Banks across the EU, including in Britain, have lobbied against legislation.
The British Bankers Association said this week that the legislation would force many banks to drop cross-border cash transmission for small sums completely because charges would never cover costs.
The proliferation of cash machines and credit cards has made it easy to get cash from a bank on demand virtually anywhere in the EU, but sending money from bank to bank can take days and cost between pounds 5 and pounds 30.
Another complaint is that payment can be delayed by correspondent banks abroad and that receiving banks often levy their own charges despite the sending bank saying it would handle all costs.
The Commission argues that such measures run counter to the spirit of the single market and that voluntary improvement by banks has failed. 'We have to show consumers that the single market is a reality, that it is effective and strong,' said Vanni d'Archirafi, the Commissioner responsible for the internal market, yesterday.
The measures will be presented to industry ministers at the end of the month. The Commission acknowledges that there will be more lobbying from the banks, which are being asked to begin implementing the measures voluntarily.
The proposed law will give banks six days to make a transfer, unless they have struck a different arrangement with the customer. Double charging will be illegal. The bank initiating the transaction will be liable for ensuring that the money reaches its destination.
The Commission has estimated that 200 million separate cross-border transactions of less than pounds 1,500 are made every year. As a sweetener to the industry, the Commission said it would interpret EU competition rules generously to allow banks to group together to create systems offering a transfer service with the maximum price fixed.
In response to industry complaints that most of their costs are due to the high notification charges made by the central banks, the Commission is also negotiating for payments of less than ecu2,000 not to appear on statistical statements.Reuse content