EU gives everyone the right to bank accounts

The EU has passed a directive which will give all people living in Europe access to a bank account and allow consumers to more transparently compare bank fees.

The Payment Account Directive is, according to the EU, aimed at guaranteeing access to basic payment services and improving information on fees related to payment accounts.

It said it had found many European consumers faced difficulties in opening a payment account due to their lack of a permanent address in the member state where the services provider was located. More than 58m EU citizens, out of 507m, do not have a bank account.

It also found that citizens without a payment account were excluded from important aspects of life in their country.

“They may encounter substantial difficulties with receiving their salary or social security payments, they cannot transfer money or execute transactions other than cash-based ones and are excluded from any type of online transaction or purchase, which can be cheaper,” it said. “As a result, they often face higher costs and larger risks as they can only use cash. The directive aims to solve these issues.”

The new directive provides all EU consumers, without being residents of the country where the credit institution is located, and irrespective of their financial situation, with a right to open a payment account that allows them to perform essential operations, such as receiving their salary, pensions and allowances or pay utility bills. It makes it easier for consumers to compare the fees charged for payment accounts by payment service providers in the EU.

MEP Sean Kelly said: “In Ireland, it is estimated that around 100,000 adults do not have bank accounts. It is an alarming figure considering how essential bank accounts are to enable a citizen to have a full economic and social life, especially as card transactions are overtaking cash for safety and practical reasons.

“Payment accounts have become a part of our daily lives; many now pay all their household utilities, rent and other bills online or receive payments that way.”

Mr Kelly said, once the law is signed off by the European Parliament, member states will have two years to implement the new rules.