 

1.57 

Euro 
(Millions) 
3 - 13 

• 

• 

The cost of legislating is assumed to require about 1500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 26 Member States. 
The cost of monitoring is assumed to require about 2500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 26 Member States. 

Calculation basis 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 per transaction. In order to make the necessary 

overall estimation of benefits to be obtained by utility firms in the 26 Member States, an average of EUR 1.5 has been assumed and 
multiplied by a number of consumers who would open a bank account. 

Variant D: Ensure that the features of the bank account are not of a discriminatory nature 
The calculation of costs and benefits of this option for different stakeholders covers 27 Member States.   

Table 6.H: Improve the features of the basic payment account- Ensure that the features of the bank account are not of a discriminatory nature 

Benefit / cost  per 
stakeholder and type 
Benefits to consumers 

Benefit / cost description 

Total benefits resulting from 
improved access to a basic 
payment account  

Calculation basis 

Euro 
(Millions) 
68  339 

40 – 200 

Benefits from discounts from reduced use of out-of-bank money transmission: EUR 60 saved per consumer / per year on money transmission 

services multiplied by a number of unbanked consumers. 

Benefits from discounts from reduced use of cheques: EUR 120 saved per consumer / per year by withdrawal from cheques multiplied by a 

number of unbanked consumers. 

28 – 139 

Benefits from discounts from electronic payments: EUR 125 saved per consumer / per year multiplied by a number of unbanked consumers. 

Costs to consumers 

Total costs for consumers 

Account operation costs 

Benefit / cost per 
stakeholder and type 
Benefits to payment 
services providers 

Costs to payment 
services providers 

Cost of inappropriate use of the 
account  

Benefit / cost description 

Recurring annual benefits from 
providing access to a basic 
payment account. 

Recurring annual costs resulting 
from operating a basic payment 
account. 

22 – 108 

19 – 97 

2 – 11 

Euro 
(Millions) 
0 

19 - 94 

• 

• 

• 

Annual recurring charge for maintenance of the account: the figure is calculated by multiplying the annual maintenance charge of EUR 
55 by the number of consumers who would open an account. A higher figure for the charge of annual account maintenance has been 
used for the calculation of this option (EUR 55) in order to cover the possibility to use the account (e.g. debit card) also abroad.    
For the purposes of this calculation, an average failed transaction cost of EUR 20 is assumed (in France and the UK, these charges are 
estimated at somewhere between EUR 17 and 22 for each failed transaction). 
 It is assumed that 25% of unbanked consumers who would open a bank account would make on average 2 failed transactions per year. 
This number is multiplied by an average failed transaction cost of EUR 20. 

Calculation basis 

Average price of a payment account which consumer has to pay has been calculated under this option at EUR 55, where the costs incurred by 
account provider are equal to ca. EUR 45-47. The costs are higher for banks under this option because they would need to incur higher 
system costs for the account services provided in the same way at national and cross-border level. This gives the revenue of ca. EUR 8 
for providers per each account which is multiplied by a number of consumers who would open a bank account. 
The costs are calculated by multiplying the annual cost of operation of an account under this option (EUR 45) by the number of 
consumers who would open an account. A higher figure of annual cost of account operation has been used for the calculation of this 
option (EUR 45) in order to cover the possibility to use the account (e.g. debit card) also abroad.   

• 

EN 

237 

EN 

 
  
 
 
 
 
 
Benefit / cost per 
stakeholder and type 
Benefits to Member 
States (governments) 

Benefit / cost description 

Benefits resulting from savings on 
payments of social security 

Euro 
(Millions) 
2 – 11 

Calculation basis 

Savings resulting from payments of social benefits via bank transfers (instead of more costly means e.g. cheques) are estimated at EUR 7-12 
per recipient per annum, thus the average of EUR 10 per recipient per annum has been applied which is multiplied by a number of 
consumers who would open a bank account.  

Costs to Member States 
(governments) 

Total costs for Member States 

One-off costs of legislating 

Benefit / cost per 
stakeholder and type 
Benefits to utility firms 

Recurring costs of monitoring 
application of legislation  

Benefit / cost description 

Recurring annual benefits from 
reductions in transaction costs: 
many banked consumers would 
switch to direct debit payments. 

3.8 

1.41 

2.36 

• 

• 

The cost of legislating is assumed to require about 1500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 27 Member States. 

The cost of monitoring is assumed to require about 2500 man hours where the EU average employee cost per hour is estimated to be 
around EUR 31.5 which is multiplied by 27 Member States. 

Euro 
(Millions) 
4 - 20 

Calculation basis 

• 

The transaction cost savings for water and energy payments can oscillate between EUR 1.2-2 per transaction. In order to make the 
necessary overall estimation of benefits to be obtained by utility firms in the 27 Member States, an average of EUR 1.5 has been 
assumed and multiplied by a number of consumers who would open a bank account. 

Ease of comparison of bank fees, requirements covering presentation and payment account switching 
The assumptions used as well as the basis for calculation of economic impacts in this section are taken from the study 'Quantification of the economic 
impacts of EU action to improve fee transparency, comparability and mobility in the internal market for bank personal current accounts' 
Assumptions used in the analysis of costs and benefits 

• 

• 

• 

For  the  purposes  of  this  assessment  costs  and  benefits  are  assumed  to  accrue  as  from  2013.  The  basis  for  adjustments  made  to  express 
quantities, whether in terms of volumes or prices, relative to the base year 2013 is described within each assumption below. 

All benefits and recurring costs are calculated over a period covering 2013 to 2022 and are expressed at their present values, discounted at a 
rate of 4%. 
EU average prices are derived from 2009 average prices670 adjusted for inflation671 to express prices in 2012 terms. In order to adjust prices to 
2012 levels, the rate of inflation in 2011 was used by way of assumption.672  

670  Data collection for prices of current accounts provided to consumers – Van Dijk Management Consultants (2009). 
671  Eurostat: HICP (2005=100) - Annual Data (average index and rate of change) – Changes in prices of financial services, 2009 – 2011. 
672

  Specific price information for Belgium, Poland and Spain was used to further adjust the evolution in prices. Information was collected as part of the study Quantification of the economic impacts of 

EU action to improve fee transparency, comparability and mobility in the internal market for bank personal current accounts, GHK consulting. 

EN 

238 

EN 

 
  
 
 
                                                 
• 

Labour costs to credit institutions: Unless otherwise specified the daily labour rate for credit institutions is EUR 232. This is computed on 
the basis of:  

– 

– 

– 

– 

– 

EU average hourly labour rate for 2007673  (EUR 27.11) 

Starting  from  the  EU  average  hourly  labour  rate  for  2007,  a  forecast  is  computed  for  2012  (EUR  32.44),  based  on  an  annual 
increase in the EU average hourly labour rate of 3.7%. 

The  annual  3.7%  increase  is  calculated  on  the  basis  of  the  average  year-on-year  increase  in  the  EU  average  hourly  labour  rate 
recorded between 2000 and 2007.673 

For  the  purposes  of  this  assessment  costs  are  assumed  to  be  incurred  as  from  2013.  The  2012  forecast  hourly  labour  rate  is 
adjusted for inflation at a rate of 2% to reflect 2013 prices. 

The daily labour rate is computed on the basis of a 7 hour working day. 

• 

• 

Labour  costs  for  management  in  credit  institutions:  The  cost  of  labour  for  management  in  credit  institutions  is  calculated  at  a  20% 
premium of the labour costs to credit institutions described above.  

Labour costs to Member States: Unless otherwise specified the daily labour rate for Member States is EUR 115. This is computed on the 
basis of:  

– 

– 

– 

– 

– 

EU average hourly labour rate for 2007674  (Euro 12.02) 

The EU average hourly labour rate is forecast for 2012 (Euro 16.14), on the basis of an annual increase in the EU average hourly 
labour rate of 6.1% between 2008 and 2012. 

The  annual  6.1%  increase  is  calculated  on  the  basis  of  the  average  year-on-year  increase  in  the  EU  average  hourly  labour  rate 
recorded between 2000 and 2007 

For  the  purposes  of  this  assessment  costs  are  assumed  to  be  incurred  as  from  2013.  The  2012  forecast  hourly  labour  rate  is 
adjusted for inflation at a rate of 2% to reflect 2013 prices. 

The daily labour rate is computed on the basis of a 7 hour working day. 

• 

Unless otherwise stated the total number of credit institutions in the EU in 2013 is estimated at 7.855. This is estimated as follows: 

673  Source: Hourly labour costs, Financial Intermediation – Nace Rev. 1.1, Eurostat, 2007. 
674  Hourly labour costs, Public administration and defence; compulsory social security – Nace Rev. 1.1, Eurostat, 2007. 

EN 

239 

EN 

 
  
                                                 
• 

• 

• 

– 

The number of credit institutions in the EU in May 2012675 (8.003) 

An assumed annual reduction in the number of credit institutions due to gradual consolidation of 1.85% 

The reduction rate is calculated based on the average decrease in the number of credit institutions recorded between 2009 (8.360) and 2011 
(8.060) 

Unless otherwise stated the total number of employees in credit institutions in the EU in 2013 is estimated at 2 538 320. This is estimated 
as follows: 

– 

– 

– 

The  forecast  2013  average  number  of  employees  per  credit  institution  (324),  multiplied  by  the  forecast  number  of  credit 
institutions (7.855) described above. 

The  2012  average  number  of  employees  is  forecast  on  the  basis  of  change  in  the  average  number  of  employees  in  credit 
institutions between 2009, (327) and 2010, (326). 

Average number of employees in credit institutions for years 2009 and 2010 are derived from the total number of employees in 
2009 (2 751 008) and 2010 (2 700 806)676 divided by the average number of credit institutions between January and December in 
the same years (2009: 8 421; 2010: 8 290)675  

• 

Unless  otherwise  stated  the  total  number  of  bank  account  holders  in  the  EU  in  2013  is  calculated  as  365 972  765.  This  is  estimates  as 
follows: 

– 

– 

– 

– 

EU population figures and for 2011677 - EU population over 15 years of age for 2011, (422 133 188) and EU projected population 
figures for 2015677 (428 993 918) 

The  average  annual  increase  between  the  EU  population  over  15  years  of  age  between  the  2011  and  2015  figures  above  is 
computed as +0,4% 

Applying an average annual increase of +0,4%, the 2013 forecast EU population over 15 years of age is 425 549 727. 
The bank account penetration rate in the EU was 84% in 2011.678 

675  European Central Bank: (List of MFIs ; Frequency: Monthly ; MFI category: Credit Institutions). 
676  European Central Bank: (Number of employees of credit institutions). 
677  Eurostat Population data; Population projections – both figures are computed as total EU population less EU population under 15 years of age. 
678

  Special Eurobarometer on Retail Financial Services, European Commission, February 2012, figure 2, p. 13, http://ec.europa.eu/internal_market/finservices-retail/policy_en.htm. 

EN 

240 

EN 

 
  
                                                 
– 

– 

– 

– 

For  the  purposes  of  estimating  bank  account  penetration  levels  in  the  EU  in  2013,  a  1%  annual  increase  is  assumed.  The 
penetration rate in the EU is therefore calculated as 86% 

The number of current account holders in 2013 is derived by applying the 86% penetration rate to the EU population over 15 years 
of age of 425 549 727 

A  discount  factor  is  applied  in  computing  costs  where  relevant  to  reflect  the  distance  from  the  policy  frontier  in  each  option 
assessed. 
Table 6.I below provides a summary of discount factors applied to the calculation of costs where relevant.679  

Table 6.I: Discount factors applied to the calculation of costs 

Measure 

Variant 

Discount 
Factor 

Ex- ante Fee Disclosure 

1. Standard price list 

2.Glossaries 

3.Comparison website 

4.Representative examples 

5.Cost simulations 

A:20 most common fees 

A:non- harmonised terminology 

B: harmonise terminology 

A: single website at Member State level 
B: Accreditation system in Member 
State 

A: self- tailored usage profiles 

B:standard usage profiles 

A: self-tailored usage profiles 

B: standard usage profiles  

6.EU standardised form for provision of information on fees 

Comparable fee disclosure ex- post 

1.Ex- post fee information 

2.EU standardised forms 

Facilitating the process of payment account switching 

2. Ensure that the switching services follow the Common Principles  

3. Improve the effectiveness of the Common Principles  

A: enhanced Common Principle 

B: incl. cross-border provisions 

0.35 

0.29 

0.65 

0.51 

1.00 

0.74 

0.83 

0.89 

0.97 

0.46 

0.35 

0.80 

0.15 

0.34 

0.58 

679

EN 

  The  regulatory  baseline  assessment  and  methodology  used  to  compute  the  discounting  factor  were  provided  in  the  study  Quantification  of  the  economic  impacts  of  EU  action  to  improve  fee 

transparency, comparability and mobility in the internal market for bank personal current accounts, GHK consulting. 

241 

EN 

 
  
  
  
 
 
  
  
  
  
  
                                                 
4. Automatic redirection service 

5.Bank account portability 

A: at Member State level 

B: at EU level 

A: at Member State level 

B: at EU level 

0.81 

0.84 

1.00 

1.00 

• 

• 

• 

• 

Discount factors are computed based on a regulatory baseline assessment for a sample of 16 Member States to determine the distance from the 
policy frontier posed by each of the options under assessment. 

Distance from policy frontier assessments were quantified into rating scales from 0 to 5. A '0' rating means that equivalent measures to those 
proposed by any single policy option are present in a Member State. A rating of 5 means that the Member State has no measures in place that 
relate or approximate to the measures proposed within a policy option. 

Ratings for the individual Member States assessed were aggregated into groups per rating given. A simple extrapolation method was used to 
apply the ratings to the 27 Member States. The extrapolation method used was to apply ratings in the same proportions for the 27 Member 
States as those identified through the assessment of the regulatory framework within the 16 Member States analysed. 

The rating scales measuring the  distance  from  the policy  frontier were  then applied to costs by setting up the set of assumptions indicated 
below:  

Distance 

0 = no change 

1 = minor approximation

2 = some change

3 = moderate change

4 = major change

5 = no measures in place

Table 6.J 

Adjustment factor*

0%

10%

25%

50%

75%

100%

*Expressed as a percentage applied to costs computed either
on a time basis or as acuisition costs

Costs 
One-off  costs  are  the  initial  outlay  incurred  by  credit  institutions  or  member  states  as  a  result  of  implementing  a  policy  option.  One-off  costs  are 
assumed to be incurred within 1 year from the adoption of a policy option and are therefore expressed in their nominal values. 
Recurring costs are costs incurred on an ongoing basis or at a certain level of frequency. All recurring costs are computed over the period from 2013 to 
2022 for the purposes of this impact assessment.  

EN 

242 

EN 

 
  
 
Both  one-off  costs  and  recurring  costs  may  take  the  form  of  time-based  costs  or  acquisition  costs.  Time-based  costs  are  costs  resulting  from  the 
allocation  of  human  resources  to  an  activity,  required  to  implement  a  policy  option.  Acquisition  costs  represent  the  cost  of  acquiring  a  good  or  a 
service.  
Time-based costs 
Time based costs are computed by multiplying the following elements: 

• 

• 

• 

Daily labour rate (for credit institutions or Member States as described above); 

Number of full time equivalent involved and time spent by each on an activity generating costs; 

A relevant cost multiplier (expressed in terms of number of credit institutions, number of employees of credit institutions, number 
of bank account holders, number of Member States, or number of employees of public administrations) 

•  Where relevant the discount factor is applied to reflect the extent to which currently a policy option is at least partially applied 

within Member States.  

Acquisition costs 
Acquisition costs are computed by multiplying the following elements: 

• 

• 

Unit cost of acquiring a good or service 

A relevant cost multiplier (expressed in terms of number of credit institutions, number of employees of credit institutions, number 
of bank account holders, number of Member States, or number of employees of public administrations) 

•  Where relevant the discount factor is applied to reflect the extent to which currently a policy option is at least partially applied 

within Member States 

The basis for calculation of each of the activities resulting in costs and the benefits quantified for individual options as part of this impact assessment are provided 
below. 
Benefits 
Consumers: Changes in switching behaviour 
Options  that  contribute  towards  promoting  ease  of  comparison  and  set  out  common  presentation  criteria,  coupled  with  measures  to  ensure  smooth 
switching are expected to impact the number of consumers who switch to a better bank account offer. While benefits in the form of more or better 
services,  higher  service  quality  or  customer  care  are  important  triggers  for  consumers  who  decide  to  switch  suppliers,  these  benefits  could  not  be 
quantified.  The  benefit  to  an  incremental  number  of  consumers  who  would  switch  bank  accounts  as  a  result  of  EU  action  is  quantified  in  terms  of 
possible cost savings from moving to a cheaper account. 

EN 

243 

EN 

 
  
For  the  purposes  of  this  assessment  it  is  assumed  that  consumers  could  derive  up  to  20%  savings  on  the  computed  EU  average  price  for  a  current 
account. The increase in switching levels is estimated per option for a range between a cumulative +0.05% and +3.25% per annum as a result of EU 
action. Details of the impact allocated per option of increased switching levels are provided below.  
Consumers: Changes in account management behaviour 
The analysis constructs a benefit to consumers linked specifically to the options ex-post information requirements. The benefit derives from potential 
cost savings consumers would accrue through by being better informed about the cost to them of holding their current account.  
For the purposes of this assessment it is assumed that consumers could derive up to 10% in savings on the computed EU average price for a current 
account  by  adapting  consumption  patterns  on  the  basis  of  information  available  to  them  about  costs  incurred.  The  benefit  is  calculated  upon  the 
assumption  that  the  percentage  of  consumers  who  would  benefit  from  changes  in  consumption  patterns  are:  0%:  2013;  1.28%:  2014,  2015; 3.84%: 
2016-2022.  Details of the impact allocated per option of increased switching levels is provided in table 6.K to table 6.CC below.  
The basis for calculation of each of the activities resulting in costs and the benefits quantified for individual options as part of this impact assessment are provided in 
table 6.K to table 6.CC below. 
Detailed tables of benefits and costs 

Table 6.K:  Ease of comparison and presentation requirements for bank fees – Option 2 

Option 2:  A standard price list to be provided as part of account opening procedures  
Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

Euro (Millions) 

584.87 

Benefit accrued from changes 
in switching behaviour  

Cost per stakeholder and 
cost type 
One-off costs to credit 
institutions 

Time-based costs 

Cost description  

Internal communication and 
training 

Range in Euro 
(Millions) 
5.93–11.86 

Calculation basis 

• 
• 

• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 
constant +0.2%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly 
average cost of a bank account between 2013 and 2022 

Calculation basis 

1 to 2 hours per person 

• 
•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is assumed 

to be 20% of industry workforce 

•  Discount factor – distance from policy frontier = 0.35 

Input into the process of 
determining a list of most 
relevant fees 

0.77 – 1.28 

2 staff members per bank  would be involved in this exercise 

• 
•  They will devote 3 to 5 days each 
•  Not all credit institutions across the EU would contribute to this exercise – it is assumed that 20% ( of the total of 7.855) credit 

institutions, would contribute to this process 

•  Discount factor – distance from policy frontier = 0.35 

EN 

244 

EN 

 
  
 
 
 
Time spent by the legal 
department to familiarise with 
legislation  

Management time spent 
reviewing product and pricing 
strategy 

0.64 – 1.28 

1.16 

Time spent by legal department 
to adapt contractual 
documentation 

0.91 – 1.82 

One-off costs to Credit 
institutions 

Acquisition costs 

Recurring costs to Credit 
institutions 

Time-based costs 

Cost of adapting marketing/ 
advertising promotional 
material 

Cost of updating/adapting IT 
applications to provide standard 
price lists 
Updating websites to provide 
newly required information 

Additional staff costs generated 
by new compliance 
requirements 
Recurring reporting 
requirements 

Recurring costs to Credit 
institutions 

Costs of printing price lists

Acquisition costs 

One-off costs to public 
authorities 

Identifying and agreeing 20 
most common fees 

Time-based costs 

9.41 – 17.41 

83.21 – 138.69 

2.77 – 5.55 

0.55 – 1.39 

86.54 – 145.62 
142.85 

8.02 -  16.05 

150.84 – 158.90 
32.30- 96.89 

32.30- 96.89 

0.04 – 0.07 

Transposing EU legislation into 
national law 

0.01 – 0.02 

1 staff member per bank  would be involved in this exercise 

• 
•  Time spent 1 to 2 days  
•  Discount factor – distance from policy frontier = 0.35  

0.5 days per person – one half day meeting to determine new pricing strategy 

3 members of management team per credit institution  

• 
• 
• 
•  Discount factor – distance from policy frontier = 0.35  

It is assumed that management wages are higher than average industry wages by 20% 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts to include references to the standard price list which would now 

0.5 to 1 day per person 

have a specific name under national law 

•  Unit cost per credit institution = range of Euro 30 000 – 50 000  
•  Discount factor – distance from policy frontier = 0.35 
• 

•  Unit cost per credit institution = range of Euro 1 000 – 2 000  
•  Discount factor – distance from policy frontier = 0.35 

Individual cost per credit institution ranging between Euro 200 - 500  

• 
•  Discount factor: Distance from the policy frontier  = 0.35 

10% of 1 Full Time Equivalent per credit institution per annum 

• 
•  Discount factor: Distance from the policy frontier  = 0.35 

1 person per bank 

• 
• 
0.5 to 1 day per year 
•  No discount factor applied 

•  Unit cost = Euro 0.10 to 0.30 per print out 
•  Lists are made available in hard copy format to 10% of customers [consider bank account holders] 
•  Discounting factor not applied as new price lists would need to be printed in accordance with standard format and a given name 

2 officials are involved 

• 
•  Each official spends 20 to 30 days per year on this activity 
•  Discount factor: Distance from the policy frontier  = 0.35 

1 official involved  

• 
•  Time spent estimated at 10 to 15 days on this activity 

EN 

245 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring costs to public 
authorities 

Time-based costs 

Revising list of common fees 

0.05-0.09 

0.10-  0.19 

Monitoring compliance 

0.12- 0.23 

Reporting to EU 

0.05 -  0.08 

Enforcement costs e.g. sweeps, 
investigations 

0.33- 0.66 

0.60-1.17 

•  Discount factor: Distance from the policy frontier  = 0.35 

2 officials are involved 

• 
•  Time spent estimated at 5 to 10 days per year on this activity 
•  Discount factor: Distance from the policy frontier  = 0.35 

1 official involved  

• 
• 
•  Discount factor: Distance from the policy frontier  = 0.35 

12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 

1 official involved  

• 
• 
•  Discounting factor not applied – as not a requirement under current situation 

2 to 3 days per official per year 

1 official involved  

• 
• 
•  Discount factor: Distance from the policy frontier  = 0.35 

12 to 24 days per year 

Table 6.L:  Ease of comparison and presentation requirements for bank fees – Option 3 Variant A 

Option 3:  Introduce the requirement to develop glossaries for bank fee terms  

Cost per stakeholder and 
cost type 
One-off costs to credit 
institutions 
Time-based costs 

Variant A: A glossary containing non-harmonised terminology 
Range in EUR 
(Millions) 
4.83 – 9.66 

Cost description  

Internal communication and 
training 

Time spent on developing 
glossary of fee terms used by a 
bank 

Time spent by the legal 
department to familiarise with 
legislation  

Time spent by legal department 
to adapt contractual 
documentation 

One-off costs to Credit 
institutions 

Cost of updating/adapting IT 
applications with a glossary 

1.57 – 2.61 

0.52 – 1.05 

0.91 – 1.82 

7.83-15.14 

2.26 –  4.52 

Calculation basis  

1 to 2 hours per person 

• 
•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is assumed to 

be 20% of industry workforce 

•  Discount factor – distance from policy frontier = 0.29 

1 staff members per bank  would be involved in this exercise 

• 
•  They will devote 3 to 5 days each 
•  Discount factor – distance from policy frontier = 0.29 

1 staff member per bank  would be involved in this exercise 

• 
•  Time spent 1 to 2 days per year 
•  Discount factor – distance from policy frontier = 0.29 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts to include references to the glossary 

0.5 to 1 day per person 

•  Unit cost per credit institution = range of EUR 1.000 - 2.000  
•  Discount factor – distance from policy frontier = 0.29 

EN 

246 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition costs 

Adding glossary to website 

1.57 – 3.93 

Individual cost per credit institution ranging between Euro 200 - 500  

• 
•  Discounting factor not applied as all banks would have to add new, glossary to websites. 

Recurring costs to Credit 
institutions 
Time-based costs 

Additional staff costs generated 
by new compliance requirements 

Updating glossary with new 
fees/services 

Recurring reporting 
requirements 

3.83-8.44 

116.30 

16.05-32.11 

8.03-16.05 

Recurring costs to Credit 
institutions 

Acquisition costs 

One-off costs to public 
authorities 
Time-based costs 

Costs of printing glossaries 

9.29-27.86 

140.38 – 164.46 

Initial compilation of glossary 

0.01 – 0.02 

9.29-27.86 

Transposing EU legislation into 
national law 

0.02– 0.03 

Updating glossary 

0.02-0.05 

0.11-0.16 

Recurring costs to public 
authorities 
Time-based costs 

Monitoring compliance 

0.33-0.66 

Reporting to EU 

0.05-0.08 

10% of 1 Full Time Equivalent per credit institution per annum 

• 
•  Discount factor – distance from policy frontier = 0.29 

1 person per bank 

• 
• 
•  Discounting factor not applied as all credit institutions would have to update glossary when new terms are introduced 

1 to 2 days per year 

1 person per bank 

• 
• 
0.5 to 1 day per year 
•  No discount factor applied. 

•  Unit cost = Euro 0.10 to 0.30 per print out 
•  Glossary assumed to be made available in hard copy format to 10% of customers 
•  Discount factor – distance from policy frontier = 0.29 

2 officials are involved 

• 
•  Each official spends 5 to 10 days per year on this activity 
•  Discount factor: Distance from the policy frontier  = 0.29 

1 official involved  

• 
•  Time spent estimated at 5 to 10 days on this activity 
•  Discount factor not applied as there is no current legislative basis in Member States 

2 officials are involved 

• 
•  Time spent estimated at 2 to 3 days per year on this activity 
•  Discount factor not applied as there is no current legislative basis in Member States  

1 official involved  

• 
• 
•  Discounting factor not applied – no legislative base for glossaries in Member States currently 

12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 

1 official involved  

• 
• 
•  Discounting factor not applied – as not a requirement under current situation 

2 to 3 days per official per year 

Enforcement costs  

0.33-0.66 

• 
• 

1 official involved  

12 to 24 days per year 

EN 

247 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.82-1.56 

•  Discounting factor not applied – as not a requirement under current situation  

Table 6.M:  Ease of comparison and presentation requirements for bank fees – Option 3 Variant B 

Option 3:  Introduce the requirement to develop glossaries for bank fee terms  

Variant B: A glossary based on fully harmonised terminology 

Cost per stakeholder and 
cost type 
One-off costs to credit 
institutions 
Time-based costs 

Cost description  

Internal communication and 
training 

Range in Euro 
(Millions) 
21.73 – 38.03 

Calculation basis  

0.3 to 0.5  days per person 

• 
•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is 

Industry input /support to the 
development of a standardised 
glossary 

Time spent by the legal 
department to familiarise with 
legislation  

Management time spent on 
reviewing product/ pricing 
strategy 

Time spent by legal department 
to adapt contractual 
documentation 

One-off costs to Credit 
institutions 
Acquisition costs 

Cost of updating/adapting IT 
applications with a glossary 
Adding glossary to website 

Recurring costs to Credit 
institutions 
Time-based costs 

Additional staff costs generated 
by new compliance requirements 

Updating glossary with new 
fees/services 

Recurring reporting 
requirements 

EN 

1.41 – 2.35 

1.18 – 2.35 

8.47 – 14.12 

0.91 – 1.82 

33.70-58.67 

5.08 –  10.16 

1.57 – 3.93 

6.65-14.09 
261.68 

32.11 – 48.16 

8.03 – 16.05 

assumed to be 20% of industry workforce 

•  Discount factor – distance from policy frontier = 0.65 

2 staff members per bank  would be involved in this exercise 

• 
•  They will devote 3 to 5 days each 
•  Discount factor – distance from policy frontier = 0.65  

1 staff member per bank  would be involved in this exercise 

• 
•  Time spent 1 to 2 days per year 
•  Discount factor – distance from policy frontier = 0.65  

3 to 5 days per person 

2 members of management team per credit institution 

• 
• 
• 
•  Discount factor – distance from policy frontier = 0.65 

It is assumed that management wages are higher than average industry wages by 20% 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts to include references to the glossary 

0.5 to 1 day per person 

•  Unit cost per credit institution = range of Euro 1 000 – 2 000 .  
•  Discount factor – distance from policy frontier = 0.65 
• 
•  Discounting factor not applied as all banks would have to add new, glossary to websites. 

Individual cost per credit institution ranging between Euro 200 - 500  

10% of 1 Full Time Equivalent per credit institution per annum 

• 
•  Discount factor – distance from policy frontier = 0.65 

1 person per bank 

• 
• 
•  Discounting factor not applied as all credit institutions would have to update glossary when new terms are introduced 

2 to 3 days per year 

• 
• 

1 person per bank 

0.5 to 1 day per year 

248 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring costs to Credit 
institutions 
Acquisition costs 

One-off costs to public 
authorities 
Time-based costs 

Costs of printing glossaries 

Initial compilation of glossary 

Transposing EU legislation into 
national law 

Recurring costs to public 
authorities 
Time-based costs 

Updating glossary 

301.81 – 325.89 
32.30 – 96.89 

32.30 – 96.89 
0.06 – 0.08 

0.02– 0.03 

0.8-0.11 
0.27 – 0.55 

Monitoring compliance 

0.33 – 0.66 

Reporting to EU 

0.05 – 0.08 

Enforcement costs  

0.33 – 0.66 

0.99 -  1.95 

•  No discount factor applied. 

•  Unit cost = Euro 0.10 to 0.30 per print out 
•  Glossary assumed to be made available in hard copy format to 10% of customers 
•  Discounting factor not applied as all banks would have to print glossaries. 

2 officials are involved 

• 
•  Each official spends 15 to 20 days per year on this activity 
•  Discount factor: Distance from the policy frontier  = 0.65 
• 
•  Time spent estimated at 5 to 10 days on this activity 
•  Discount factor not applied as there is no current legislative basis in Member States 

1 official involved  

2 officials are involved 

1 official involved  
12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 

• 
•  Time spent estimated at 5 to 10 days per year on this activity 
•  Discounting factor not applied – no legislative base for glossaries in Member States currently 
• 
• 
•  Discounting factor not applied – no legislative base for glossaries in Member States currently 
• 
• 
•  Discounting factor not applied – as not a requirement under current situation 
• 
• 
•  Discounting factor not applied – as not a requirement under current situation  

1 official involved  
12 to 24 days per official per year 

1 official involved  
2 to 3 days per official per year 

Option 4:  Introduce the requirement to set up independent fee comparison websites  

Variant A: A single official website within each Member State managed by a competent authority 

Table 6.N:  Ease of comparison and presentation requirements for bank fees – Option 4 Variant A 

Benefit description 

EUR (Millions) 

Calculation basis 

stakeholder 

Benefit  per 
and cost type 
Benefits to consumers 

Cost per stakeholder and 
cost type 
One-off  costs 
institutions 
Time-based costs 

to  credit 

Cost description  

Management time spent on 
reviewing product/ pricing 
strategy 

Range in Euro 
(Millions) 
1.68 

Benefit accrued from changes in 
switching behaviour  

731.08 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-

Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU 

• 
• 
2022: a constant +0.25%. Amounts are expressed on a cumulative basis. 
• 
yearly average cost of a bank account between 2013 and 2022 
Calculation basis  

0.5 days per person – one half day meeting to determine new pricing strategy 

3 members of management team per credit institution 

• 
• 
• 
•  Discount factor – distance from policy frontier = 0.51 

It is assumed that management wages are higher than average industry wages by 20% 

EN 

249 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Setting up internal process 

12.07 – 20.13 

1.68 

•  Unit cost =  EUR 3 000 to  EUR 5 000 per credit institution 
•  Discount factor – distance from policy frontier = 0.51 

One-off  costs 
institutions 
Acquisition costs 

to  Credit 

Recurring  costs  to  Credit 
institutions 
Time-based costs 

Submitting price data to website 
operator 

12.07 – 20.13 
49.36 – 98.72 

49.36 – 98.72 
0.74  – 2.83 

One-off  costs 
authorities 
Time-based costs 

to  public 

Website development (includes 
both time-based and acquisition 
costs) 

Transposing EU legislation into 
national law 

0.02– 0.03 

Recurring  costs  to  public 
authorities 
Time-based costs 

Website running 
(includes both time-based and 
acquisition costs) 
Website feedback and evaluation 

0.76 – 2.86 
7.21-7.34 

0.17-0.34 

Monitoring compliance 

0.16-0.33 

Reporting to EU 

0.05-0.08 

Enforcement costs  

0.33-0.66 

1 person per bank 

• 
• 
•  Discount factor – distance from policy frontier = 0.51 

6 to 12 days per year 

2 officials are involved 

• 
•  Each official spends 15 to 20 days on this activity 
•  Discount factor: Distance from the policy frontier  = 0.51 
•  Unit cost of creating a website: EUR 50 000 – EUR 200 000  
• 
•  Time spent estimated at 5 to 10 days on this activity 
•  Discount factor not applied as there is no current legislative basis in Member States 

1 official involved  

2 FTE officials are involved 

• 
•  Discount factor: Distance from the policy frontier  = 0.51 
•  EUR 1 000 – EUR 2 000 for server hosting, software upgrades and IT consumables 

• 

1 official per Member State to analyse feedback provided by users, conduct user surveys, review feedback and develop recommendations 

for improvement 

12 to 24 days per year 

1 official involved  
6 to 12 days per official per year  

• 
•  Discount factor: Distance from the policy frontier  = 0.51 
• 
• 
•  Discounting factor not applied – no legislative base for price comparison site in Member States currently 
• 
• 
•  Discounting factor not applied – as not a requirement under current situation 
• 
• 
•  Discounting factor not applied – as not a requirement under current situation  

1 official involved  
12 to 24 days per official per year 

1 official involved  
2 to 3 days per official per year 

Recurring  costs  to  public 
authorities 
Acquisition costs 

Promoting websites through 
information campaigns 

7.93 – 8.74 
6.11-12.21 

6.11-12.21 

•  Each MS spends EUR 50 000 – EUR 100 000 on promotional activities/ information campaigns per year 
•  Discount factor: Distance from the policy frontier  = 0.51 

Table 6.O: Ease of comparison and presentation requirements for bank fees – Option 4 Variant B 

Option 4:  Comparison sites licensed under an accreditation scheme  
Variant B: Comparison websites licensed under an accreditation scheme 
Benefit per stakeholder 

Benefit description 

Euro (Millions) 

EN 

Calculation basis 

250 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and cost type 
Benefits to consumers 

Benefit accrued from changes in 
switching behaviour  

731.08 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 

• 
•  The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 

• 

constant +0.25%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 
cost of a bank account between 2013 and 2022 

Cost per stakeholder and 
cost type 

Cost description  

Range in Euro 
(Millions) 

Calculation basis  

One-Off costs to Website 
operators 

Acquisition costs 

Cost of obtaining accreditation 

0.05- 0.11 

Initial investments to meet 
requirements of accreditation 
system e.g. setting up a 
complaints handling mechanism 
ting up internal process 

Recurring costs to Website 
operators 

Meeting requirements - annual 
audit 

Acquisition costs 

One-Off costs to public 
authorities 

Time-based costs 

Setting up an accreditation 
system 
 (includes both time-based and 
acquisition costs) 

Recurring costs to public 
authorities 

Quarterly audits 

Time-based costs 

Regular monitoring of sites 

0.66 – 1.32 

1.10 – 1.98 

0.27-  0.54 

0.32 – 0.65 

4.77-9.53 

4.77-9.53 

0.36 - 0.66 

0.36 - 0.66 

0.44- 0.66 

•  Assumed 2 websites per MS on average 
•  Each website operator will incur EUR 1 000 – EUR 2 000 on obtaining accreditation per year 
•  No Discount factor applied. 
•  Each website operator will spend EUR 5 000 – EUR 10 000 
•  No Discount factor applied. 

•  Each website operator will incur EUR 10 000 – EUR 20 000 
•  No Discount factor applied. 

 2 officials involved  

• 
•  Each official will spend 15 to 20 days on this activity  
•  No Discount factor applied. 
•  Each MS incurs acquisition costs of EUR 10 000 – EUR 20 000 

•  1 official involved  
•  Each official will spend 16 to 24 days on this activity  
•  No Discount factor applied. 
•  1 official involved  
•  Each official will spend 24 to 48 days on this activity 
•  No Discount factor applied. 

EN 

251 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring costs to public 
authorities 

Acquisition costs 

Awareness raising campaigns  

2.38 -  4.76 

• 
• 

Each MS spends EUR 10 000 – EUR 20 000 on promotional activities/ information campaigns per year 
No Discount factor applied. 

2.38 – 4.76 

Option 5:  Introduce the requirement to provide representative examples   

Variant A: Banks set up own representative examples 

Table 6.P: Ease of comparison and presentation requirements for bank fees – Option 5 Variant A 

Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

Euro (Millions) 

Calculation basis 

Benefit accrued from changes in 
switching behaviour  

146.22 

•  Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
•  The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 

Cost per stakeholder and 
cost type 
One-off costs to credit 
institutions 

Time-based costs 

Cost description  

Internal communication and 
training 

Range in Euro 
(Millions) 
24.88 –43.54 

Developing compliant 
representative examples 

Time spent by the legal 
department to familiarise with 
legislation  

Management time spent 
reviewing product and pricing 
strategy 

Time spent by legal department 
to adapt contractual 
documentation 

2.69 – 4.04 

0.67 – 1.35 

2.43 

0.91 – 1.82 

31.58 – 53.17 

constant +0,05%. Amounts are expressed on a cumulative basis. 

•  Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly 

average cost of a bank account between 2013 and 2022. 

Calculation basis  

0.3 to 0.5 days per person  

• 
•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is assumed 

to be 20% of industry workforce 

•  Discount factor – distance from policy frontier = 0.74 

1 staff member per bank  would be involved in this exercise 

• 
•  They will devote 2 to 3 days each 
•  Discount factor – distance from policy frontier = 0.74 

1 staff member per bank  would be involved in this exercise 

• 
•  S/he will devote 0.5 to 1 day each 
•  Discount factor – distance from policy frontier = 0.74  

0.5 days per person – one half day meeting to determine new pricing strategy 

3 members of management team per credit institution  

• 
• 
• 
•  Discount factor – distance from policy frontier = 0.74  

It is assumed that management wages are higher than average industry wages by 20% 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts  

0.5 to 1 day per person 

One-off costs to Credit 

Cost of adapting marketing/ 

174.52 – 290.87 

•  Unit cost per credit institution = range of EUR 30 000 – 50 000  

EN 

252 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
institutions 

Acquisition costs 

advertising promotional material 
Cost of updating/adapting IT 
applications to generate 
representative examples 
Updating websites with 
representative examples 

Recurring costs to Credit 
institutions 
Time-based costs 

Additional staff costs generated 
by new compliance requirements 
Updating representative 
examples 

58.17 – 116.35 

1.16 – 2.91 

233.86 – 410.13 

299.61 

16.05 - 32.11 

Recurring reporting 
requirements 

8.03 - 16.05 

•  Discount factor – distance from policy frontier = 0.74 
•  Unit cost per credit institution = range of EUR 10 000 – 20 000  
•  Discount factor – distance from policy frontier = 0.74 

Individual cost per credit institution ranging between EUR 200 - 500  

• 
•  Discount factor: Distance from the policy frontier = 0.74 

• 
• 

10% of 1 Full Time Equivalent per credit institution per annum 
 Discount factor: Distance from the policy frontier = 0.74  

1 member of the legal  team per bank  

• 
• 
•  Discounting factor not applied as representative examples not typically provided by banks  

1 to 2 days per person 

1 official per bank  

• 
• 
•  Discounting factor not applied as representative examples not typically provided by banks 

0.5 to 1 days per year 

One-off costs to public 
authorities 

Transposing EU legislation into 
national law 

Time-based costs 

Recurring costs to public 
authorities 

Time-based costs 

323.68 – 347.76 

0.02 – 0.03 

0.02 – 0.03 

1 official involved  

• 
•  Time spent estimated at 5 to 10 days on this activity 
•  Discount factor not applied 

Monitoring compliance 

0.33 - 0.66 

Reporting to EU 

0.05 - 0.08 

Enforcement costs e.g. sweeps, 
investigations 

0.33 - 0.66 

0.71 – 1.40 

1 official involved  
12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 

• 
• 
•  Discount factor not applied  
• 
1 official involved  
• 
2 to 3 days per official per year 
•  Discounting factor not applied  
• 
• 
•  Discounting factor not applied 

1 official involved  
12 to 24 days per year 

Option 5:  Introduce the requirement to provide representative examples   

Variant B: Member States prescribe representative examples 

Table 6.Q:  Ease of comparison and presentation requirements for bank fees – Option 5 Variant B 

Benefit per stakeholder 
and cost type 
Benefits to consumers 

EN 

Benefit description 

Euro (Millions) 

Calculation basis 

Benefit accrued from changes in 

146.22 

• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 

253 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
switching behaviour  

Cost per stakeholder and 
cost type 
One-off costs to credit 
institutions 
Time-based costs 

Cost description  

Internal communication and 
training 

Range in Euro 
(Millions) 
27.82–48.68 

•  The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 

• 

constant +0.05%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 
cost of a bank account between 2013 and 2022 

Calculation basis  

0.3 to 0.5 days per person 

• 
•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is assumed to 

Industry inputs to develop a 
standard usage profile 

Developing compliant 
representative examples 

Time spent by the legal 
department to familiarise with 
legislation  

Management time spent 
reviewing product and pricing 
strategy 

3.01 – 4.52 

3.01 – 4.52 

0.75 – 1.51 

2.71 

Time spent by legal department 
to adapt contractual 
documentation 

0.91 – 1.82 

be 20% of industry workforce 

•  Discount factor applied – distance from policy frontier = 0.83 

1 staff member per bank  would be involved in this exercise 

• 
•  S/he will devote 2 to 3 days to this exercise 
•  Discount factor applied – distance from policy frontier = 0.83 

1 staff members per bank  would be involved in this exercise 

• 
•  They will devote 2 to 3 days each 
•  Discount factor applied – distance from policy frontier = 0.83 

1 staff member per bank  would be involved in this exercise 

• 
•  S/he will devote 0.5 to 1 day each 
•  Discount factor applied – distance from policy frontier = 0.83  

0.5 days per person – one half day meeting to determine new pricing strategy 

3 members of management team per credit institution  

• 
• 
• 
•  Discount factor applied – distance from policy frontier = 0.83  

It is assumed that management wages are higher than average industry wages by 20% 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts  

0.5 to 1 day per person 

One-off costs to Credit 
institutions 

Cost of adapting marketing/ 
advertising promotional material 

38.22- 63.76 

195.14 – 325.24 

•  Unit cost per credit institution = range of EUR 30 000 – 50 000  
•  Discount factor applied– distance from policy frontier = 0.83 

Acquisition costs 

Cost of updating/adapting IT 
applications to generate 
representative examples 
Updating websites with 
representative examples 

65.05 – 130.09 

•  Unit cost per credit institution = range of EUR 10 000 – 20 000  
•  Discount factor applied – distance from policy frontier = 0.83 

1.30 – 3.25 

Individual cost per credit institution ranging between EUR 200 - 500  

• 
•  Discount factor applied: Distance from the policy frontier  = 0.83 

Recurring costs to Credit 
institutions 

Additional staff costs generated 
by new compliance requirements 

261.49 – 458.58 
335 

Industry inputs to (assumed) 

6.65-13.29 

10% of 1 Full Time Equivalent per credit institution per annum 

• 
•  Discount factor applied: Distance from the policy frontier  = 0.83 
• 
1 staff member per bank  would be involved in this exercise 

EN 

254 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time-based costs 

annual revision of standard 
usage profile 
Updating representative 
examples 

Recurring reporting 
requirements 

One-off costs to public 
authorities 

Developing standard usage 
profiles 

Time-based costs 

Transposing EU legislation into 
national law 

Recurring costs to public 
authorities 

Revising standard usage profiles 

13.29 - 26.60 

8.03 – 16.05 

362.97 – 390.94 
0.06 – 0.09 

0.02 – 0.03 

0.08 – 0.12 
0.23-0.45 

Time-based costs 

Monitoring compliance 

0.33 – 0.66 

Reporting to EU 

0.05 -0.08 

Enforcement costs e.g. sweeps, 
investigations 

0.33-0.66 

0.94 – 1.85 

S/he will devote 0.5 to 1 day per year to this exercise 

• 
•  Discount factor applied: Distance from the policy frontier  = 0.83 

1 member of the legal  team per bank  

• 
• 
• 
• 
• 
•  Discount factor not applied. 

1 to 2 days per person 
Discount factor applied: Distance from the policy frontier  = 0.83 
1 official  
0.5 to  day per year 

2 officials are involved 

• 
•  Each official spends 10 to 15 days of his/her time on this activity 
•  Discounting factor not applied 
• 
•  Time spent estimated at 5 to 10 days on this activity 
•  Discount factor not applied 

1 official involved  

1 official involved  
12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 

2 officials per MS are involved 

• 
•  Each official spends 5 to 10 days of his/her time on this activity 
•  Discount factor applied: Distance from policy frontier = 0.83 
• 
• 
•  Discount factor not applied  
• 
1 official involved  
• 
2 to 3 days per official per year 
•  Discounting factor not applied  
• 
• 
•  Discounting factor not applied 

1 official involved  
12 to 24 days per year 

Option 6:  Set up the requirement to provide cost simulations to prospective clients  

Variant A: Banks set up own customer profiles 

Table 6.R:  Ease of comparison and presentation requirements for bank fees – Option 6 Variant A 

Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

Euro (Millions) 

Calculation basis 

Benefit accrued from changes in 
switching behaviour  

219.32 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 

• 
•  The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 

• 

constant +0.075%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly 
average cost of a bank account between 2013 and 2022 

Cost per stakeholder and 
cost type 
One-off costs to credit 

Cost description  

Internal communication and 

Range in Euro 
(Millions) 
52.36 –104.71 

Calculation basis  

• 

0.5 to 1 days per person 

EN 

255 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
institutions 

training 

Time-based costs 

•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is 

assumed to be 20% of industry workforce 

•  Discount factor applied – distance from policy frontier = 0.89  

Time spent by the legal 
department to familiarise with 
legislation  

Management time spent 
reviewing product and pricing 
strategy 

Time spent by legal department 
to adapt contractual 
documentation 

Cost of adapting marketing/ 
advertising promotional material 
Cost of updating/adapting IT 
applications to generate cost 
simulations 
Updating websites with cost 
simulations 

One-off costs to Credit 
institutions 

Acquisition costs 

Recurring costs to Credit 
institutions 

Time-based costs 

Additional staff costs generated 
by new compliance requirements 
Cost of longer customer 
interactions 

Recurring reporting 
requirements 

One-off costs to public 
authorities 

Transposing EU legislation into 
national law 

0.81 – 1.62 

2.92 

0.91 – 1.82 

56.99 – 111.07 

209.87 – 349.78  

139.91 – 209.87  

13.99 – 20.99 

363.78 – 580.64 

360.29 

2 204.17 – 3 306.25 

8.03 -16.05 

2 572.48 – 3 682.59 

0.02–0.03 

Time-based costs 
Recurring costs to public 
authorities 

Time-based costs 

Monitoring compliance 

0.33 – 0.66 

Reporting to EU 

0.05-0.08 

1 staff member per bank  would be involved in this exercise 

• 
• 
•  Discount factor applied – distance from policy frontier = 0.89  

0.5 to 1 day per person 

0.5 day per person 

3 members of management team per credit institution  

• 
• 
• 
•  Discount factor – distance from policy frontier = 0.89  

It is assumed that management wages are higher than average industry wages by 20% 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts  

0.5 to 1 day per person 

•  Unit cost per credit institution = range of EUR 30 000 – 50 000  
•  Discount factor – distance from policy frontier = 0.89 
•  Unit cost per credit institution = range of EUR 20 000 – 30 000  
•  Discount factor – distance from policy frontier = 0.89 

Individual cost per credit institution ranging between EUR 2 000 – 3 000   

• 
•  Discount factor: Distance from the policy frontier  = 0.89 

10% of 1 Full Time Equivalent per credit institution per annum 

• 
•  Discount factor applied – distance from policy frontier = 0.89 

2 to 4 days extra per customer service staff (estimated as 20% of total industry workforce) 

• 
•  Discount factor applied – distance from policy frontier = 0.89 
• 
1 staff member per bank 
• 
0.5 to 1 day per year 
•  Discount factor not applied. 

1 official involved  

• 
•  Time spent estimated at 5 to 10 days on this activity 
•  Discount factor not applied 

1 official involved  
12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 

• 
• 
•  Discount factor not applied  
• 
• 

1 official involved  
2 to 3 days per official per year 

EN 

256 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Enforcement costs e.g. sweeps, 
investigations 

0.33-0.66 

0.71 – 1.40 

•  Discounting factor not applied  
• 
• 
•  Discounting factor not applied 

1 official involved  
12 to 24 days per year 

Option 6:  Set up the requirement to provide cost simulations to prospective clients  

Variant B: Member States prescribe representative examples 

Table 6.S:  Ease of comparison and presentation requirements for bank fees – Option 6 Variant B 

Benefit per stakeholder 
and cost type 
Benefits to consumers 

Cost per stakeholder 
and cost type 
One-off costs to credit 
institutions 

Time-based costs 

Benefit description 

Euro (Millions) 

Calculation basis 

Benefit accrued from changes in 
switching behaviour  

219.32 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The  impact  on  consumer  switching  behaviour  is  assumed  as  follows:  2013:  +0%  of  total  number  of  bank  account  holders;  2014-2022:  a 

constant +0.075%. Amounts are expressed on a cumulative basis. 

Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 

Cost description  

Internal communication and 
training 

Range in Euro 
(Millions) 
56.95 –113.90 

Industry inputs to develop a 
standard usage profile 

Time spent by the legal 
department to familiarise with 
legislation 

Management time spent 
reviewing product and pricing 
strategy 

Time spent by legal department 
to adapt contractual 
documentation 

3.52 – 5.29 

0.88 – 1.76 

3.17 

0.91 – 1.82 

cost of a bank account between 2013 and 2022 

Calculation basis  

0.5 to 1 day per person 

• 
•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is 

assumed to be 20% of industry workforce 

•  Discount factor – distance from policy frontier = 0.97 

1 staff member per bank  would be involved in this exercise 

• 
•  S/he will devote 2 to 3 days to this exercise 
•  Discount factor – distance from policy frontier = 0.97 

1 staff member per bank  would be involved in this exercise 

• 
•  S/he will devote  0.5 to 1 day  
•  Discount factor – distance from policy frontier = 0.97  

0.5 days per person  

3 members of management team per credit institution  

• 
• 
• 
•  Discount factor – distance from policy frontier = 0.97  

It is assumed that management wages are higher than average industry wages by 20% 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts  

0.5 to 1 day per person 

One-off costs to Credit 
institutions 

Cost of adapting marketing/ 
advertising promotional material 
Cost of updating/adapting IT 

65.44 – 125.94 

228.28 – 380.47 

152.19 – 228.28 

Unit cost per credit institution = range of EUR 30 000 – 50 000  
Discount factor – distance from policy frontier = 0.97 
Unit cost per credit institution = range of EUR 20 000 – 30 000  

EN 

257 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition costs 

applications to generate cost 
simulations 
Updating websites with cost 
simulations 

Recurring costs to Credit 
institutions 

Time-based costs 

Additional staff costs generated 
by new compliance requirements 
Cost of longer customer 
interactions 

Recurring reporting 
requirements 

One-off costs to public 
authorities 

Developing standard usage 
profiles 

Time-based costs 

Transposing EU legislation into 
national law 

Recurring costs to public 
authorities 

Revising standard usage profiles 

15.22 – 22.83 

395.68 – 631.57 
391.89 

2 397.51 – 3 596.27 

32.11-48.16 

2 821.51 – 4 036.32 

0.06 – 0.09 

0.02 – 0.03 

0.08 – 0.12 
0.27-0.55 

Time-based costs 

Monitoring compliance 

0.33 – 0.66 

Reporting to EU 

0.05 – 0.08 

Enforcement  costs  e.g.  sweeps, 
investigations 

0.33 – 0.66 

0.99 – 1.95 

Discount factor – distance from policy frontier = 0.97 

Individual cost per credit institution ranging between EUR 2 000 – 3 000  
Discount factor: Distance from the policy frontier  = 0.97 

10% of 1 Full Time Equivalent per credit institution per annum 
Discount factor: Distance from the policy frontier  = 0.97 

2 to 4 days extra per customer service staff (estimated as 20% of total industry workforce) 

• 
•  Discount factor: Distance from the policy frontier  = 0.97 
1 staff member per bank 
2-3 days per year 
Discount factor not applied. 

2 officials are involved 
Each official spends 10 to 15 days of his/her time on this activity 
Discounting factor not applied 
1 official involved  
Time spent estimated at 5 to 10 days on this activity 
Discount factor not applied 

2 officials per MS are involved 
Each official spends 5 to 10 days of his/her time on this activity 
Discounting factor not applied 
1 official involved  
12 to 24 days year to monitor compliance (e.g. scanning websites of banks) 
•  Discount factor not applied  
1 official involved  
2 to 3 days per official per year 
Discounting factor not applied  
1 official involved  
12 to 24 days per year 
Discounting factor not applied 

Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

Euro (Millions) 

Calculation basis 

Table 6.T:  Introduce EU standardised forms for the provision of ex-ante information on fees (price lists) – Option 7 

Benefit accrued from changes in 
switching behaviour  

438.65 

• 
• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 
constant +0,15%. Amounts are expressed on a cumulative basis. 

Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average cost 

Cost per stakeholder and 
cost type 
One-off costs to credit 

Cost description  

Internal communication and 

Range in Euro 
(Millions) 
33.60 –58.79 

of a bank account between 2013 and 2022 

Calculation basis  

• 

0.3 to 0.5 per person 

EN 

258 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
institutions 

training 

•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is assumed to 

Time-based costs 

Industry inputs to develop an EU 
standard form 

Time spent by the legal 
department to familiarise with 
legislation  

Management time spent 
reviewing product and pricing 
strategy 

0.66 – 1.0 

0.41 – 0.83 

1.49 

Time spent by legal department 
to adapt contractual 
documentation 

0.91 – 1.82 

be 20% of industry workforce 

2 staff member per credit institution  would be involved in this exercise 

• 
•  S/he will devote 2 to 3 days to this exercise 
•  Discount factor – distance from policy frontier = 0.46 

1 staff member per credit institution  would be involved in this exercise 

• 
•  S/he will devote 0.5 to 1 day each 
•  Discount factor – distance from policy frontier = 0.46  

0.5 days per person  

3 members of management team per credit institution  

• 
• 
• 
•  Discount factor – distance from policy frontier = 0.46 

It is assumed that management wages are higher than average industry wages by 20% 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts to include references to the standard price list which would now 

1.5 to 1 day per person 

One-off costs to Credit 
institutions 

Cost of adapting marketing/ 
advertising promotional material 

Acquisition costs 

Cost of updating/adapting IT 
applications to generate cost 
simulations 
Updating websites with new 
pricing information 

Recurring costs to Credit 
institutions 

Additional staff costs generated 
by new compliance requirements 

Time-based costs 

Recurring reporting 
requirements 

37.07 – 63.92 

107.53 – 179.19 

have a specific name under national law  

Unit cost per credit institution = range of EUR 30 000 – 50 000  
Discount factor – distance from policy frontier = 0.46 

3.58 – 7.17 

Unit cost per credit institution = range of EUR 1 000 – 2 000  
Discount factor – distance from policy frontier = 0.46 

0.72 – 1.79  

111.82 – 188.15 

184.57 

8.03-16.05 

192.59 – 200.62 

Individual cost per credit institution ranging between UR 200 - 500  
Discount factor: Distance from the policy frontier = 0.35 

10% of 1 Full Time Equivalent per credit institution per annum 
Discount factor: Distance from the policy frontier = 0.35 

1 staff member per bank 
0.5 to 1 day per year 
Discount factor not applied. 

Recurring costs to Credit 
institutions 

Acquisition costs 

Printing costs – price lists 

32.30 - 96.89 

Unit cost = EUR 0.10 to 0.30 per print out 
Lists are made available in hard copy format to 10% of customers 
Discounting factor not applied as new price lists would need to be printed in accordance with standard format and a given name 

One-off costs to public 

Transposing EU legislation into 

0.01 – 0.02 

1 official involved  

32.30 - 96.89 

EN 

259 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
authorities 

national law 

Time spent estimated at 10 to 15 days on this activity 
Discount factor: Distance from the policy frontier  = 0.46 

Time-based costs 

Recurring costs to public 
authorities 

Time-based costs 
Recurring costs to public 
authorities 

Time-based costs 

Benefit per stakeholder 
and cost type 
Benefits to consumers 

Monitoring compliance 

0.01 – 0.02 
0.15 - 0.3 

1 official involved  
12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 
Discount factor: Distance from the policy frontier  = 0.46 

Reporting to EU 

0.03 - 0.04 

Enforcement costs e.g. sweeps, 
investigations 

0.15 - 0.3 

0.33 – 0.64 

1 official involved  
2 to 3 days per official per year 
Discount factor: Distance from the policy frontier  = 0.46 
1 official involved  
12 to 24 days per year 
Discount factor: Distance from the policy frontier  = 0.46 

Benefit description 

Euro (Millions) 

Calculation basis 

Table 6.U: Introduce an obligation for banks to provide ex-post information on the fees incurred - Option 8 

Benefit accrued from changes in 
switching behaviour  

1 462.16 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a constant 

Benefits accrued from better 
account management 

+0.5%. Amounts are expressed on a cumulative basis. 

Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average cost 

of a bank account between 2013 and 2022 

No  discount  factor  used  as  changes  to  potential  switching  rates  are  incremental  in  nature  and  therefore  already  take  account  of  the  current 

situation in Member States 

2 702.57 

Net present value ('NPV') of estimated incremental cost savings accrued to consumers through better account management from 2013 to 2022, 

discounted at 4%. 

The impact on consumer switching behaviour is assumed as follows: 2013-2015: +10% of total number of bank account holders; and 30% from 

2016-2022. Percentage savings figures represent an estimate of cumulative savings. 

Savings are calculated based on the assumption that consumers would accrue cost savings equal to a constant 15% of an EU yearly average cost 

Cost per stakeholder and 
cost type 
One-off costs to credit 
institutions 

Time-based costs 

Cost description  

Internal communication and 
training 

Input into the process of 
determining a list of most 
relevant fees 
Time spent by the legal 
department to familiarise with 
legislation  
Management time spent 
reviewing product and pricing 

4 164.73 
Range in Euro 
(Millions) 
11.65- 20.39 

0.76 - 1.26 

0.32 – 0.63 

1.14 

of a bank account between 2013 and 2022 

Discount factor used: 80% 

Calculation basis 

0.3 to 0.5 per person 
All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is assumed to be 

20% of industry workforce 

2 staff members per bank  would be involved in this exercise 
3 to 5 days each 
Discount factor – distance from policy frontier = 0.35 
1 staff member per bank  would be involved in this exercise 
S/he will devote 1.5 to 1 day to this task 
Discount factor – distance from policy frontier = 0.35 
3 members of management team per credit institution  
0.5 days per person  

EN 

260 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
strategy 

Time spent by legal department 
to adapt contractual 
documentation 

0.91 – 1.82 

It is assumed that management wages are higher than average industry wages by 20% 
Discount factor – distance from policy frontier = 0.35 
1 member of the legal  team per bank  
0.5 to 1 day per person 
Discount factor not applied as all banks would have to update contracts to include references to the standard price list which would now have a 

One-off costs to Credit 
institutions 

Acquisition costs 

Cost of updating/adapting IT 
applications to provide standard 
price lists 

Cost of adapting 
marketing/advertising 
promotional material 
Adapting format of account 
statements to include summary 
box or annex 
Updating website with common 
fee terms 

Recurring costs to Credit 
institutions 

Additional staff costs generated 
by new compliance requirements 

Time-based costs 

specific name under national law 

14.77 – 25.24 

81.74 – 136.23  

Unit cost per credit institution = range of EUR 30 000 – 50 000   
Discount factor – distance from policy frontier = 0.35 

81.74-136.23 

Unit cost per credit institution = range of EUR 30 000 – 50 000  
 Discount factor – distance from policy frontier = 0.35 

13.62 – 27.25 

Unit cost per credit institution = range of EUR  5 000  - 10 000  
Discount factor – distance from policy frontier = 0.35 

0.54 – 1.36 

177.65 – 301.07 

140.32 

Unit cost per credit institution = range of EUR 200 – 500   
Discount factor – distance from policy frontier = 0.35 

10% of 1 Full Time Equivalent per credit institution per annum 
Discount factor: Distance from the policy frontier  = 0.35 

Recurring reporting 
requirements 

8.03-16.05 

Recurring costs to Credit 
institutions 

Disseminating fee information to 
consumers in standard form 

112.02-336.07 

Acquisition costs 

One-off costs to public 
authorities 

Transposing EU legislation into 
national law 

Time-based costs 

Identifying and agreeing most 
common fees 

Recurring costs to public 
authorities 

Revising list of common fees 

260.37–492.45 
0.03 – 0.05 

0.04 – 0.06 

0.07 – 0. 11 
0.10-0.19 

Time-based costs 

Monitoring compliance 

0.33-0.66 

1 official involved  
Time spent estimated at 1 days on this activity 
Discount factor not applied 
Unit cost = Euro 0.10 to 0.30 per print out 
Lists are made available in hard copy format to 10% of customers [consider bank account holders] 
Discount factor: Distance from the policy frontier  = 0.35 

1 official involved  
Time spent estimated at 10 to 15 days on this activity 
Discount factor not applied 

2 officials involved  
Time spent estimated at 20 to 30 days on this activity 
Discount factor: Distance from the policy frontier  = 0.35 

2 officials are involved 
Time spent estimated at 5 to 10 days per year on this activity 
Discount factor: Distance from the policy frontier  = 0.35 
1 official involved  
12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 
Discount factor not applied – as not a requirement under current situation 

EN 

261 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit per stakeholder 
and cost type 
Benefits to consumers 

Reporting to EU 

0.05-0.08 

Enforcement costs e.g. sweeps, 
investigations 

0.33-0.66 

0.81–1.59 

1 official involved  
2 to 3 days per official per year 
Discounting factor not applied – as not a requirement under current situation 
1 official involved  
12 to 24 days per year to monitor compliance (e.g. scanning websites of banks) 
Discount factor not applied – as not a requirement under current situation 

Benefit description 

Euro (Millions) 

Calculation basis 

Table 6.V: Introduce EU standardised forms for the provision of ex-post information on fees - Option 9 

Benefit accrued from changes in 
switching behaviour  

292.43 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 

• 
•  The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-

• 

2022: a constant +0,1%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly 
average cost of a bank account between 2013 and 2022 

•  No discount factor used as changes to potential switching rates are incremental in nature and therefore already take account of the 

current situation in Member States. 

Benefits accrued from better 
account management 

954.68 

•  Net present value ('NPV') of estimated incremental cost savings accrued to consumers through better account management from 

2013 to 2022, discounted at 4%. 

•  The impact on consumer switching behaviour is assumed as follows: 2013-2015: +2% of total number of bank account holders; 

• 

2016-2022: +5% of total number of bank account holders. Percentage savings figures represent an estimate of cumulative savings. 
Savings are calculated based on the assumption that consumers would accrue cost savings equal to a constant 15% of an EU yearly 
average cost of a bank account between 2013 and 2022 

Cost per stakeholder and 
cost type 
One-off costs to credit 
institutions 

Time-based costs 

Cost description  

Internal communication and 
training 

1 247.11 
Range from – to in 
Euro (Millions) 
26.77 – 46.84 

•  Discount factor used: 80% 

Calculation basis  

0.3 to 0.5 per person 

• 
•  All front office/ marketing employees will have to spend some time on familiarising themselves with new requirements – this is 

assumed to be 20% of industry workforce 

•  Discount factor – distance from policy frontier = 0,80 

Industry inputs to develop an EU 
standard form 

1.74 – 2.90 

Time spent by the legal 
department to familiarise with 
legislation  

0.72 – 1.45 

Management time spent reviewing 
product and pricing strategy 

2.61 

2 staff member per credit institution  would be involved in this exercise 

• 
•  S/he will devote 3 to 5 days to this exercise 
• 
•  Discount factor – distance from policy frontier = 0,80 

20% of credit institutions involved 

1 staff member per bank  would be involved in this exercise 

• 
•  S/he will devote 0.5 to 1 day  
•  Discount factor – distance from policy frontier = 0,80 

• 
• 
• 

3 members of management team per credit institution  

0.5 days per person  

It is assumed that management wages are higher than average industry wages by 20% 

EN 

262 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
Time spent by legal department to 
adapt contractual documentation 

0.91 – 1.82 

One-off costs to Credit 
institutions 

Acquisition costs 

Cost of updating/adapting IT 
applications enable filtering of 
transactions, generate summary 
charges etc. 

Recurring costs to Credit 
institutions 

Time-based costs 

Additional staff costs generated by 
new compliance requirements 
Recurring reporting requirements 

Recurring costs to Credit 
institutions 

Disseminating fee information to 
consumers in standard EU form - 
assumed annually 

Acquisition costs 

One-off costs to public 
authorities 

Transposing EU legislation into 
national law 

Time-based costs 

Recurring costs to public 
authorities 

Monitoring compliance 

Time-based costs 

Reporting to EU 

Enforcement costs e.g. sweeps, 
investigations 

32.75-55.62 

312.96 - 625.93  

312.96 – 625.93 

322.36 

8.03-16.05 

330.39-338.41 

257.35-772.06 

257.35-772.06 

0.03 – 0.05 

0.03 – 0.05 

0.33-0.66 

0.05-0.08 

0.33-0.66 

0.71-1.40 

•  Discount factor – distance from policy frontier = 0,80 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts to include references to the standard price list which would 

0.5 to 1 day per person 

now have a specific name under national law 

•  Unit cost per credit institution = range of EUR 50 000 – 100 000  
•  Discount factor – distance from policy frontier = 0.80 

10% of 1 Full Time Equivalent per credit institution per annum 

• 
•  Discount factor: Distance from the policy frontier  = 0.80 
• 
• 
• 

Time spent estimated at 0.5 to  1 days on this activity 
Discount factor not applied 

1 official involved  

•  Unit cost = Euro 0.10 to 0.30 per print out 
• 
•  Discount factor: Distance from the policy frontier  = 0.80 

Lists are made available in hard copy format to 10% of customers [consider bank account holders] 

1 official involved  

• 
•  Time spent estimated at 10 to 15 days on this activity 
•  Discount factor not applied 

2 officials are involved 

1 official involved  
2 to 3 days per official per month to monitor compliance (e.g. scanning websites of banks) 

• 
•  Time spent estimated at 12 to 24 days per year on this activity 
•  Discount factor not applied 
• 
• 
•  Discount factor not applied 
• 
• 
•  Discounting factor not applied – as not a requirement under current situation 

1 official involved  
12 to 24 days per year 

Payment account switching   

Option 2: Ensure that the switching services follow the Common Principles on bank account switching 

EN 

Table 6.W 

263 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit description 

Euro (Millions) 

Calculation basis 

A: existing Common Principles 

1 462.16 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 

• 
•  The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 

• 

constant +0.50%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 
cost of a bank account between 2013 and 2022 

Benefit per stakeholder 
and cost type 
Benefit accrued from 
changes in switching 
behaviour  

Cost per stakeholder and 
cost type 
One-Off costs to credit 
institutions 

Time-based costs 

One-Off costs to Credit 
institutions 

Acquisition costs 

Time spent by legal department 
to familiarise with new 
legislative requirements 

Cost of adapting business 
processes to facilitate switching 
in compliance with CP 

Initial staff training on 
switching process and dealing 
with customer enquiries 

Cost of adapting IT systems to 
facilitate switching in 
compliance with CP 
Updating website to include 
information on switching 
process 

Recurring costs to Credit 
institutions 

Staff time involved in 
implementing switching 

Time-based costs 

One-Off costs to public 
authorities 

Time-based costs 

Recurring costs to public 
authorities 

Time-based costs 

Cost of internal compliance - 
additional staff costs of 
compliance department 
Submitting compliance 
statement to regulatory body 

Transposing EU legislation into 
national law - developing 
legislation  
Awareness raising campaigns 

Monitoring compliance, 
Reporting and enforcement 
costs 

EN 

Range in Euro 
(Millions) 
0.14 – 0.28 

1.39- 1.95 

9- 18 

6.01- 12.03 

0.24- 0.60 

18-36 

7 

0.9-1.8 

Calculation basis 

They will devote 0.5 to 1 day per institution 
Daily average labour rate for credit institutions calculated as = EUR 232 
The number of credit institutions = 7 855  
Applied weighting factor =  0.15 
1 staff members per bank  would be involved in this exercise 
They will devote 5 to 7 days each 
The number of credit institutions = 7 855  
Applied weighting factor =  0.15 

•  They will devote 0.5  to 1 day per staff directly dealing with customers (20% of total staff of credit institutions) 
•  Applied weighting factor =  0.15 

Unit cost per credit institution = range of Euro 5 000 – 10 000  
The number of credit institutions = 7.855 
Applied weighting factor =  0.15 
Unit cost per credit institution = range of Euro 200 - 500 
Applied to all credit institutions = 7 855 
Applied weighting factor =  0.15 

Staff dealing directly with consumers will devote additional 1 to 2 days a year 
Daily average labour rate for credit institutions calculated as = EUR 232 
Applied weighting factor =  0.15 
Yearly costs of 0.1 staff per credit institution 
Daily average labour rate for credit institutions calculated as = EUR 232, year assumed to have 252 working days 
Applied weighting factor =  0.15 

•  They will devote 0.5 to 1 day staff cost per credit institution 

1.26 

Assumes 1500 hours' work at average wage rate (EUR 31.5) per Member State 

1.89 

2.13 

Average cost per Member States is assumed to be EUR 70.000 

Assumes 2500 hours' work at average wage rate (EUR 31.5) per Member State 

Table 6.X 

264 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Option 3A: Add provisions to improve the existing Common Principles on bank account switching at domestic level  
Benefit per stakeholder 
and cost type 

Benefit description 

Calculation basis 

Euro (Millions) 

Benefit accrued from changes 
in switching behaviour  

1 679.50 

• 
• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 
constant +0,75%. Amounts are expressed on a cumulative basis. 

Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average cost of 

Cost per stakeholder and 
cost type 
One-Off costs to credit 
institutions 

Time-based costs 

One-Off costs to Credit 
institutions 

Acquisition costs 

Cost description  

Time spent by legal department 
to familiarise with new 
legislative requirements  

Cost of adapting business 
processes to facilitate switching 
in compliance with the 
enhanced CP 
Initial staff training on 
switching process and dealing 
with customer enquiries 

Updating website to include 
information on switching 
process 

Cost of adapting IT systems to 
facilitate switching in 
compliance with this option 

Recurring costs to Credit 
institutions 

Staff time involved in 
implementing switching 

Time-based costs 

One-Off costs to public 
authorities 

Time-based costs 

Recurring costs to public 
authorities 

Cost of internal compliance - 
additional staff costs of 
compliance department 
Submitting compliance 
statement to regulatory body 

Transposing EU legislation into 
national law - developing 
legislation  
Awareness raising campaigns 

Monitoring compliance, 
Reporting and enforcement 
costs 

Range in Euro 
(Millions) 
0.31- 0.62 

3.1- 4.34 

20.02-40.05 

0.53- 1.34 

13.38- 26.75 

80.1-120.1 

15.6 

0.9-1.8 

a bank account between 2013 and 2022 

Calculation basis 

They will devote 0.5 to 1 day per institution 
Daily average labour rate for credit institutions calculated as = EUR 232 
The number of credit institutions = 7 855  
Applied weighting factor = 0.35 
1 staff members per bank  would be involved in this exercise 
Time devoted will be 5 to 7 days  
The number of credit institutions = 7 855  
Applied weighting factor = 0.35 

• 
• 

They will devote 0.5  to 1 day per staff directly dealing with customers (20% of total staff of credit institutions) 

Applied weighting factor = 0.35 

Unit cost per credit institution = range of Euro 200 - 500  
Number of credit institutions = 7 855  
Applied weighting factor = 0.35 

Unit cost per credit institution = range of EUR 5 000 – 10 000  
Number of credit institutions = 7 855  
Applied weighting factor = 0.35 

Staff dealing directly with consumers will devote additional 2 to 3 days a year 
Daily average labour rate for credit institutions calculated as = EUR 232 
Applied weighting factor =  0.35 
Yearly costs of 0.1 staff per credit institution 
Daily average labour rate for credit institutions calculated as = EUR 232, year assumed to have 252 working days 
Applied weighting factor =  0.35 

•  They will devote 0.5 to 1 day staff cost per credit institution 
•  Daily average labour rate for credit institutions calculated as = EUR 232, year assumed to have 252 working days 

1.26 

Assumes 1500 hours' work at average wage rate (EUR 31.5) per Member State 

1.89 

2.13 

Average cost per Member States is assumed to be EUR 70 000 

Assumes 2500 hours' work at average wage rate (EUR 31.5) per Member State 

EN 

265 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time-based costs 

Table 6.Y 

Option 3B: Broaden the scope of the improved Common Principles to EU-wide cross-border switching 
Calculation basis 
Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

EUR (Millions) 

 3 655.41 

Benefit accrued from changes 
in switching behaviour  

• 
• 

• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 
constant +1%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 
cost of a bank account between 2013 and 2022 

Cost per stakeholder and 
cost type 
One-Off costs to credit 
institutions 

Time-based costs 

Cost description  

Time spent by legal department 
to familiarise with new 
legislative requirements  

Range in EUR 
(Millions) 

0.52- 1.05 

Cost of adapting business 
processes to facilitate switching 
in compliance with the 
measures of this option 

Cost of adapting business 
processes to facilitate switching 
in compliance with the 
measures of this option 

Updating website to include 
information on switching 
process 
Cost of adapting IT systems to 
facilitate switching in 
compliance with this option 

Staff time involved in 
implementing switching 
Cost of internal compliance - 
additional staff costs of 
compliance department 
Submitting compliance 
statement to regulatory body 

9.1- 12.73 

33.99-67.97 

0.91 -2.27 

22.70-  45.41 

203.-271.88 

26.5 

0.9-1.8 

One-Off costs to Credit 
institutions 

Acquisition costs 

Recurring costs to Credit 
institutions 

Time-based costs 

Calculation basis 

1 staff member per bank  would be involved in this exercise  

• 
•  Time spent will be 0.5  to 1 day 
•  Daily average labour rate for credit institutions calculated as = EUR 232 
•  Applied weighting factor = 0.58 

1 staff member per bank  would be involved in this exercise  

• 
•  Time devoted will be 5 to 7 days  
•  The number of credit institutions = 7 855  
•  Applied weighting factor = 0.58  

•  They will devote 0.5  to 1 day per staff directly dealing with customers (20% of total staff of credit institutions) 
•  Applied weighting factor = 0.58 

Unit cost per credit institution = range of EUR 200- 500 
Applied to all credit institutions = 7 855 
Applied weighting factor = 0.58 
Unit cost per credit institution = range of EUR 5 000 – 10 000  
The number of credit institutions = 7 855 
Applied weighting factor = 0.58 

Daily average labour rate for credit institutions calculated as = EUR 232 
Applied weighting factor = 0.58 
Yearly costs of 0.1 staff per credit institution 
Daily average labour rate for credit institutions calculated as = EUR 232, year assumed to have 252 working days 
Applied weighting factor = 0.58.  
They will devote 0.5 to 1 day staff cost per credit institution 
Daily average labour rate for credit institutions calculated as = EUR 232 

One-Off costs to public 
authorities 

Time-based costs 

Transposing EU legislation into 
national law - developing 
legislation  
Awareness raising campaigns 

1.26 

Assumes 1500 hours' work at average wage rate (EUR 31.5) per Member State 

1.89 

Average cost per Member States is assumed to be EUR 70 000 

EN 

266 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring costs to public 
authorities 

Time-based costs 

Monitoring compliance, 
Reporting and enforcement 
costs 

2.13 

Assumes 2 500 hours' work at average wage rate (EUR 31.5) per Member State 

Option 4A: Introduce a domestic automatic redirection service 
Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

Benefit  accrued  from  changes 
in switching behaviour  

EUR (Millions) 

Calculation basis 

Table 6.Z 

 5 848.65 

• 
• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 
constant +1%. Amounts are expressed on a cumulative basis. 

Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average cost of 

Benefits  resulting  from  direct 
costs savings 

1 284.2 

a bank account between 2013 and 2022 
Direct costs savings for postage EUR 83 million:  

• 
= average number of direct monthly debits multiplied by the number of potentially switched bank accounts multiplied by EUR 0.5 postage fees; 
this number is multiplied by 0.9 to account for the fact that those consumers who might wish to switch cross-border (estimated as 10% of the 
switchers) will not incur these benefits 
Costs savings resulting from a reduction in errors in transfer of recurrent payments = EUR 140 million:  

• 

=  average  number  of  direct  monthly  debits  multiplied  by  8.5%  (UK  estimate  of  number  of  recurrent  payment  transfers  gone  wrong

) 
multiplied  by  EUR  10  (estimate  for  an  average  late  payment  fee  or  potential  overdraft  fees  resulting  from  direct  debiting  to  wrong 

680

). This number is multiplied by 0.9 to account for the fact that those consumers who might wish to switch cross-border (estimated 

681

account
as 10% of the switchers) will not incur these benefits. 
Costs savings in terms of time value = EUR 1 061 million:  

• 

= number of switchers
683

682

 multiplied by 1h multiplied by the average hourly wage (1/7 of the average daily rate EUR 232). The assumption of 1 

 is for this calculation as the consumer not only saves time during the switching process, but also time that would be needed to sort 
hour
out recurrent payments then went wrong. This number is multiplied by 0.9 to account for the fact that those consumers who might wish to 
switch cross-border (estimated as 10% of the switchers) will not incur these benefits. 

Cost per stakeholder and 

Cost description  

Range in EUR 

Calculation basis 

ICB Final report recommendations, ICB, September 2011, p. 220, http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf. 
Ibid. 

680 
681 
682  Estimated as 10% of Europe-wide payment account users. 
683  Conservative estimate of time saved by consumers due to redirection service. 

EN 

267 

EN 

 
  
 
 
 
 
                                                 
cost type 
One-Off  costs 
institutions 

to  credit 

Overall cost of introduction of a 
redirection service 

(Millions) 

500 – 22 734 

• 

• 

Based on the costs for industry of the re-routing system introduced in 2004 in the Netherlands (EUR 18 million) and the cost estimate for 
the redirection system that is being developed in the United Kingdom (estimated cost ranges between GBP 650-850 million)  
This range was determined by: 
1. 

Identifying a price range for the costs per credit institution calculated as costs of introduction of such service in the Member States 
were such costs/estimates are available (Netherlands, United Kingdom ) divided by the number of existent credit institution in the 
respective Member State  

684

) -> the resulting range being 

Recurring  costs  to  Credit 
institutions 

Not quantified 

2. 

Then multiplying these range values with the total number of credit institutions in the EU (7 992
between EUR 0.5-23 million per credit institution and to EUR 500-22 734 million in total. 

• 

The overall average cost of implementation of this option = EUR 11 622 million. 

Option 4B: Introduce an EU-wide automatic redirection service 
Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

Benefit  accrued  from  changes 
in switching behaviour  

EUR (Millions) 

 6 579.73 

Benefits  resulting  from  direct 
costs savings 

1 426.9 

Table 6.AA 

Calculation basis 

• 
• 

• 

• 

• 

• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 

constant +1%. Amounts are expressed on a cumulative basis. 

Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 

cost of a bank account between 2013 and 2022 

Direct costs savings for postage EUR 92 million:  
= average number of direct monthly debits multiplied by the number of potentially switched bank accounts multiplied by EUR 0.5 postage 

fees 

Costs savings resulting from a reduction in errors in transfer of recurrent payments = EUR 156 million:  

= average number of direct monthly debits multiplied by 8.5% (UK estimate of number of recurrent payment transfers gone wrong
) 
multiplied  by  EUR  10  (estimate  for  an  average  late  payment  fee  or  potential  overdraft  fees  resulting  from  direct  debiting  to  wrong 

685

686

account
Costs savings in terms of time value = EUR 1 179 million:  

). 

=  number  of  switchers
688

687

  multiplied  by  1h  multiplied  by  the  average  hourly  wage  (1/7  of  the  average  daily  rate  EUR  232).  The 

assumption of 1 hour
be needed to sort out recurrent payments then went wrong. 

 is for this calculation as the consumer not only saves time during the switching process, but also time that would 

Cost per stakeholder and 

Cost description  

Range in EUR 

Calculation basis 

ICB Final report recommendations, ICB, September 2011, p. 220, http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf. 
Ibid. 

684  Current number of credit institutions in Europe (ECB data). 
685 
686 
687  Estimated as 10% of Europe-wide payment account users. 
688  Conservative estimate of time saved by consumers due to redirection service. 

EN 

268 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
cost type 
One-Off  costs 
institutions 

to  credit 

Overall cost of introduction of a 
redirection service 

(Millions) 

500 – 22 734 

• 

• 

Recurring  costs  to  Credit 
institutions 

Not quantified 

Option 5A: Domestic payment account portability 
Benefit description 
Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit accrued from changes 
in switching behaviour  

8 772.98 

Benefits resulting from direct 
costs savings 

1 284.2 

Based on the costs for industry of the re-routing system introduced in 2004 in the Netherlands (EUR 18 million) and the cost estimate for 
the redirection system that is being developed in the United Kingdom (estimated cost ranges between GBP 650-850 million)  
This range was determined by: 
1. 

Identifying a price range for the costs per credit institution calculated as costs of introduction of such service in the Member States 
were such costs/estimates are available (Netherlands, United Kingdom ) divided by the number of existent credit institution in the 
respective Member State  

689

) -> the resulting range being 

2. 

Then multiplying these range values with the total number of credit institutions in the EU (7 992
between EUR 0.5-23 million per credit institution and to EUR 500-22,734 million in total. 

• 

The overall average cost of implementation of this option = EUR 11 622 million. 

EUR (Millions) 

Calculation basis 

Table 6.BB 

• 
• 

• 

• 

• 

• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 
constant +1%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 
cost of a bank account between 2013 and 2022 
Direct costs savings for postage EUR 83 million:  
= average number of direct monthly debits multiplied by the number of potentially switched bank accounts multiplied by EUR 0.5 postage 
fees; this number is multiplied by 0.9 to account for the fact that those consumers who might wish to switch cross-border (estimated as 10% 
of the switchers) will not incur these benefits 
Costs savings resulting from a reduction in errors in transfer of recurrent payments = EUR 140 million:  

= average number of direct monthly debits multiplied by 8.5% (UK estimate of number of recurrent payment transfers gone wrong
multiplied by EUR 10 (estimate for an average late payment fee or potential overdraft fees resulting from direct debiting to wrong 

). This number is multiplied by 0.9 to account for the fact that those consumers who might wish to switch cross-border 

691

account
(estimated as 10% of the switchers) will not incur these benefits. 
Costs savings in terms of time value = EUR 1 061 million:  

690

) 

 multiplied by 1h multiplied by the average hourly wage (1/7 of the average daily rate EUR 232). The assumption 

= number of switchers
693

692

of 1 hour
 is for this calculation as the consumer not only saves time during the switching process, but also time that would be needed to 
sort out recurrent payments then went wrong. This number is multiplied by 0.9 to account for the fact that those consumers who might wish 

ICB Final report recommendations, ICB, September 2011, p. 220, http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf. 
Ibid. 

689  Current Number of credit institutions in Europe (ECB data). 
690 
691 
692  Estimated as 10% of Europe-wide payment account users. 
693  Conservative estimate of time saved by consumers due to redirection service. 

EN 

269 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Cost per stakeholder and 
cost type 
One-Off costs to credit 
institutions 

Cost description  

Overall cost of introduction of a 
redirection service 

Range in EUR 
(Millions) 
14 700 

Recurring costs to Credit 
institutions 

One-Off costs to public 
authorities 
Time-based costs 

Not quantified 

Transposing EU legislation into 
national law - developing 
legislation  
Awareness raising campaigns 

Recurring costs to public 
authorities 
Time-based costs 

Monitoring compliance, 
Reporting and enforcement 
costs 

1.26 

1.89 

2.13 

to switch cross-border (estimated as 10% of the switchers) will not incur these benefits. 

Calculation basis 

• 

• 

• 

• 

• 

This figure has been estimated by a study "Customer Mobility in Relation to Bank Accounts" conducted by BearingPoint GmbH in 2007, 
(p. 48.) 
It seems to be consistent with an estimation quoted by a Dutch bank in the Expert Group, according to which in the Netherlands the number 
portability would cost, only for the banks, EUR 300-500 million as well as with the Dutch Banking Association who estimated the number 
portability to cost EUR 260-510 millions. 

Assumes 1 500 hours' work at average wage rate (EUR 31.5) per Member State 

Average cost per Member States is assumed to be EUR 70 000 

Assumes 2 500 hours' work at average wage rate (EUR 31.5) per Member State 

Option 5B: EU payment account portability 
Benefit per stakeholder 
and cost type 
Benefits to consumers 

Benefit description 

Benefit accrued from changes 
in switching behaviour  

8 772.98 

EUR (Millions) 

Calculation basis 

Table 6.CC 

Benefits resulting from direct 
costs savings 

1 426.9 

• 
• 

• 

• 

• 

• 

Present value ('PV') of estimated incremental cost savings accrued to switchers from 2013 to 2022, discounted at 4%. 
The impact on consumer switching behaviour is assumed as follows: 2013: +0% of total number of bank account holders; 2014-2022: a 
constant +1%. Amounts are expressed on a cumulative basis. 
Savings are calculated based on the assumption that switchers would accrue cost savings equal to a constant 20% of an EU yearly average 
cost of a bank account between 2013 and 2022 
Direct costs savings for postage EUR 92 million: 
= average number of direct monthly debits multiplied by the number of potentially switched bank accounts multiplied by EUR 0.5 postage 
fees 
Costs savings resulting from a reduction in errors in transfer of recurrent payments = EUR 156 million:  

= average number of direct monthly debits multiplied by 8.5% (UK estimate of number of recurrent payment transfers gone wrong
multiplied by EUR 10 (estimate for an average late payment fee or potential overdraft fees resulting from direct debiting to wrong 

694

) 

695

account
Costs savings in terms of time value = EUR 1 179 million:  

). 

= number of switchers
697

696

of 1 hour
sort out recurrent payments then went wrong.  

 multiplied by 1h multiplied by the average hourly wage (1/7 of the average daily rate EUR 232). The assumption 

 is for this calculation as the consumer not only saves time during the switching process, but also time that would be needed to 

694 
695 

ICB Final report recommendations, ICB, September 2011, p. 220, http://www.ecgi.org/documents/icb_final_report_12sep2011.pdf. 
Ibid. 

EN 

270 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Cost per stakeholder and 
cost type 
One-Off costs to credit 
institutions 

Cost description  

Overall cost of introduction of a 
redirection service 

Range in EUR 
(Millions) 
14 700 

Calculation basis 

• 

• 

This figure has been estimated by a study "Customer Mobility in Relation to Bank Accounts" conducted by BearingPoint GmbH in 2007, 
(p. 48.) 
It seems to be consistent with an estimation quoted by a Dutch bank in the Expert Group, according to which in the Netherlands the number 
portability would cost, only for the banks, EUR 300-500 million as well as with the Dutch Banking Association who estimated the number 
portability to cost EUR 260-510 millions. 

Recurring costs to credit 
institutions 

One-Off costs to public 
authorities 
Time-based costs 

Not quantified 

Transposing EU legislation into 
national law - developing 
legislation  
Awareness raising campaign 

Recurring costs to public 
authorities 
Time-based costs 

Monitoring compliance, 
Reporting and enforcement 
costs 

1.26 

Assumes 1 500 hours' work at average wage rate (EUR 31.5) per Member State 

1.89 

2.13 

Average cost per Member States is assumed to be EUR 70 000 

Assumes 2 500 hours' work at average wage rate (EUR 31.5) per Member State 

Administrative burden 
Administrative burden is calculated for the package of preferred options set out in Section 8.1, 'Cumulative impacts and impacts on stakeholders'. Our 
analysis in Section 8.2.4, 'Administrative burden' indicates that the preferred set of options in the area of access is expected to generate only a limited 
amount of administrative burden. However administrative burden is expected to arise from the preferred options in the areas of ease of comparison of 
bank fees and requirements covering presentation and payment account switching. 
Given  that  the  set  of  preferred  options  covering  presentation  requirements  for  fees  and  switching  inherently  contain  significant  information 
requirements, particularly for credit institutions, it was necessary to quantify administrative burden as part of this impact assessment. 
Our  assessment  indicates  that  administrative  costs  generated  by  the  package  of  preferred  options  would  not  be  incurred  by  credit  institutions  or 
Member States in the absence of legislation. As a result cost items that are administrative costs in nature are allocated in full to administrative burden. 
The measurement of administrative burden is derived from the quantification of costs in the study 'Quantification of the economic impacts of EU action 
to improve fee transparency, comparability and mobility in the internal market for bank personal current accounts'. Thus the computation of burdens 
on a cumulative basis results from amounts derived for compliance costs for individual options. Further details on the methodology used to compute 
administrative burden is summarised below:  

1. 

Identify administrative costs within overall costs of compliance: 

696  Estimated as 10% of Europe-wide payment account users. 
697  Conservative estimate of time saved by consumers due to redirection service. 

EN 

271 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                                                                                                                    
• 

The categories and items of cost incurred by credit institutions, comparison website operators and Member States in meeting legal obligations 
as a result of the package of preferred options are provided in the table below: 

Types of required action 

Familiarising with the information 
obligation: 
Retrieving relevant information from 
existing data 
Adjusting existing data 

Designing information material 

Filling forms 
Holding meetings 

Inspecting and checking 

Submitting information to the relevant 
authority 

Buying equipment & supplies  
Other 

Table 6.DD 

Cost  items  description  (CI  –  Credit  institution;  MS  –  Member  States;  WO  –  Comparison  website 
operators) 
–  Time spent by legal department to familiarise with new legislative requirements (CI) 

–  Cost of updating IT systems to enable filtering of transactions, generate summary charges, et c (CI) 

Industry inputs/support to the development of a standard price list with most common fees (CI) 
Identifying list of most common fees (MS) 
Setting up an accreditation system (MS) 

–  Cost of adapting IT systems with list of standard fees (CI) 
–  Time spent by legal department to adapt contractual information (CI) 
–  Updating website with new pricing information (CI) 
–  Adapting format of account statements to include summary box or annex (CI) 
–  Cost of adapting marketing/advertising/promotional material (CI) 
–  Revising list of common fees (MS) 
–  Cost of internal compliance – additional staff costs of compliance department (CI) 
– 
– 
– 
–  Meeting audit requirements (WO) 
–  Monitoring compliance (MS) 
– 
–  Regular monitoring of websites (MS) 
–  Cost of obtaining accreditation (WO) 
– 
–  Cost of printing price lists (CI) 
–  Disseminating fee information to consumers in standard form (CI) 
–  Reporting to the EU (MS) 
– 
–  Awareness raising campaigns (MS) 
–  Enforcement (MS) 

Initial investments to meet requirement of accreditation system (WO) 

Submitting compliance statement/price lists to regulatory body (CI) 

Performing audits  - website operators (MS) 

2. 

• 

EN 

Determine the basis for calculation of administrative burden 

Administrative costs are calculated in compliance with the EU Standard Cost Model. As a result all time-based costs are expressed in terms of 
the following formula: tariff * time * population (n° of entities impacted). In some cases, costs of acquisition for services directly linked to 
work required to meet legal obligations is computed using an estimated cost of acquisition * population. 

272 

EN 

 
  
• 

• 

• 

3. 

• 

• 

• 

4. 

• 

• 

A discount factor was applied to the costs derived using the formula to reflect the incremental nature of costs generated by EU action. The 
discount factor reflects the distance between the current regulatory and market baseline within Member States and the EU proposals contained 
in the set of preferred options. For further details on the discount factor used refer to point 4 below.  

Unless otherwise specified the same assumptions were used in deriving the amounts underlying administrative burden as in the quantification 
of costs as described in section "Ease of comparison of bank fees, requirements covering presentation and payment account switching" above. 

A detailed description of the calculation basis for each item of administrative burden is provided in table 6.EE below. 

Eliminate double counting of administrative costs relevant to more than one preferred option within the package 

Administrative  burden  for  the  package  of  preferred  options  is  calculated  based  on  the  costs  determined  on  an  individual  option  basis,  for 
relevant administrative costs in point 1 above. 

Items  of  administrative  costs  that  are  generated  by  a  single  option  within  the  package:  The  calculation  basis  used  to  appear  only  in  one 
preferred option within the package, the same calculation basis is used to derive administrative burden as that used to quantify the item of cost 
in the option 

Items of administrative costs incurred in more than one preferred option within the package: In none of these cases (relevant to time-based 
costs),  was  it  considered  appropriate  to  cumulate  the  time  allocation  attributed  to  each  option  to  derive  total  time  for  the  action  on  a 
cumulative basis.  As a result the amount corresponding to the highest time based effort assessed for the preferred options on an individual 
basis was applied to avoid overstating administrative costs common to more than one option.  

Determine an appropriate discount factor to apply to administrative costs on a cumulative basis 

The use of a discount factor to reflect the incremental nature of costs derived from the proposed EU action with respect to the regulatory and 
market baseline within Member States is part of the methodology used in the study 'Quantification of the economic impacts of EU action to 
improve fee transparency, comparability and mobility in the internal market for bank personal current accounts' 

Items  of  administrative  costs  that  are  generated  by  a  single  option  within  the  package:  The  same  discount  factor  as  the  one  applied  to  the 
relevant option was used. As in the quantitative assessment performed for options on an individual basis, discount factors are only applied to 
costs items where relevant. The same approach was adopted in the calculation of administrative costs. 

EN 

273 

EN 

 
  
• 

Items of administrative costs incurred in more than one preferred option within the package: A discount factor of 0.5698 is applied to amounts 
of administrative costs computed using the formulae set out in point 1. This is a weighted average discount factor computed for the preferred 
package of options based on the calculation used to derive discount factors determined on a per option basis. 

Preferred options 
reference 

Cost description  

Range from – to in 
Euro (Millions) 

Calculation basis  

Table: 6.EE: Administrative burden per stakeholder group and per cost item 

0.77 – 1.28 

0.91 – 1.82 

2 staff members per bank  would be involved in this exercise 

• 
•  They will devote 3 to 5 days each 
•  Not all credit institutions across the EU would contribute to this exercise – it is assumed that 20% ( of the total of 7.855) credit 

institutions, would contribute to this process 

•  Discount factor – distance from policy frontier = 0.35 

1 staff member per bank  would be involved in this exercise 

• 
•  Time spent 1 to 2 days  
•  Discount factor – distance from policy frontier = 0. 5  

Time spent by legal department to 
adapt contractual documentation 

0.91 – 1.82 

1 member of the legal  team per bank  

• 
• 
•  Discount factor not applied as all banks would have to update contracts to include references to the standard price list which would 

0.5 to 1 day per person 

Credit institutions – One off costs 
Bank fees option 2 

Input into the process of 
determining a list of most relevant 
fees 

Bank fees options 2, 8 

Payment account 
switching option 3b 
Bank fees options 2, 8 

Bank fees options 2, 8 

Bank fees options 2, 8 

Bank fees option 8 

Bank fees options 2, 8 

Payment account 
switching option 3b 

Time spent by the legal 
department to familiarise with 
legislation  

Cost of updating/adapting IT 
applications to provide standard 
price lists 
Cost of adapting 
marketing/advertising promotional 
material 
Adapting format of account 
statements to include summary 
box or annex 
Updating website with common 
fee terms/pricing information 

Credit institutions – Recurring costs 
Bank fees option 2 

Costs of printing price lists 

117.82 – 196.37 

now have a specific name under national law 
–  Unit cost per credit institution = range of EUR 30 000 – 50 000   

•  Discount factor – distance from policy frontier = 0.5 

117.82 – 196.37 

Unit cost per credit institution = range of EUR 30 000 – 50 000   
•  Discount factor – distance from policy frontier = 0.5 

13.62 – 27.25 

0.79 – 1.96 

253.55 – 428.69 

32.30- 96.89 

•  Unit cost per credit institution = range of EUR  5 000  - 10 000  
•  Discount factor – distance from policy frontier = 0.35 

•  Unit cost per credit institution = range of EUR 200 – 500   
•  Discount factor – distance from policy frontier = 0. 5 

•  Unit cost = Euro 0.10 to 0.30 per print out 
•  Lists are made available in hard copy format to 10% of customers [consider bank account holders] 

698 

EN 

Quantification of the economic impacts of EU action to improve fee transparency, comparability and mobility in the internal market for bank personal current accounts, GHK consulting 

274 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Bank fees options 2, 8 

Payment account 
switching option 3b 

Additional staff costs generated by 
new compliance requirements 

202.27 

•  10% of 1 Full Time Equivalent per credit institution per annum 
•  Discount factor: Distance from the policy frontier  = 0.5 

•  Discounting factor not applied as new price lists would need to be printed in accordance with standard format and a given name 

Bank fees options 2, 8 

Recurring reporting requirements 

8.03 – 16.05 

•  1 person per bank 
•  1 day per year 
•  No discount factor applied. 

Payment account 
switching option 3b 

Bank fees options 8 

Disseminating fee information to 
consumers in standard EU form - 
assumed annually 

112.02 – 336.07 

354.61 – 651.28 

•  Unit cost = Euro 0.10 to 0.30 per print out 
•  Lists are made available in hard copy to customers [consider bank account holders] 
•  Discount factor: Distance from the policy frontier  = 0.35 

Comparison website operators – One off costs 
Bank fees option 4b 

Cost of obtaining accreditation 

Bank fees option 4b 

Initial investments to meet 
requirements of accreditation 
system e.g. setting up a complaints 
handling mechanism ting up 
internal process 

Comparison website operators – Recurring costs 
Bank fees option 4b 

Meeting requirements - annual 
audit 

Member States – One off costs 
Bank fees options 2, 8 

Identifying and agreeing 20 most 
common fees 

0.05- 0.11 

0.27-  0.54 

0.32 – 0.65 

4.77 – 9.53 

4.77 – 9.53 

0.06 – 0.09 

Bank fees options 4b 

Setting up an accreditation system 

0.36 - 0.66 

Payment account 
switching option 3b 

Awareness raising campaigns 
(introductory) 

1.89 

2.32 – 2.65 

•  Assumed 2 websites per MS on average 
•  Each website operator will incur EUR 1 000 – EUR 2 000 on obtaining accreditation per year 

No Discount factor applied. 

•  Assumed 2 websites per MS on average 
•  Each website operator will spend EUR 5 000 – EUR 10 000 

No Discount factor applied. 

•  Each website operator will incur EUR 10 000 – EUR 20 000 
•  No Discount factor applied. 

 2 officials involved  

•  2 officials are involved 
•  Each official spends 20 to 30 days per year on this activity 
•  Discount factor: Distance from the policy frontier  = 0.5 
• 
•  Each official will spend 15 to 20 days on this activity 
•  No Discount factor applied. 
•  Additional acquisition costs within a range of EUR 10 000 – EUR 20 000 
•  Average cost per Member State assumed to be EUR 70 000 

ember States – Recurring costs 

Bank fees options 2, 8 

Revising list of common fees 

0.14-  0.27 

•  2 officials are involved 

EN 

275 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Bank fees options 2, 8 

Monitoring compliance 

18.76 

Payment account 
switching option 3b 
Bank fees options 2, 8 

Reporting to EU 

0.05 -  0.08 

Bank fees options 2, 8 

Enforcement costs  

0.33 – 0.66 

•  Time spent estimated at 5 to 10 days per year on this activity 
•  Discount factor: Distance from the policy frontier  = 0.5 
•  Assumes 2500 hours' work at an average wage rate (EUR 31.5) per Member State 
•  No discount factor applied. 

•  1 official involved  
•  2 to 3 days per official per year 
•  Discounting factor not applied – as not a requirement under current situation 
•  1 official involved  
•  12 to 24 days per year 
•  No discount factor applied. 

Bank fees options 4b 

Quarterly audits 

0.44- 0.66 

Bank fees options 4b 

Regular monitoring of sites 

0.66 – 1.32 

•  1 official involved  
•  Each official will spend 16 to 24 days on this activity  
•  No Discount factor applied. 
•  1 official involved  
•  Each official will spend 24 to 48 days on this activity 
•  No Discount factor applied. 

Bank fees options 4b 

Awareness raising campaigns  

2.38 -  4.77 

•  Each MS spends EUR 10 000 – EUR 20 000 on promotional activities/ information campaigns per year 
•  No Discount factor applied. 

22.77 – 26.52 

EN 

276 

EN