March 29, 2018 04:00 AM
Individuals looking to make cross border transactions into or out of countries within the eurozone may be set to benefit from lower fees in future if proposals put forward this week by the European Commission go ahead.
Under current rules, citizens of eurozone member states enjoy low or no fees for currency international currency transfers within the bloc, but this is not the case for transactions to or from non-eurozone or non-EU. For example, a person sending euros from France to Belgium would not incur a fee, but sending the same transaction to the UK would.
At the moment, the European Commission noted that additional costs for some simple activities such as a credit transfer can be “exorbitant” in non-euro area member states. For example, it noted that some consumers may be required to pay up to €24 in fees for a transfer of just €10.
These fees are a barrier to the EU’s single market goals, the body stated, as they create additional obstacles to households and businesses looking to conduct cross-border activities such as buying goods or services in another currency zone. As a result, there is a major gap between euro area residents who are able to benefit from the single currency and non-euro area residents, who can only make cheap transactions within their own country.
The draft measures will also aim to cut these fees down to just a few euro – or even a few cents – in order to bring these transactions in line with intra-eurozone transfers. The proposals also include new rules for transparency and competition to currency conversion services when consumers are buying goods or services in a different currency than their own.
Valdis Dombrovskis, vice-president responsible for financial stability, financial services and capital markets union at the European Commission, said: “With today’s proposal we are granting citizens and businesses in non-euro area countries the same conditions as euro area residents when making cross-border payments in euro. All Europeans will be able to transfer money cross-border, in euro, at the same cost as they would pay for a domestic transaction.”