EU bank changes will save consumers €28bn

EU finance ministers have unanimously agreed banking changes estimated to save consumers and business at least€28 billion a year.

The changes, to be introduced by January 2009, will affect cross-border payments using credit and debit cards, electronic bank transfer and direct debits.

There are currently 27 different sets of rules that increase the cost of making cross-border payments by as much as 3% of GDP and make the transactions difficult.

Yesterday’s decision in Brussels paves the way for the creation of the Single Euro Payments Area.

Finance Minister Brian Cowan said that in effect an Irish resident using their Irish bank will be able to pay their electricity bill for their holiday home in Spain by direct debit rather than through a Spanish bank account.

Banks will have a maximum of one day to make the payment after receiving the order when it is between or into euro countries and no more than four days when it is between EU non-euro countries.

For the first time, both debit and credit cards will be covered, which will allow for new payment systems such as using a mobile phone, or making utility payments at the supermarket when paying by card for groceries, a Commission expert said. It will also clear the way for e-invoicing and payment, all online, with the potential savings to banks and businesses of over €100bn a year.