Finance Watch welcomes the Review of EU’s regulation on cross-border payments by the European Commission that would make cross-border payments cheaper within the EU and better inform users of dynamic currency conversion services.
Choosing not to cover money transfers from EU to non-EU countries in the regulation review is, however, a missed opportunity: The extremely high average money-transfer industry fee of 7% on remittances remains untouched, even though these costs erode much needed financial flows towards developing countries.
Finance Watch’s Policy brief shows that migrant families in Europe pay 3.6 billion Euros in unjustified extra charges per year when sending money to the families in their home country – more than the entire European emergency aid annual budget (ECHO).
In its 2017 consultation on transparency and fees in cross-border transactions in the EU the European Commission announced that its 2018 review would engage the EU’s weight in the battle towards reaching United Nations Sustainable Development Goal (SDG) Number 10. It appears today that the Commission’s ambition has fallen short of this goal: Even if EU citizen’s transactions will now be protected from abuses,the right to fair transaction costs of up to 35 million Europe residents continues to be ignored.
In this Policy brief, Finance Watch urges the European Commission to consider solutions to remove the many barriers to a fair competition on money-transfersand improve the quality of life of millions:
- Develop a targeted EU strategy to ensure that migrants are not excluded and that they are guaranteed access to a basic payment account;
- Investigate and remove competition barriers, including exclusivity agreements that limit access to distribution and payment systems;
- Introduce a 3% cap on fees as part of a regulation on remittances designed to improve user protection and ensure the proper functioning of the market.
- Finance Watch Press release “Cross-border payments: Missed opportunity to put a cap on money-transfer fees and help tackle inequality worldwide”, 28 March 2018
- Finance Watch response to the European Commission’s public consultation on transparency and fees in cross-border transactions in the EU, 30 October 2017
- Infographic: We Could Stop Money Transfer Rip-Off, 28 March 2018: