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EU set to adopt new payment card rules

European Union citizens will be able to pay bills anywhere in the 27-country bloc using cards and credit transfers from a single bank account under rules due to be adopted by finance ministers on Tuesday.

The aim of the single euro payments area or SEPA is to increase competition in the financial sector, cutting costs and increasing choice for consumers. „Unless the sky caves in on us, we will have a compromise on this in the council (of ministers),” a diplomat said on SEPA. The European Commission, which proposed the measure, expects SEPA to save the EU economy €50-100 billion a year by making a cross-border transaction just as cheap as a purely domestic one. A new pan-EU payments system based on common technical standards would end the current national patchwork, making it easy for new entrants to offer payment services competing with banks cross-border.

„A more efficient and competitive payments market will also mean that individual Europeans pay less for basic banking services, the average yearly cost of which ranges from €34 to as much as €252 across the EU,” the Commission said. The rule would apply to all EU states and currencies. It gives legal underpinning to the single euro payments area system the banking industry aims to start in January 2008 and replace national systems with from 2010. EU states and the European Parliament have joint say on the measure, which will cost banks billions of euros to put into practice. EU lawmakers have requested some last-minute changes, such as on the amount of time for which a payments firm can grant credit. ( economictimes.indiatimes.com)