Regulation 2021/1230 - Cross-border payments in the Union (codification) - Main contents

EN

Official Journal of the European Union

L 274/20

Regulation (EC) No 924/2009 of the European Parliament and of the Council (4) has been substantially amended several times (5). In the interests of clarity and rationality, that Regulation should be codified.

For the proper functioning of the internal market and in order to facilitate cross-border trade within the Union, it is essential that the charges for cross-border payments in euro are the same as for corresponding payments within a Member State.

It is not advisable to apply the principle of equality of charges for payment instruments which are mainly or exclusively paper-based, such as cheques, since, by their very nature, they cannot be processed as efficiently as electronic payments.

The principle of equality of charges should apply to payments initiated or terminated on paper or in cash which are processed electronically in the course of the payment execution chain, excluding cheques, and to all charges linked directly or indirectly to a payment transaction, including charges linked to a contract. Indirect charges include charges for setting up a permanent payment order or fees for using a payment card or debit or credit card, which should be the same for national and cross-border payment transactions within the Union.

In order to prevent the fragmentation of payment markets, it is appropriate to apply the principle of equality of charges. For that purpose, a national payment having the same characteristics as, or very similar characteristics to, the cross-border payment should be identified for each category of cross-border payment transaction. It should be possible, inter alia, to use the following criteria to identify the national payment corresponding to a cross-border payment: the channel used to initiate, execute and terminate the payment, the degree of automation, any payment guarantee, customer status and relationship with the payment service provider, or the payment instrument used, as defined in point (14) of Article 4 of Directive (EU) 2015/2366 of the European Parliament and of the Council (6). Those criteria should not be considered to be exhaustive.

Competent authorities should issue guidelines to identify corresponding payments where they consider it necessary. The Commission, assisted, where appropriate, by the Payments Committee established by Article 85(1) of Directive 2007/64/EC of the European Parliament and of the Council (7), should provide adequate guidance and assist the competent authorities.

In order to facilitate the functioning of the internal market and to avoid inequalities 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 payments in euro within the Union are aligned with charges for corresponding national payments made in the national currency of the Member State in which the payment service provider of the payment service user is located. A payment service provider is considered to be located in the Member State in which it provides its services to the payment service user.

Currency conversion charges represent a significant cost of cross-border payments when different currencies are in use in the Member State of the payer and the Member State of the payee. Article 45 of Directive (EU) 2015/2366 requires the charges and the exchange rate used to be transparent, Article 52, point (3), of that Directive specifies information requirements with regard to payment transactions covered by a framework contract and Article 59(2) of that Directive covers the information requirements for parties offering currency conversion services at an automated teller machine (ATM) or at the point of sale. It is necessary to provide for additional measures in order to protect consumers against excessive charges for currency conversion services and to ensure that consumers are given the information they need to choose the best currency conversion option.

The measures to be implemented should be appropriate, adequate and cost-effective. At the same time, in situations in which the payer is confronted with different currency conversion options at an ATM or at the point of sale, the information provided should make comparison possible, to allow the payer to make an informed choice.

To achieve comparability, currency conversion charges for all card-based payments should be expressed in the same way, namely as percentage mark-ups over the latest available euro foreign exchange reference rates issued by the European Central Bank (ECB). A mark-up might have to be based on a rate derived from two ECB rates in the case of a conversion between two non-euro currencies.

In accordance with the general information requirements concerning currency conversion charges laid down in Directive (EU) 2015/2366, providers of currency conversion services should disclose information on their currency conversion charges prior to the initiation of the payment transaction. Parties that offer currency conversion services at an ATM or at the point of sale should provide information on their charges for such services in a clear and accessible manner, for example by displaying their charges at the counter, or digitally on the terminal, or on-screen in the case of online purchases. In addition to the information referred to in Article 59(2) of Directive (EU) 2015/2366, those parties should provide, prior to the initiation of the payment, explicit information on the amount to be paid to the payee in the currency used by the payee and the total amount to be paid by the payer in the currency of the payer’s account. The amount to be paid in the currency used by the payee should express the price of the goods or services to be bought and might be displayed at the check-out rather than on the payment terminal. The currency used by the payee is in general the local currency, but according to the principle of contractual freedom might in some cases be another Union currency. The total amount to be paid by the payer in the currency of the payer’s account should consist of the price of the goods or services and the currency conversion charges. In addition, both amounts should be documented on the receipt or on another durable medium.

With regard to Article 59(2) of Directive (EU) 2015/2366, where a currency conversion service is offered at an ATM or at the point of sale, it should be possible for the payer to refuse that service and to pay in the currency used by the payee instead.

In order to enable payers to compare the charges of currency conversion options at an ATM or at the point of sale, the payers’ payment service providers should not only include fully comparable information on the applicable charges for currency conversion in the terms and conditions of their framework contract, but should also make that information public on a broadly available and easily accessible electronic platform, in particular on their customer websites, on their home-banking websites and on their mobile banking applications, in an easily understandable and accessible manner. This would cater for the development of comparison websites to make it easier for consumers to compare prices when travelling or shopping abroad. In addition, payers’ payment service providers should remind payers about the applicable currency conversion charges when a card-based payment is made in another currency, through the use of broadly available and easily accessible electronic communication channels, such as SMS messages, e-mails or push notifications through the payer’s mobile banking application. Payment service providers should agree with payment service users on the electronic communication channel through which they will provide the information on currency conversion charges, taking into consideration the most effective channel for reaching the payer. Payment service providers should also accept requests from payment service users to opt out of receiving the electronic messages containing information on the currency conversion charges.

Periodic reminders are appropriate in situations in which the payer stays abroad for longer periods of time, for example where the payer is posted or studies abroad, or where the payer regularly uses a card for online purchases in the local currency. An obligation to provide such reminders would ensure that the payer is informed when considering the different currency conversion options.

It is important to facilitate the execution of cross-border payments by payment service providers. In that respect, standardisation should be promoted as regards, in particular, the use of the international payment account number identifier (IBAN) and the business identifier code (BIC). It is therefore appropriate that payment service providers provide payment service users with the IBAN and the BIC for the account in question.

In order to guarantee the continuous, timely and efficient provision of balance-of-payments statistics in the framework of the Single Euro Payments Area (SEPA), it is desirable to ensure that it remains possible to collect readily available payments data, such as the IBAN, the BIC and the amount of the transaction, or basic, aggregated payments data for different payment instruments, if the collection process does not disrupt the automated payments processing and can be fully automated. This Regulation does not affect reporting obligations for other policy purposes, such as for the prevention of money laundering or terrorist financing, or for fiscal purposes.

Competent authorities should be empowered to fulfil their monitoring duties efficiently and to take all necessary measures to ensure that payment service providers comply with this Regulation.

In order to ensure that redress is possible where this Regulation has been incorrectly applied, Member States should provide for adequate and effective complaint and redress procedures for settling any dispute between the payment service user and the payment service provider. It is also important that competent authorities and out-of-court complaint and redress bodies be designated.

It is essential to ensure that the competent authorities and out-of-court complaint and redress bodies within the Union actively cooperate for the smooth and timely resolution of cross-border disputes under this Regulation. It should be possible for such cooperation to take the form of an exchange of information regarding the law or legal practice in their jurisdictions, or of a transfer or takeover of complaint and redress procedures if appropriate.

It is necessary that Member States lay down effective, proportionate and dissuasive penalties in national law for failure to comply with this Regulation.

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. In order to allow Member States which do not have the euro as their currency to extend the application of this Regulation to cross-border payments denominated in their national currency, a notification procedure should be provided for.

The Commission should submit to the European Parliament, to the Council, to the ECB and to the European Economic and Social Committee a report on the application of the rule equalising the cost of cross-border payments in euro with the cost of national transactions in national currencies and on the effectiveness of the information requirements on currency conversion set out in this Regulation. The Commission should also analyse further possibilities, and the technical feasibility of those possibilities, of extending the equal charges rule to all Union currencies and of further improving the transparency and comparability of currency conversion charges, as well as the possibility of disabling and enabling the option of accepting currency conversion by parties other than the payer’s payment service provider.

Since the objectives of this Regulation cannot be sufficiently achieved by the Member States but can rather, by reason of the scale or effects of the action, 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,

‘cross-border payment’ means an electronically processed payment transaction initiated by a payer, or by or through a payee, where the payer’s payment service provider and the payee’s payment service provider are located in different Member States;

‘national payment’ means an electronically processed payment transaction initiated by a payer, or by or through a payee, where the payer’s payment service provider and the payee’s payment service provider are located in the same Member State;

‘payer’ means a natural or legal person who holds a payment account and allows a payment order from that payment account, or, where there is no payment account, a natural or legal person who gives a payment order;

‘payee’ means a natural or legal person who is the intended recipient of funds which have been the subject of a payment transaction;

‘payment service provider’ means any of the categories of legal persons referred to in Article 1(1) of Directive (EU) 2015/2366 and the natural or legal persons referred to in Article 32 of that Directive, but excludes those institutions listed in points (2) to (23) of Article 2(5) of Directive 2013/36/EU of the European Parliament and of the Council (8) benefiting from a Member State waiver exercised under Article 2(5) of Directive (EU) 2015/2366;

‘payment service user’ means a natural or legal person making use of a payment service in the capacity of either payer or payee, or both;

‘payment transaction’ means an act, initiated by a payer or by or through a payee, consisting of placing, transferring or withdrawing funds, irrespective of any underlying obligations between the payer and the payee;

‘payment order’ means an instruction by a payer or payee to its payment service provider requesting the execution of a payment transaction;

‘charge’ means any amount levied on a payment service user by a payment service provider that is directly or indirectly linked to a payment transaction, any amount levied on a payment service user by a payment service provider or a party providing currency conversion services in accordance with Article 59(2) of Directive (EU) 2015/2366 for a currency conversion service, or a combination thereof;

‘funds’ means banknotes and coins, scriptural money and electronic money as defined in Article 2, point (2), of Directive 2009/110/EC of the European Parliament and of the Council (9);

‘consumer’ means a natural person acting for purposes other than his or her trade, business or profession;

‘micro-enterprise’ means an enterprise, which, at the time of conclusion of the payment service contract, is an enterprise as defined in Article 1 and Article 2(1) and (3) of the Annex to Commission Recommendation 2003/361/EC (10);

‘interchange fee’ means a fee paid between the payment service providers of the payer and of the payee for each direct debit transaction;

‘direct debit’ means a payment service for debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis of the payer’s consent given to the payee, to the payee’s payment service provider or to the payer’s own payment service provider;

‘direct debit scheme’ means a common set of rules, practices and standards agreed between payment service providers for the execution of direct debit transactions.

the amount to be paid to the payee in the currency used by the payee;

the amount to be paid by the payer in the currency of the payer’s account.

an evaluation of the way payment service providers apply Article 3 of this Regulation;

an evaluation of the development of volumes and charges for national and cross-border payments in national currencies of Member States and in euro since the date of adoption of Regulation (EU) 2019/518 of the European Parliament and of the Council (12), namely, 19 March 2019;

an evaluation of the impact of Article 3 of this Regulation on the development of currency conversion charges and other charges related to payment services, both to payers and payees;

an evaluation of the estimated impact of amending Article 3(1) of this Regulation to cover currencies of all Member States;

an evaluation of how providers of currency conversion services apply the information requirements laid down in Articles 4 and 5 of this Regulation and the national laws implementing Article 45(1), Article 52, point (3), and Article 59(2) of Directive (EU) 2015/2366 and whether those rules have enhanced the transparency of currency conversion charges;

an evaluation of whether and to what extent providers of currency conversion services have faced difficulties with the practical application of Articles 4 and 5 of this Regulation and the national laws implementing Article 45(1), Article 52, point (3), and Article 59(2) of Directive (EU) 2015/2366;

a cost-benefit analysis of communication channels and technologies that are used by, or are available to, providers of currency conversion services and that can further improve the transparency of currency conversion charges, including an evaluation of whether there are certain channels which payment service providers should be required to offer for the sending of the information referred to in Article 4; that analysis shall also include an assessment of the technical feasibility of disclosing simultaneously the information referred to in Article 4(1) and (3) of this Regulation, prior to the initiation of each transaction, for all currency conversion options available at an ATM or at the point of sale;

a cost-benefit analysis of introducing the possibility for payers to block the option of currency conversion offered by a party other than the payer’s payment service provider at an ATM or at the point of sale and to change their preferences in that regard;

a cost-benefit analysis of introducing a requirement for the payer’s payment service provider, to apply, when providing currency conversion services in relation to an individual payment transaction, the currency conversion rate applicable at the moment of initiation of the transaction when clearing and settling the transaction.