Regulators said a law halting extra fees on transferring euros in the European Union has cut prices 90% without increasing the cost of domestic transfers, bolstering efforts to build a regional payment system.
The cost of transferring €100 ($129) within the euro zone has fallen to €2.50, from €24 in July 2003, according to the EU executive agency in Brussels. Banks had said the December 2001 law banning some fees would force them to raise prices on domestic transactions, to subsidize a small number of international payments. Today's report rebuts similar arguments against a current initiative to unify payment networks and replace domestic-only systems by 2010. „The price of cross-border payments has reduced dramatically in many countries, but, contrary to what had been feared, the price of domestic payments has not gone up,” Financial Services Commissioner Charlie McCreevy said in a statement.
The industry-led project known as the Single Euro Payments Area would harmonize transaction protocols to make euro transactions seamless throughout the 27-nation EU. The euro is the official currency of 13 of the countries. „By using fully automated payment systems that are of lower cost, this project has enormous potential to bring about huge savings and we fully support it,” McCreevy said today. McCreevy has pushed the financial industry to stick to its target of creating the system by 2008. He's also urging governments to approve proposed rules that are necessary for the cross-border system. Some banking industry representatives are also calling on governments to help the effort by switching payments to the SEPA network as soon as possible. (Bloomberg)