By Martin Merlin, Director, Directorate General for Financial Stability, Financial Services and Capital Markets Union, European Commission
The views expressed in this blog are solely those of the author and should not be attributed to the European Payments Council.
Financial services are an integral part of consumers' daily lives. Most European Union ( ) citizens hold savings and current accounts, use payment services and credit or debit cards; many have taken out mortgages or consumer credit. We all insure ourselves against various risks.
Following the financial crisis, the put much effort in restoring consumer confidence. Legislations such as the Mortgage Credit Directive, the Payment Accounts Directive and the revised Payment Services Directive ( ) have improved transparency, gave everyone the right to basic banking services, enhanced competition and ensured a higher level of security while making payments.
Although much has been done, the markets for retail financial services remain fragmented, for consumers and providers alike. With its Action Plan on Consumer Financial Services, the European Commission takes a further step towards a single market for financial services with better products and more choice for consumers.
The Commission is looking at ways to overcome barriers between Member States and ensure that all European consumers and firms are able to take full advantage of a true Single Market for consumer financial services. The twelve actions set out in the plan should bring us closer to a genuine technology-enabled Single Market where consumers can get the best deals while being well protected and financial services providers can easily offer their services across Europe.
Two of these actions concern payment services and aim at making transactions cheaper also for those using currencies of Member States other than the euro:
Firstly, the Commission intends to propose amendments to the Regulation on cross-border payments, ( )924/2009, to reduce the costs of cross-border transaction in all Member States. The Commission will have a detailed look at the current charges applied to transactions in currencies not covered by the Regulation on cross-border payments. The aim is to assess whether the differences between domestic and cross-border transaction fees are excessive (as reported by some payment services users) or in line with the actual costs to payment service providers.
Secondly, the Action Plan also proposes to tackle the lack of transparency in certain currency conversion practices at the point of sale or at ATMs. The Commission will look closely into Dynamic Currency Conversion practices and explore how currency conversion rates and fees can be made more transparent so that consumers can make well informed decisions when choosing their payment method abroad and benefit from healthy competition between different providers of currency conversion options.
Major breakthroughs have been achieved in recent years in payments, notably with the interchange fee Regulation and which explain that the core of the Action Plan rather focuses on retail financial services. , in particular, has opened the market to new and innovative players which, together with new developments such as mobile and instant payments, are likely to transform the payments market in the next few years.
More information on the Action Plan can be found on this page: https://ec.europa.eu/info/publications/consumer-financial-services-action-plan_en.
If you would like to comment on this article, please identify yourself with your first and last name. Your name will appear next to your comment. Email addresses will not be published. Please note that by accessing or contributing to the discussion you agree to abide by the EPC website conditions of use.