Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EC) No 924/2009 as regards certain charges on cross-border payments in the Union and currency conversion charges
Date: 2018-03-28
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: bank charges, electronic banking, euro area, financial institution, financial legislation, financial services, intra-EU payment, payment, single market

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   EUROPEAN COMMISSION  Brussels, 28.3.2018 COM(2018) 163 final 2018/0076 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EC) No 924/2009 as regards certain charges on cross-border payments in the Union and currency conversion charges (Text with EEA relevance) {SWD(2018) 84 final} - {SWD(2018) 85 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  EU’s  Single  Market  allows  people,  services,  goods  and  capital  to  move  freely  in  an 
economy  with  an  annual  Gross  Domestic  Product  of  EUR 15  trillion.  It  offers  new 
opportunities  for  European  businesses  and  contributes  to  healthy  competition.  This  leads  to 
more choice, better services and lower prices for over 500 million consumers. 

A key priority of the Juncker Commission is the creation of a deeper and fairer Single Market. 
In  December  2015,  the  European  Commission  presented  a  Green  Paper  to  consult  on  the 
potential  of a more integrated market for retail financial services, and the actions  needed to 
achieve  this  goal.  Based  on  the  feedback  received  from  stakeholders  and  the  European 
Parliament's Report1 on the Green Paper, the Commission published in March 2017 an Action 
Plan2 setting out a strategy to strengthen the Single Market for consumer financial services. 

Cross-border payments are crucial for the integration of consumer financial services and the 
EU’s economy. They play an important role in bringing together people and businesses in EU 
Member  States.  Restrictions  and  excessive  costs  for  cross-border  payments  prevent  the 
completion of the Single Market.  

Fees for cross-border payments 

Regulation  924/2009  on  cross-border  payments  equalised,  across  the  EU,  fees  for  cross-
border payments in euro within the Union with domestic payments in euro (i.e. payments in 
euro within the same Member State). Non-euro area Member States, although covered by the 
Regulation,  did  not  benefit  from  the  effects  of  that  Regulation:  in  these  Member  States, 
domestic  payments  in  euro  are  either  very  expensive  or  simply  do  not  exist.  As  a 
consequence, people and businesses in these non-euro area EU Member States pay high fees 
whenever a payment crosses the border of their country or when people travel and pay abroad. 
These  high  costs  are  an  impediment  to  the  completion  of  the  Single  Market  and  create  two 
categories of payment service users in the EU.  

Non-euro area Member States were given the option to extend Regulation 2560/2001 and its 
successor  Regulation  924/2009  to  their  national  currencies.  However,  this  option  was  only 
used by Sweden, which aligned fees for cross-border payments in Swedish krona with fees for 
domestic payments in Swedish krona. 

The objective of this proposal is to bring the benefits of Regulation 924/2009 to people and 
businesses in Member States outside the euro area, and put an end to the high cost of intra-EU 
cross-border transactions in euro. This high cost acts as a barrier to exchanges between euro 
area and non-euro area Member States and is detrimental to both areas. People and businesses 
outside the euro area suffer higher costs to access markets or interact with people in the euro 
area. This means they cannot trade or compete with their counterparts in the euro area under 
the same conditions. For example, when a non-euro area business has suppliers located in the 
euro area, the cost of its input will be higher than it would be for a competitor located in the 
euro  area.  Equally,  this  additional  barrier  to  free  movement  and  trade  limits  the  number  of 

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2016/2056(INI) 
COM/2017/0139 

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potential  clients  available  to  euro  area  businesses.  The  tables  below  illustrate  the  current 
situation and the situation after application of the amended Regulation. 

The proposal does not deal with cross-border transactions in other currencies than euro. 

CURRENT SITUATION 

SENDING EUROS FROM … 

Euro area (+ Sweden)3 

Non-euro area 

TO … 

Euro area (+ Sweden) 

ZERO/LOW FEES 

HIGH FEES 

Non-euro area 

ZERO/LOW 
FEES FOR 
THE 
SENDER 

HIGH 
FEES FOR 
RECEIVER 

HIGH FEES 

At present, for example a citizen or company in Bulgaria4 making a cross-border transfer of 
EUR 500 to Finland may have to pay up to EUR 24 in fees, whereas a person transferring the 
same  amount  to  Finland  from  France  would  pay  nothing,  or  almost  nothing5.  The  person 
making  the  payment  from  France  would  pay  the  same  amount  that  he  would  pay  for  a 
domestic transfer within France. 

AFTER THE AMENDMENTS CONTAINED IN THIS PROPOSAL 

SENDING EUROS FROM … 

TO … 

Euro area (+ Sweden) 

Non-euro area 

Euro area (+ Sweden) 

Non-euro area 

ZERO/LOW FEES 
ZERO/LOW FEES 

ZERO/LOW FEES 
ZERO/LOW FEES 

As a result of the amendments contained in this proposal, the citizen or company transferring 
euros  from  Bulgaria  would  also  pay  nothing  —  or  almost  nothing  —  in  this  situation.  This 
person or company would pay the same fees for a transfer in euros to Finland that they would 
pay for a domestic transfer in levs within Bulgaria. 

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As a result of Sweden deciding to opt in Article 14 of Regulation 924/2009. 
Source:  Deloitte 
transaction-fees-extension_en 
Ibid. 

available 

study 

at  https://ec.europa.eu/info/files/180328-study-cross-border-

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Transparency obligations related to currency conversion practices 

The amendments to Regulation 924/2009 contained in this proposal also establish additional 
transparency obligations for currency conversion practices in line with Articles 45 and 59 of 
Directive  2015/2366  on  payment  services  in  the  internal  market.  These  new  transparency 
obligations are warranted, because consumers in the EU face a lack of transparency whenever 
they  make  a  payment  involving  a  currency  conversion.  When  a  consumer  makes  a  card 
payment abroad (be it a cash withdrawal at an ATM or a card payment at a point of sale) in a 
different currency than their home currency, they are often given two choices. The first choice 
is to pay in their home currency, a service called dynamic currency conversion. This service is 
offered  by  dynamic  currency  conversion  providers  and  the  bank  of  the  merchant.  The 
consumer’s second choice is to pay in the local currency using the services of the card scheme 
and  the  consumer’s  bank  (non-dynamic  currency  conversion  or  ‘on-network’  conversions). 
Consumers have been complaining about dynamic currency conversion practices in particular. 
This is because they consider that they lack the necessary information to make an informed 
choice.  As  a  result,  consumers  often  unwillingly  choose  the  more  expensive  currency 
conversion option. 

This proposal will enhance transparency for consumers by disclosing the full cost of a cross-
border  transaction.  It  will  help  them  compare  currency  conversion  service  offers  before 
starting  a  payment  transaction  involving  a  currency  conversion.  Considering  the  very 
technical  nature  of  currency  conversion  in  a  fast-changing  environment,  the  European 
Banking  Authority  will  be  tasked  with  establishing  regulatory  technical  standards  to  better 
frame  currency  conversion  practices.  The  proposal  will  also  establish  a  temporary  cap  on 
currency conversion costs until the transparency measures devised by the European Banking 
Authority  take  effect,  i.e.  at  the  latest  36  months  after  the  entry  into  force  of  the  amended 
Regulation. 

Once  implemented,  this  proposal  will  generate  significant  savings  for  consumers,  while  the 
revenues of some payment service providers may decrease. The proposal will also ensure that 
currency  conversion  costs  are  not  used  by  payment  service  providers  to  compensate  for 
reduced revenues through increased non-transparent margins on currency conversion, as these 
costs are usually not known by payment service users. 

• 

Consistency with existing policy provisions in the policy area 

Since  the  introduction  of  the  euro,  the  European  Union  has  launched  various  initiatives  to 
significantly  reduce  the  cost  of  cross-border  transactions.  The  three  most  important  such 
initiatives are listed below. 

-  The  introduction  of  a  set  of  single  euro  payments  area  (SEPA)  standards  for  euro 
transactions,  including  single  euro  payments  area  credit  transfers  and  single  euro  payments 
area direct debits.  

-  The  Payment  Services  Directives  (Directive  2007/64/EC,  replaced  by  Directive  (EU) 
2015/2366) increased the transparency of fees and facilitated the entry of new players in the 
market.  This  contributed  to  greater  competition  in  payments,  including  cross-border 
payments, and increased the transparency of fees. This also resulted in improvements in the 
payments  infrastructure,  which  became  capable  of  handling  increased  payment  volumes  in 
euro at lower costs.  

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-  Regulation  2560/2001,  later  replaced  by  Regulation  924/2009,  on  cross-border  payments 
also contributed by equalising fees for cross-border and national payments in euro within the 
EU.  

All  these  initiatives  contributed  to  the  further  integration  of  the  Single  Market  and  the 
emergence of a more integrated payments market within the euro area. 

• 

Consistency with other EU policies 

This initiative contributes to the better functioning of the Single Market. It also brings some 
key  benefits  of  Economic  and  Monetary  Union  (namely  efficient  and  low-cost  cross-border 
transactions)  to  people  and  businesses  in  non-euro  area  Member  States.  The  initiative  is  in 
line with the FinTech Action Plan6, which aims to bring more competition and innovation to 
the  European  financial  sector.  The  initiative  is  also  closely  linked  to  the  Capital  Markets 
Union,  an  objective  of  which  is  to  create  a  genuine  single  capital  market  in  the  EU,  where 
investors  can  invest  their  funds  without  obstacles  across  borders,  and  where  businesses  can 
raise funds from a diverse range of sources, irrespective of their location. The Digital Single 
Market’s objective of removing barriers to online trade will also be served by this initiative, 
which  will  apply  both  in  the  brick-and-mortar  and  in  the  digital  environment.  This  will 
remove  one  barrier  —  fees  for  cross-border  transactions  —  that  may  prevent  cross-border 
online sales. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 114 of the Treaty on the Functioning of the European Union confers to the European 
institutions the competence to lay down appropriate provisions that have as their objective the 
establishment and functioning of the internal market. 

The  Single  Market  encompasses  the  free  movement  of  goods,  people,  services  and  capital. 
Payments  are  important  to  complete  the  Single  Market  possible,  but  barriers  are  currently 
being  created  by  the  high  cost  of  cross-border  payments.  This  makes  it  more  difficult  for 
households  and  businesses  to  engage  in  cross-border  trade.  The  high  costs  of  cross-border 
payments  also  create  two  categories  of  payment  service  users.  The  first  category  comprises 
users  in  the  euro  area  who  are  able  to  reach, with  their  payments,  a  majority  of  people  and 
businesses in the EU at a very low cost. The second category comprises users in non-euro area 
countries  who  can  only  reach  a  limited  number  of  people  and  businesses  with  low-cost 
payments. 

To address these two concerns, legislative action at EU level is the most effective response, 
and is in line with the objectives of the Treaties. 

• 

Subsidiarity (for non-exclusive competence) 

Under  Article 4  of  the  Treaty  on  the  Functioning  of  the  European  Union,  EU  action  for 
completing the internal market must be appraised in light of the subsidiarity principle set out 
in Article 5(3) of the Treaty on European Union. It must be assessed whether the objectives of 
the  proposal  (a)  could  not  be  achieved  by  the  Member  States  through  their  national  legal 
systems, and (b) by reason of their scale and effects, are better achieved at EU level. 

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Member  States  were  previously  given  the  option  to  extend  Regulation  2560/2001  and  its 
successor Regulation 924/2009 to their national currencies. To date, only Sweden has made 
use  of  this  option.  As  a  consequence,  prices  of  intra-EU  cross-border  payments  in  Swedish 
krona from Sweden are now the same as domestic payments made within Sweden. Sweden’s 
use of this option also positively impacted cross-border payments in euro which are offered 
by Swedish banks with no additional charge compared to krona payments within Sweden.  

It is true that other non-euro area Member States could take individual actions — like Sweden 
did  —  to  reduce  the  cost  of  cross-border  payments.  However  the  current  barriers  would 
remain as long as there are Member States where no action is taken. For this reason, tackling 
the problem by acting at EU level is preferable to leaving it to individual Member States or to 
the market, neither of which can guarantee swift progress and full EU coverage. 

Moreover,  action  at  EU  level  would  generate  economies  of  scale  (increasing  the  volume  of 
cross-border  transactions,  leading  to  enhanced  efficiency  in  the  payments  infrastructure).  It 
would  also  increase  the  volume  of  intra-EU  cross-border  trade,  stimulate  competition  and 
further integrate the economies of the EU. 

Keeping the status quo would maintain this de facto divide, slow down economic integration 
and prevent the deepening of the single market. 

• 

Proportionality 

Under the principle of proportionality, the content and form of EU action should not exceed 
what is necessary to achieve the objectives of the Treaties. 

The  cost  of  achieving  the  objective  is  low.  This  is  because  EU  payment  service  providers 
have  access  to  efficient  euro  clearing  and  settlement  infrastructures.  The  proposal  would 
essentially  require  payment  service  providers  in  non-euro  area  Member  States  to  align  their 
fees  for  cross-border transactions in  euro  with  the  fees charged  for  domestic  transactions  in 
the national currency of the Member State of their payment service users (which are generally 
lower).  Euro  area  Member  States  already  benefit  from  low  cross-border  transaction  fees  for 
most  of  their  transactions.  Limiting  the  proposal  to  euro  transactions  has  no  impact  on 
payment service providers in euro area Member States, but it covers a great many transactions 
in non-euro area Member States (about 60 % of their cross-border transactions).  

In  addition,  aligning  cross-border  euro-transaction  fees  with  fees  charged  for  domestic 
transactions  in  the  national  currency  of  the  Member  State  takes  account  of  the  level  of 
development  and  efficiency  of  local  payment  systems  and  banks  (infrastructure  and 
processes).  Indeed,  production  costs  are  not  the  same  from  one  country  to  another  and,  in 
some  non-euro  area  Member  States,  even  domestic  transactions  can  cost  up  to  one  euro. 
Using  domestic  transaction  fees  as  a  benchmark  makes  it  possible  to  take  into  account  the 
specificities  of  each  Member  State  and  their  payment  service  providers.  Proportionality  is 
further discussed in the impact assessment accompanying the proposal under chapters 7 and 8. 

Extending  the  application  of  this  Regulation  to  currencies  other  than  the  euro  would  have 
clear benefits, especially in terms of the number of payments covered. However, it might also 
encourage  payment  service  providers  to  raise  costs  for  other  services,  notably  domestic 
payments,  to  cross-subsidise  cross-border  transactions  in  non-euro  currencies.  It  should 
therefore  remain  optional  for  Member  States  that  do  not  have  the  euro  as  their  currency  to 
extend  the  application  of  this  Regulation  to  cross-border  payments  denominated  in  their 
national currency. 

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3. 

STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS 

• 

Stakeholder consultations 

Stakeholders were consulted in several ways: 

 

 

 

 

an open public consultation on transaction fees took place between 24 July 2017 and 
30 October 2017 (14 weeks); 

stakeholders from industry, including representatives from different payment service 
providers, were consulted during the meeting of the payment systems market expert 
group on 24 October 2017; 

representatives of Member States were consulted at the meeting of the Commission 
expert group on banking, payments and insurance on 17 November 2017; 

the  financial  services  user  group  provided  input  and  observations  at  its  meeting  on 
5 December 2017. 

In these consultations, payment service users (consumers or businesses) all spoke of the high 
price  they  pay  for  cross-border  transactions  and  the  lack  of  transparency  of  fees  charged  to 
them. On the other hand, payment service providers clearly indicated that there was a major 
difference  between  payments  in  euro  that  were  ‘straight-through  processed’  (i.e.  processed 
automatically without manual intervention) and the far less efficient (and hence more costly) 
processing of payments in other currencies. 

Collection and use of expert advice 

• 
The Commission asked the consultancy Deloitte to conduct a study7 to gather data on the fees 
charged by the top three-to-seven banks in each non-euro area Member State and in three euro 
area  Member  States  for  cross-border  payment  transactions  covered  by  the  proposal  (credit 
transfers,  card  payments  and  cash  withdrawals).  In  addition,  Deloitte  was  asked  to  provide 
estimates for the internal costs of these transactions. The study concluded that transactions in 
euro benefited from efficient cross-border infrastructures, standards and processes that should 
allow their prices to be aligned with those of domestic-currency transactions, at much lower 
levels than the ones observed today. The study also concluded that cross-border transactions 
in  currencies  other  than  the  euro  were  still  governed  by  unmodernised  processes  without 
centralised  infrastructure.  These  processes  remained  costly,  preventing  payment  service 
providers from offering competitive pricing for these transactions. 

• 

Impact assessment 

Four policy alternatives were considered in the impact assessment which received a positive 
opinion  from  the  Regulatory  Scrutiny  Board  on  14 February  2018.  All  options  extend  the 
principle  of  equalising  the  costs  of  domestic  transactions  in  the  national  currency  of  the 
payment service user’s Member State with the cost of cross-border intra-EU transactions: 

(1) in the same national currency; 

7 

Deloitte  study  available  at  https://ec.europa.eu/info/files/180328-study-cross-border-transaction-fees-
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(2) in the same national currency and in euro; 

(3) in euro only; 

(4) in any currency of EU Member States, regardless of where they take place. 

The third option proposes to align fees for cross-border intra-EU payments in euro with fees 
for domestic transactions in the national currency of a Member State. This third option is the 
one  chosen  in  the  current  proposal.  It  has  no  impact  on  euro  area  Member  States.  For  non-
euro  area  Member  States,  it  was  found  to  be  the  most  efficient  option,  as  modern 
infrastructures  for  cross-border  payments  in  euro  are  also  available  to  all  payment  service 
providers  in  non-euro  area  Member  States.  The  third  option  was  also  found  to  be  highly 
effective because most cross-border transactions in non-euro area Member States take place in 
euro.  Moreover,  as  the  costs  of  euro  transactions  are  low,  there  would  be  a  lower  risk  of 
payment  service  providers  raising  (a)  fees  for  domestic  transactions,  or  (b)  the  costs  of 
currency  conversion  to  cross-subsidise  cross-border  transactions.  Any  such  measure  by 
payment service providers would be subject to competition rules. Finally, this third option is 
also consistent with the longer-term goal of having the euro become a common currency for 
all  Member  States.  Based  on  the  results  of  the  consultation,  acceptance  of  this  option  by 
payment service providers would also be higher than for any other option.  

According to this option, payment service providers in non-euro area Member States  would 
equalise  fees  of  cross-border  payments  in  euro  and  domestic  payments  in  the  currency  of 
those Member States. The practical implications are limited to a change in the fee tables used 
by  payment  service  providers  when  charging  their  clients.  The  direct  savings  for  payment 
service users (mainly consumers and small and medium-sized businesses — large corporates 
usually  benefit  from  negotiated  fees)  and  corresponding  decreased  revenues  for  payment 
services  providers  brought  by  this  measure  are  estimated  at  EUR  900  million  annually 
stemming from reduced fees charged on cross-border transactions in euro. Users of payment 
services  would  further  benefit  from  the  increased  transparency  in  fees  charged  for  cross-
border  transactions.  The  cost  of  hiring  supervisors  to  ensure  that  payment  service  providers 
comply with the Regulation will be negligible. 

In the long run, there are two main expected impacts. The first is the better integration of non-
euro area Member States with euro area Member States by creating a level playing field for 
small and medium-sized businesses. The second expected impact is greater equality between 
people in the EU in access to low-cost cross-border payments. 

The  impact  assessment  concludes  that  payment  service  providers  will  see  their  revenue 
decrease upon implementation of the proposal. There is a probability that these market players 
would try to recoup parts of their losses of revenues, for instance by increasing fees on other 
products and services (e.g. domestic transaction fees or account management fees). Any such 
attempts would of course be subject to national and EU competition rules. It is important to 
notice that when identical requirements were imposed on banks in euro area Member States 
following  the  entry  into  force  of  the  first  Regulation  of  2001,  this  did  not  lead  to  increased 
fees.  On  the  contrary,  fees  for  all  types  of  payments  continued  to  decrease  in  euro  area 
Member States. As regards non-euro area Member States, it should be mentioned that Sweden 
made use of the existing option in Regulation 924/2009 to extend the scope of the Regulation 

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to  Swedish  krona.  This  benefited  Swedish  consumers  and  businesses  without  damaging  the 
Swedish payments market8.  

Moreover, there is a danger that currency conversion costs could be used by payment service 
providers  to  recoup  the  revenue  losses  stemming  from  being  forced  to  align  their  euro  and 
non-euro fees. These currency conversion costs are less known by users of payment services 
and not transparent enough for users of payment services to measure. The proposal addresses 
this risk by requiring increased transparency for currency conversions. 

Following  the  positive  opinion  and  suggestions  for  improvements  from  the  Regulatory 
Scrutiny  Board,  the  impact  assessment  report  was  amended  to  describe  in  more  detail  the 
long-term  role  that  financial  technology  could  play  in  reducing  fees  for  cross-border 
payments.  The  section  in  the  impact  assessment  report  related  to  the  monitoring  and 
evaluation of the amendments contained in this Proposal was also reviewed. Finally, further 
work  was  conducted  by  Commission  services  on  transparency  in  currency  conversion.  This 
issue  is  already  covered  by  the  Payment  Services  Directive,  which  imposes  transparency 
requirements.  However,  these  requirements  should  be  made  more  specific  to  be  more 
effective  and  to  prevent  counter-measures  that  would  offset  any  cost-reduction  benefits 
achieved  by  amending  Regulation  924/2009.  The  solution  proposed  in  the  current  proposal 
consists  of  giving  a  mandate  to  the  European  Banking  Authority  to  develop  regulatory 
technical  standards  to  ensure  the  transparency  and  comparability  of  currency  conversion 
offers.  The  development  of  these  regulatory  technical  standards  will  be  based  on  a  specific 
impact assessment to be carried out by the European Banking Authority. 

Regulatory fitness and simplification 

• 
Regulation  924/2009  was  flagged  as  a  REFIT9  initiative  in  the  2017  Commission  work 
programme.  This  Regulation  had  already  been  subject  to  simplification  in  2012  through 
amendments brought by the single euro  payments  area  end-date Regulation (Regulation EU 
No 260/2012), which removed the EUR 50 000 cap  beyond which Regulation 924/2009 did 
not apply, and also removed a number of reporting obligations. 

The  proposal  will  further  enhance  the  effectiveness  of  Regulation  924/2009.  Although 
Regulation 924/2009 applied to all euro transactions in all Member States, it has not worked 
for EU citizens and businesses outside the euro area, in spite of their widespread use of the 
euro  for  cross-border  transactions.  The  proposal  will  remedy  this  shortcoming  and  finally 
allow all EU citizens and businesses to benefit from this Regulation, which had always been 
intended to benefit the entire EU and not just the euro area. 

Micro-enterprises  and  small  and  medium-sized  businesses  in  general  will  benefit  from  the 
proposal. Indeed, most small and medium-sized businesses, in particular the smallest ones, are 
unable  to  negotiate  the  fees  they  pay  for  cross-border  payments.  This  ability  is  usually 
restricted  to  larger  corporate  customers  that  benefit  from  the  cash  management  services  of 
major  banks.  The  extension  of  the  Regulation  would  therefore  benefit  small  and  medium-
sized businesses much more than larger companies. 

8 
9 

See description of the Swedish case in Annex 4 of the accompanying impact assessment report. 
The  Regulatory  Fitness  and  Performance  Programme  (REFIT)  launched  in  December  2012  is  a 
programme  aimed  to  make  EU  law  lighter,  simpler  and  less  costly  so  that  it  benefits  citizens  and 
businesses and helps to create the conditions for growth and jobs. It does not put into question the EU's 
policy objectives, but seeks for more effective ways to achieve them. 

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EU  businesses  will  become  more  competitive  as  they  will  be  able  to  reach  a  wider  pool  of 
suppliers  or  clients  at  a  lower  cost.  The  EU  economy  as  a  whole  is  likely  to  become  more 
competitive  thanks  to  closer  economic  integration  resulting  from  the  removal  of  payment 
cost-related barriers. 

4. 

BUDGETARY IMPLICATIONS 

The proposal has no budgetary implications for EU institutions. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

An evaluation of the impact of the new rules should be carried out by 31 October 2022 and 
presented  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee  and  the  European  Central  Bank.  This  evaluation  should  in  particular  look  at 
market  developments,  and  assess  the  appropriateness  of  extending  the  proposal  to  all 
currencies of EU Member States and not only the euro.  

• 

Detailed explanation of the specific provisions of the proposal 

It is proposed that the price of a cross-border payment transaction in euro within the European 
Union  should  not  be  different  from  that  of  domestic  transactions  within  a  Member  State 
conducted in the national currency of that Member State. 

Article 1(2) establishes the principle that payment service providers must align fees for cross-
border  payments  in  euro  with  those  for  corresponding  domestic  payments  in  the  national 
currency of  the payment service user’s  Member State also for Member  States  which do not 
have the euro as their national currency. 

Article 1(3)  further  clarifies  Articles  45  and  59  of  Directive  (EU)  2015/2366  on  payment 
services in the internal market related to currency conversion and introduces requirements on 
payment service providers to ensure transparency prior to a payment as well as comparability 
of  alternative  options  for  currency  conversion.  This  Article  tasks  the  European  Banking 
Authority with developing regulatory technical standards to ensure transparency and full price 
comparability of different currency conversion-service options available to users of payment 
services. 

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2018/0076 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EC) No 924/2009 as regards certain charges on cross-border 
payments in the Union and currency conversion charges 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee10, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

10 
11 

12 

Since  the  adoption  of,  first,  Regulation  (EC)  No 2560/2001  of  the  European 
Parliament and of the Council11 and subsequently Regulation (EC) No 924/2009 of the 
European Parliament and of the Council12, charges for cross-border payments in euro 
between  Member  States  of  the  euro  area  have  strongly  decreased  to  levels  that  are 
insignificant in the vast majority of cases. 

Cross-border  payments  in  euro  from  non-euro  area  Member  States  however  account 
for a very large part of all cross-border payments from non-euro area Member States. 
The  charges  for  those  specific  cross-border  payments  remain  high,  even  though 
payment service providers have access to the same efficient infrastructures to process 
those transactions at very low costs as payment service providers from the euro area. 

High charges for cross-border payments remain a barrier to the full integration into the 
single  market  of  businesses  and  citizens  in  non-euro  area  Member  States.  They 
perpetuate the existence of two categories of payment service users in the Union: on 
the one hand payment service users, the vast majority of which benefit from the single 
euro  payments  area  ('SEPA'),  and  on  the  other  hand,  payment  service  users  that  pay 
high costs for their cross-border payments in euro. 

In order to facilitate the functioning of the Single Market and end the barriers between 
payment service users in the euro area and non-euro area Member States in respect of 
cross-border payments in euro, it is necessary to ensure that charges for cross-border 

OJ C , , p. . 
Regulation (EC) No 2560/2001 of the European Parliament and of the Council of 19 December 2001 on 
cross-border payments in euro (OJ L 344, 28.12.2001, p. 13). 
Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on 
cross-border  payments  in  the  Community  and  repealing  Regulation  (EC)  No  2560/2001  (OJ  L  266, 
9.10.2009, p. 11). 

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(5) 

(6) 

(7) 

(8) 

(9) 

13 

14 

payments  in  euro  within  the  Union  are  aligned  with  charges  for  domestic  payments 
made in the official currency of a Member State.  

Currency  conversion  charges  represent  a  significant  cost  of  cross-border  payments 
when different currencies are in use in the payer's and the payee's countries. Article 45 
of Directive (EU) 2015/2366 of the European Parliament and of the Council13 requires 
transparency  of  charges  and  of  the  exchange  rate  used  prior  to  the  initiation  of  a 
payment  transaction.  When  alternative  currency  conversion  options  are  offered  at  a 
point  of  sale  or  at  an  automated  teller  machine  (ATM),  that  transparency  may  not 
allow  for  a  quick  and  clear  comparison  between  those  different  currency  conversion 
options. That lack of transparency prevents competition from bringing down costs of 
currency  conversion  and  increases  the  risk  of  payers  choosing  expensive  currency 
conversion  options.  It  is  therefore  necessary  to  develop  measures  addressed  to 
payment  service  providers  that  will  improve  transparency  and  protect  consumers 
against  excessive  charges  for  currency  conversion  services,  in  particular  when 
consumers  are  not  given  the  information  they  need  to  choose  the  best  currency 
conversion option.  

Transparency  in  currency  conversion  charges  requires  adapting  current  payment 
infrastructures and processes, in  particular  for payments  made online, at the point  of 
sale  or  for  ATM  cash  withdrawals.  To  that  end,  market  players  should  be  given 
sufficient  time  to  adapt  their  infrastructure  and  processes  in  relation  to  those 
provisions  that  relate  to  currency  conversion  charges  in  order  to  comply  with 
regulatory technical standards to be adopted by the Commission.  

Considering the technical level of the measures required for transparency in currency 
conversion  charges,  the  Commission  should  be  empowered  to  adopt  regulatory 
technical standards developed by the European Banking Authority with regard to the 
level of transparency required and the comparability of currency conversion services. 
The Commission should adopt those draft regulatory technical standards by means of 
delegated  acts  pursuant  to  Article 290  Treaty  on  the  Functioning  of  the  European 
Union and in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010 of 
the European Parliament and of the Council14.  

In  order  to  limit  consumer  detriment  before  market  players  are  required  to  comply 
with  the  transparency  measures,  it  is  appropriate  to  instruct  the  European  Banking 
Authority  ('EBA')  to  define  within  the  regulatory  technical  standard  the  level  of  a 
transitional  cap  that  should  be  applied  to  limit  charges  for  currency  conversion 
services while at the same time maintaining fair competition among payment service 
providers.  

Since the objectives of this Regulation cannot be sufficiently achieved by the Member 
States but can rather, by reason of the cross-border nature of the payments, be better 
achieved  at  Union  level,  the  Union  may  adopt  measures,  in  accordance  with  the 
principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In 
accordance  with  the  principle  of  proportionality  as  set  out  in  that  Article,  this 
Regulation does not go beyond what is necessary in order to achieve those objectives, 

Directive  (EU)  2015/2366  of  the  European  Parliament  and  of  the  Council  of  25  November  2015  on 
payment  services  in  the  internal  market,  amending  Directives  2002/65/EC,  2009/110/EC  and 
2013/36/EU  and  Regulation  (EU)  No  1093/2010,  and  repealing  Directive  2007/64/EC  (OJ  L  337, 
23.12.2015, p. 35). 
Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 
establishing  a  European  Supervisory  Authority  (European  Banking  Authority),  amending  Decision 
No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12). 

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HAVE ADOPTED THIS REGULATION: 

Article 1 

Amendments to Regulation (EC) No 924/2009 

Regulation (EC) No 924/2009 is amended as follows: 

(1)  Article 1 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

“1.  This Regulation lays down rules on cross-border payments within the 
Union”, 

(b) 

in paragraph 2, the following second subparagraph is added:  

“However  Articles 3a  and  3b  shall  apply  to  all  cross-border  payments, 
irrespective  of  whether  those  payments  are  denominated  in  euro  or  in  a 
national currency of a Member State other than the euro.”; 

(2) 

Article 3 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

“1. Charges  levied  by  a  payment  service  provider  on  a  payment  service  user  in 
respect of cross-border payments in euro shall be the same as the charges levied 
by  that  payment  service  provider  on  payment  service  users  for  corresponding 
national payments of the same value and in the official currency of the payment 
service user's Member State.”,  

(b) 

the following paragraph 1a is inserted: 

“1a. 
Charges  levied  by  a  payment  service  provider  on  a  payment  service 
user  in  respect  of  cross-border  payments  in  the  national  currency  of  a  Member 
State that has notified its decision to extend the application of this Regulation to 
its  national  currency  in  accordance  with  Article 14,  shall  be  the  same  as  the 
charges  levied  by  that  payment  service  provider  on  payment  service  users  for 
corresponding national payments of the same value and in the same currency.”,  

(c) 

(d) 

paragraph 3 is deleted, 

paragraph 4 is replaced by the following: 

“4.  Charges referred to in paragraphs 1 and 1a shall not cover currency conversion 
charges.”; 

(3) 

the following Article 3a is inserted: 

“Article 3a  

Currency conversion charges 

1. 
From  [OP  please  insert  date  36  months  after  the  entry  into  force  of  this 
Regulation], payment service providers shall inform payment service users of the 
full  cost  of  currency  conversion  services,  and  where  applicable,  those  of 
alternative  currency  conversion  services  prior  to  the  initiation  of  a  payment 

EN 

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transaction, in order that payment service users can compare alternative currency 
conversion options and their corresponding costs. To that effect, payment service 
providers shall disclose the exchange rate applied, the foreign exchange reference 
rate used and the total amount of all charges applicable to the conversion of the 
payment transaction.   

2. 
The European Banking Authority ('EBA') shall develop draft regulatory 
technical  standards  specifying  how  payment  service  providers  shall  ensure 
transparency  and  price  comparability  of  different  currency  conversion  service 
options, where those are available, to payment service users. Those standards shall 
include  measures  to  be  applied  by  payment  service  providers,  including  at  an 
ATM or point of sale, to ensure that payment service users are informed about the 
costs  of the currency  conversion  service  and  the  alternative currency  conversion 
options, where available, before the payment is initiated.  

The draft regulatory technical standards referred to in the first subparagraph shall 
also set the maximum amount of all charges allowed for the currency conversion 
services that can be applied to a payment transaction during the transitional period 
referred to in Article 3b.  Those standards shall take into account the amount of 
the payment transaction and the fluctuation in exchange rates between currencies 
of Union Member States, while securing and maintaining fair competition among 
all payment service providers The regulatory technical standards shall specify the 
measures  to  be  applied  in  order  to  prevent  payment  service  users  being  charged 
more than this maximum amount during that period. 

EBA shall submit those draft regulatory technical standards to the Commission by 
[6 months after entry into force of this Regulation] 

Power is delegated to the Commission to adopt the regulatory technical standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1093/2010 of the European Parliament and of the Council*. 

_________________________________________________________________ 

* 

Regulation  (EU)  No 1093/2010  of  the  European  Parliament  and  of  the  Council  of 
24 November  2010  establishing  a  European  Supervisory  Authority  (European  Banking 
Authority),  amending  Decision  No 716/2009/EC  and  repealing  Commission  Decision 
2009/78/EC (OJ L 331, 15.12.2010, p. 12).”; 

(4) 

the following Article 3b is inserted: 

“Article 3b 

Transitional period 

During  the  transitional  period  between  the  entry  into  force  of  the  regulatory 
technical standards referred to in the fourth subparagraph of Article 3a(2) and the 
date of application of Article 3a(1), the charges for currency conversion services 
shall  not  exceed  the  maximum  amount  set  in  the  regulatory  technical  standards 
adopted in accordance with the fourth subparagraph of Article 3a(2).”; 

(5) 

Article 15 is replaced by the following: 

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“Article 15 
Review 

By  31  October  2022,  the  Commission  shall  present  to  the  European  Parliament,  the 
Council, the European Economic and Social Committee and the European Central Bank 
a  report  on  the  application  of  this  Regulation,  accompanied,  if  appropriate,  by  a 
proposal.  That  report  shall  cover,  in  particular,  the  appropriateness  of  amending 
Article 1(2) to ensure that this Regulation covers all currencies of Member States of the 
Union.”. 

This Regulation shall enter into force on the 20th day following that of its publication in the 
Official Journal of the European Union. 

Article 2 

It shall apply from 1 January 2019. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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