Eurocash to move faster and cheaper

New European rules are designed to cut the cost and the delay of transferring modest sums of money across national boundaries

THE United Kingdom is part of the European community whether the Eurosceptics like it or not, but the cost of moving modest amounts of money across borders has until now been prohibitive. The European Union has finally got tough with inter-bank payment systems between member countries.

Last week, officials met to conclude strict new rules on performance times, costs, and information transparency, which should become law by the end of the year. The systems in place until now have been cripplingly expensive.

Anyone wishing to send 100 Ecus, or £78, between banks in other European countries outside the UK has had to pay an average of £20 in charges, while similar payments from the UK to the Continent cost £26, one third of the sum transferred.

In one third of the cases, customers have been subject to unauthorised double charges - or deductions at the back end as well as the front. Transaction times have been unreliable, and there has been a general lack of information about the service in banks across the Union.

Traditional "Swift" telex transfers from a main clearing bank branch to a designated bank abroad can go through up to five different banks - from a customer's local branch, to an international banking centre, to the correspondent bank in the foreign country, to the central branch of the payee's bank, and then on to the local branch of the payee's bank. In such cases, transfer times spin out, and payees are left waiting for the cash.

One of the quickest of the new breed of transfer services is Eurogiro, available through Girobank. The maximum transfer time is three working days. A payment leaving on Monday will arrive on Thursday at the latest. The cost is £7.50 per transaction, with a small, published, back-end charge in some countries, for example 15 francs in France, 15 Norwegian crowns or £2.50 for payments received in the UK.

Cheaper than Giro is the Cooperative Bank's Tipanet system, at £5 per transaction and no back-end charges, taking four days maximum. Customers are not obliged to open an account to use the service - they can pay in the money in cash, or by cheque if they are prepared to wait while it clears. Girobank, on the other hand, insists on an account being opened.

From 14 April, Tipanet will introduce a direct-debit system, costing only £2.90 per transaction. Tipanet covers fewer countries than Eurogiro as yet. The Co-op's system is recommended for smaller-value transactions. Unlike Giro, Tipanet cannot give secure confirmation for large payments - it does not give invoice numbers for example.

Royal Bank of Scotland's links to nominated banks in Spain, Portugal, and soon Belgium, Denmark and the United States, enable it to provide the quickest service on the market. Transfers are immediate. To benefit, the payee must have an account at one of the nominated banks. Charges are 0.2 per cent of value per transaction, with a minimum of £7 and maximum £18.

NatWest Relay has now been launched, costing £9 with no extra charges and guaranteed maximum receipt time six days. Maximum transaction £2,000. This system also avoids potential delays in the Swift system by going a direct route.

Midland's version is called Worldpay, with transmission periods between three and six days, and a flat cost of £8. Lloyds introduced International Economy Money Mover in February, costing around £9, with a three to seven- day transmission time.