Intra-european EURO payments

 With the introduction of EU regulation in the intra-european payments market, known as regulation 2560/2001 or "EU Preisverordnung" banks in the EU were, for the first time in this field, faced with a regulatory approach to pricing for cross-border transfers.

 Regulation took part in two steps, with another extension scheduled for 2006:

1. As of July 2002, cross-border card payments in EURO up to 12.500 EUR had to be priced the same as domestic transactions.
2. As of July 2003, cross-border payments in EURO up to 12.500 EUR had to be priced the same as domestic transactions.
3. From January 2006 the amount for regulation payments is intended to be increased to 50.000 EUR.
4. The EFTA/EEA countries Iceland and Norway will fall under the regulation from January 2005, Liechtensteini is expected to follow in July 2005.

 Conditions for payments that are covered by the regulation:

• Payment must be in EURO
  this means the transaction is in EURO, even if the beneficiary holds his account in another EU currency
• Payment must be cross-border
  
• Payment must be in the EU
  means inside the EU (the EFTA/EEA countries take over the regulation in 2005) 
  new member countries as of May 2004 are also covered by the regulation
• Payment must be <= 12.500 EUR
• Payment must carry beneficiary´s IBAN (international bank account number) and BIC (SWIFT code) to allow automatic straight-through-processing
• Cheque payments are specifically not covered by the regulation

Note that the regulation does not make any provisions for specific prices, it only stipulates that domestic and cross-border payments (if covered by the regulation) must be identical in price. What does this mean in practice?

• Since domestic cash withdrawals at other bank´s ATMs in Germany carry a charge, a charge for cross-border withdrawals is OK.
  Note that this will differ in other countries who have no domestic ATM fees.
• Since use of the card at the POS in Germany carries no charge for the customer, the use of the card for purchases cross-country is also free of charge.
• If a bank prices domestic transfers on paper differently from those submitted by online banking, cross-border payments on paper and submitted online may carry different prices, too (but only those of domestic payments).

The German banks have devised the EU Standardüberweisung (EU Standard Transfer order) to handle cross-border payments covered by the regulation:

In addition to the requirements mentioned above, this transfer stipulates that costs are shared between you and the beneficiary. Since both outgoing and incoming payments may only be charged like domestic transactions, this is only of consequence where the beneficiary does not hold his account in EUR and has to pay for conversion at his bank (EU members who have not introduced the EURO as national currency, meaning Great Britain, Denmark and Sweden plus ten new members).

This page is part of www.payments-in-germany.de and copyright by Christian Bartsch

Disclaimer: All information on this site is provided "as is" without any guarantee as to its correctness, suitability for a particular transaction etc. While all reasonable care has been taken to ensure that the information is correct and up to date, no responsibility will be accepted for business transactions conducted or losses incurred due to relying solely on the information contained here. Please check with an independent source wherever possible.
Apologies for the disclaimer, but the lawyers wouldn´t have it any other way.
6/2004