Direct debit from home account to pay bills anywhere in the EU

Europeans will be able to pay their bills by direct debit from anywhere in the EU. A scheme that lets companies withdraw payments directly from a customer’s account in another EU country has been launched. Holiday home owners, students and retirees living abroad are among those who stand to benefit.

Previously, europeans could only pay its bills recurring services like utilities, phone and magazine subscriptions by direct debit if the company was in the same country as the customer’s bank. But under the new scheme, more than 2 500 banks now offer direct debiting across national borders.

The new system, in which the 27 EU nations and five other countries (Iceland, Norway, Switzerland, Liechtenstein and Monaco) will participate, is an important step towards a truly integrated EU economy. This direct debit system is supported by new rules to ensure that it can be done as easily and securely from one country to another as at home.

More will soon follow: all banks in eurozone countries must introduce cross-border direct debiting by November 2010. Non-eurozone banks have until November 2014. Thus, eventually customers will be able to rely on just one home bank account and one bank card for all banking services anywhere in the EU.

This improvement in borderless banking is in addition to the one which has been recently approved, which will make bank account switching easier thanks to an European Banking Industry Committee (EBIC) proposal. Customers should soon find it easier to switch to another bank in their country. Banks have agreed that the new bank should assist the customer in closing the old account and transferring the balance. Most national banking associations have adopted the standard.