WHAT IS THE AIM OF THE REGULATION?
Regulation (EU) 2021/1230 codifies the rules within the European Union (EU) on:
- cross-border payments1
- the transparency of currency conversion charges.
Regulation (EU) 2024/886, which requires payment service providers2 that provide standard credit transfers in euro to offer the service of sending and receiving instant payments in euro, amends and adapts Regulation (EU) 2021/1230 to this change.
KEY POINTS
The regulation applies to cross-border payments denominated in:
Charges3 for cross-border payments in euro or in the national currency of participating Member States should be the same as for corresponding payments within a Member State.
Payment service providers must offer the following information free of charge to payers making card-based transactions:
- before the transaction is made, information on the total currency conversion charges as a percentage mark-up over the European Central Bank’s latest euro foreign exchange rates, in a comprehensible and easily accessible manner;
- after the transaction is made, details of the transaction, sent electronically without undue delay.
Before a payer makes an online credit transfer, payment service providers must offer clear, neutral and comprehensible information on the total amount of the transfer, including any transaction fees and currency conversion charges.
Currency conversion services
Parties providing currency conversion services at a cash machine or at the point of sale must provide customers with the following information in a clear and accessible manner before a transaction is made:
- the total currency conversion charges as a percentage mark-up;
- the amount to be paid in both the payer’s and the payee’s own currencies and the possibility of paying in either.
Customers and suppliers of goods and services applying the regulation to make and receive payments use their international bank account number (IBAN) and the payment service provider’s bank identifier code (BIC).
Member States must:
- designate national authorities to monitor and ensure compliance with the legislation;
- establish procedures for payment service users and others to submit complaints;
- provide for adequate and effective out-of-court complaint and redress procedures;
- ensure cooperation between their national authorities, particularly in solving cross-border disputes;
- apply penalties for violations of the legislation.
Instant credit transfers
Regulation (EU) 2024/886 amends Regulation (EU) 2021/1230 and requires that charges applied to payers and payees for cross-border instant credit transfers in euro do not exceed the charges applied for cross-border non-instant credit transfers in euro. This requirement prevails in situations where the application of other requirements of Regulation (EU) 2021/1230 would otherwise lead to the outcome that charges for cross-border instant credit transfers in euro exceed the charges applied for cross-border non-instant credit transfers in euro.
Repeal
The regulation repeals Regulation (EC) No 924/2009.
FROM WHEN DOES THE REGULATION APPLY?
- Regulation (EU) 2021/1230 has applied since 19 August 2021. A Member State that does not have the euro as its currency and that decides to extend the application of this regulation to its national currency is required to notify the Commission accordingly.
- Amending Regulation (EU) 2024/886 has applied since 8 April 2024.
BACKGROUND
The single euro payments area aims to ensure that:
- making electronic payments in the euro area is as easy as making cash payments;
- no extra charges are involved when making an electronic euro payment from one Member State to another.
Directive (EU) 2015/2366 requires the charges and exchange rate used in cross-border payments to be transparent. It also specifies the information to be given to customers (see summary).
For further information, see:
KEY TERMS
- Cross-border payments. Electronic wholesale and retail payments where the payer and the recipient are in different Member States.
- Payment service provider. A company that enables businesses to accept credit or debit card and digital wallet in-person and online payments.
- Charge. The direct or indirect cost linked to a payment transaction.
MAIN DOCUMENT
Regulation (EU) 2021/1230 of the European Parliament and of the Council of 14 July 2021 on cross-border payments in the Union (codification) (OJ L 274, 30.7.2021, pp. 20–31).
Successive amendments to Regulation (EU) 2021/1230 have been incorporated into the original text. This consolidated version is of documentary value.
RELATED DOCUMENTS
Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, pp. 35–127).
See consolidated version.
