By Lena Unbehauen - 11th September 2006
The European parliament has backed plans for new EU rules that will speed up cross-border financial transactions.
In a decision that is likely to be welcomed by consumers – if not necessarily the banking sector – parliament’s economic and monetary affairs committee endorsed the European commission’s proposal for a payment services directive.
The new rules will open up the market for cross-border transactions to greater competition, a move that the commission hopes will make them cheaper and faster.
EU retailers had feared that the commission’s proposals would be watered down by MEPs after intense lobbying from the banking sector, which was pushing for a transaction time of three days.
The commission’s original proposal was for a time limit of one working day, but a compromise of two days was agreed in committee.
Centre-right MEPs welcomed the decision as a “big step” towards a common European payments area – which in turn is expected to drive growth in cross-border shopping and worker mobility.
But some deputies expressed concerns that the proposal would still favour big banking groups because of the requirement to control a certain level of capital.
“Keeping the level of capital requirement low is vital if new payment systems and medium sized remitters are not to be squeezed out of the market by the big banks,” said Liberal MEP Sharon Bowles.
“I am disappointed that more was not done,” she added
The European consumers’ union BEUC has also criticised the document as too lax. “Banks still enjoy too much discretion to decide when to penalise consumers following the loss or theft of a payment card,” said BEUC director Jim Murray.
The scope of the directive is reduced to transactions among EU-based providers and in member states currencies only, he added.
MEPs said they hoped that the proposal would be adopted by the full plenary at first reading, scheduled for October, in order to ensure that the single payments area would be up and running by 2010 at the latest.
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