The European Commission has put forward a proposal modifying the provisions and extending the scope of the 2001 Regulation on cross-border euro payments, under which cross-border bank transfers in euro within the EU cost the same as domestic transfers. The aims of this initiative are to replace the existing Regulation in order to adapt it to market developments (emergence of the Single Euro Payments Area), to enhance the protection of consumer rights and to provide an adequate legal framework for the development of a modern and efficient payment system within the EU.

The overall objective of the review of the Regulation is to achieve an Internal Market for payment services in euro, subject to effective competition and where there is no difference of regime between cross-border and national payments, thereby providing significant savings and benefits to the wider European economy.

Cross-border payments in euro require a Community-wide approach because the applicable rules and principles have to be the same in all Member States in order to achieve legal certainty and a level playing field for all European payments market stakeholders.

The proposal extends the principle of equality of charges to direct debit payments, which will become available on a cross-border basis as from November 2009. As is already the case with credit transfers, ATM cash withdrawals and card payments, the cost of a cross-border direct debit in euro will become the same as the cost of a national direct debit.

The proposal also provides for the setting-up of out-of-court redress bodies responsible for solving disputes related to cross-border payments, thereby enhancing the protection of consumer rights in this field. The proposal also aims at phasing out certain statistical reporting obligations relating to balance of payments, thus alleviating administrative and financial burdens and facilitating the implementation of the Single Euro Payments Area (SEPA).

This Regulation will apply to cross-border payments up to the amount of 50,000 € which are denominated in euro or in the currencies of the Member States which do not have the euro as currency wishing to extend the  application of this Regulation to their currency.

The proposal is the final result of the review process of Regulation 2560/2001, carried out by the Commission since 2005 and finalised with the publication of a Report in February 2008. The Report had concluded, in particular, that Regulation 2560/2001 should be modified to take account of the emergence of the Single Euro Payments Area, to address some weaknesses identified during the review process and to align it with the Payment Services Directive (2007/64/EC) in order to create a fully consistent legal framework for payments in Europe.

The new Regulation, if agreed upon by the European Parliament and the Council, would replace the existing text as from November 1st 2009.