European Parliament facilitates money transfers and electronic payments (Alan Butt Philip)

Alan Butt Philip <alan@alanbuttphilip.org.uk>

European Parliament facilitates money transfers and electronic payments

April 24, 2009 1:08 PM

The European Parliament has adopted today by large majority two legislative proposals whose provisions may facilitate the use of money for citizens in Europe when they want to transfer money cross-border or when they want to pay electronically.

ALDE member Margarita STARKEVICIUTE (Lithuania) who was Parliament's rapporteur on the regulation on cross border payments, explains the impact of the vote: "Nowadays it is very important to restart the growth of the economy. The potential source of growth is the completion of the internal market, especially in financial services, which remain rather fragmented. The implementation of this regulation should speed up the creation of the internal market for payments - the Single Euro Payments Area (SEPA). In particular, a popular electronic payment instrument - direct debit - will become available on a cross-border basis as from November 2009. Non-Euro Member States can expand the application of this regulation for payments in national currency. "

Alan Butt Philip, lead Lib Dem candidate for Wales said: "In the longer term these new rules should help to reduce costs for all consumers. For cross-border direct debit this regulation sets a level of interchange fee at 0.088 € per transaction during a transitional period. However, the parties to the multilateral agreement are free to determine a lower amount or agree on a zero interchange fee."

In order to create a fully consistent legal framework for all electronic payment instruments in the EU and bring down barriers for cross-border business the regulation is aligned with the Payment Services Directive and clarifies that competent authorities of Member States shall ensure compliance with it and effectively deal with complaints and disputes regarding the cross-border payment fees.

The E-Money directive brings up to date the EU legislation, particularly as regards the prudential regime applicable to electronic money institutions. The emergence of new players in the market also needs to be encouraged as there are still not enough electronic money institutions. The agreement foresees an initial capital for these institutions of not less than €350.000 which is higher than the amount voted on by the ECON Committee but nevertheless improves the current situation.

As trilogues with the Commission and the Council have been successful in the run-up to today's vote, both legislative proposals are due to enter into force soon - the money transfer regulation on 1st November 2009; the E-Money directive has to be implemented 18 months after its publication.