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).

 

Countries covered by the regulation:

Country	Regulation 2560/2001 applies?
Andorra	No
Belgium	Yes
Denmark	Yes (for payments in EURO)
Deutschland	Yes
Estonia	Yes (for payments in EURO)
Finland	Yes
France	Yes
Greece	Yes
Great Britain and Northern Ireland	Yes (for payments in EURO)
Ireland	Yes
Iceland	Yes (EEA member, not EU member)
Italy	Yes
Liechtenstein	Yes (probably from July 2005) (EEA member, not EU member)
Lithuania	Yes (for payments in EURO)
Luxemburg	Yes
Latvia	Yes (for payments in EURO)
Monaco	No (has introduced EURO cash but is not a EU member)
Malta	Yes (for payments in EURO)
Netherlands	Yes
Norway	Yes (EEA member, not a EU member)
Austria	Yes
Poland	Yes (for payments in EURO)
Portugal	Yes
Switzerland	No (not a EU member)
Sweden	Yes (for payments in EURO and SEK)
Spain	Yes
Slovenia	Yes (for payments in EURO)
Slovakia	Yes (for payments in EURO)
San Marino	No
Czech Republic	Yes (for payments in EURO)
Hungary	Yes (for payments in EURO)
Vatican	No (has introduced EURO cash but is not a EU member)
Cyprus	Yes