EU on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features - Main contents

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dossier	COM(2023)249 - Application of Directive 2014/92/EU on the comparability of fees related to payment accounts, payment account switching and ...
document	COM(2023)249
date	May 12, 2023

Annex D of Deloitte Study 1).

13 Directive 2005/60 has since been repealed and replaced by Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73–117) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32015L0849.

14 The Deloitte Study 1, EBA opinion on asylum seekers, EBA consumer trend report 2021 EBA Consumer Trend Report (europa.eu).

15 EBA-Op-2016-07 (Opinion on Customer Due Diligence on Asylum Seekers).pdf (europa.eu); and

EBA calls on financial institutions and supervisors to provide access to the EU’s financial system | European Banking Authority (europa.eu).

16 See Annex III of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. This annex contains a non-exhaustive list of factors and types of evidence of potentially higher risk referred to in Article 18(3) of that directive.

17 EBA Opinion and annexed report on de-risking.pdf (europa.eu).

18 Final Report on Guidelines on revised ML TF Risk Factors.pdf (europa.eu) and EBA Opinion and annexed report on de-risking.pdf (europa.eu).

19 https://ec.europa.eu/info/business-economy-euro/banking-and-finance/financial-supervision-and-risk-management/anti-money-laundering-and-countering-financing-terrorism_en.

20COM(2021) 420 final https://eur-lex.europa.eu/resource.html?uri=cellar:0a4db7d6-eace-11eb-93a8-01aa75ed71a1.0001.02/DOC_1&format=PDF.

21 COM(2021) 423 final https://eur-lex.europa.eu/resource.html?uri=cellar:05758242-ead6-11eb-93a8-01aa75ed71a1.0001.02/DOC_1&format=PDF.

22 Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, p. 35).

23 Five Member States have used this option (see page 72 of Deloitte Study 1).

24 Nine Member States (see for details Deloitte Study 1, page 35, Table 5). See also the EBA Report on the thematic review on the transparency and level of fees and charges for retail banking products published in December 2022 (Report on the thematic review on fees and charges.pdf (europa.eu)).

25 See page 34 of the Deloitte Study 1 for details of the fee levels for PABFs offered in the selected Member States. These show variations between zero and more than EUR 90 a year.

26 According to the Deloitte Study 1, the standard fixed fees for payment accounts (to which variable fees may need to be added) may be relatively high in some Member States (as much as EUR 160 a year), but they may be relatively low (below EUR 20 a year) in others. However, in several Member States, standard accounts with zero fixed fees are offered by at least one of the main credit institutions. Digital standard accounts are generally free of charge. Moreover, in some Member States, there may also be reduced fees for specific accounts (e.g. for young or elderly people). The fee levels of different banks within some Member States also vary considerably. Despite new entrants into the market, the fees have generally not decreased in recent years. See page 32 of the Deloitte Study 1 for more details on the ‘fee levels for standard payment accounts offered in the selected Member States’.

27 23% of consumer organisations disagreed that everyone could afford to open and use a PABF (see for details Deloitte Study 1, Annex D, Figure 14).

28 For example, Czechia, Cyprus, Greece, Lithuania. See for more details Table 4: Total number of PABF that have been opened each year of Article 27 report.

29 For example, Bulgaria, Croatia, Latvia, Poland and Romania. See for more details Table 4: Total number of PABF that have been opened each year of Article 27 report.

No information on the characteristics of consumers who have opened PABF is available in most Member States.

30 https://www.worldbank.org/en/publication/globalfindex.

31 See for more details Table 5: Number and proportion of applications for a PABF that have been refused of Article 27 report.

32 Guidelines on MLTF risk management and access to financial services.pdf (europa.eu)

33 In three Member States (see for more details Deloitte Study 1, page 76).

34 This could however change if the legislative proposal on instant payments (Proposal for a Regulation amending Regulations (EU) No 260/2012 and (EU) 2021/1230 as regards instant credit transfers in euro (europa.eu)) is adopted.

35 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a Retail Payments Strategy for the EU (COM(2020) 592 final).

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0592&rid=2.

36 ELTEG is a Commission expert group of Member States’ experts and the European Central Bank (ECB). Its main purpose is to discuss euro cash acceptance and availability. The ELTEG’s latest report of July 2022 stated that Member States should monitor ATM networks and additional cash access points at bank branches to ensure that they provide sufficient coverage, especially when such facilities are closed. It also stated that policy measures should be taken to ensure that euro cash is available.

37 See the Commission initiative on the scope and effects of legal tender of euro banknotes and coins of the 2023 Commission work programme (2023 Commission work programme – key documents (europa.eu)).

38 83% of sector organisations and 77% of consumer organisations agreed that consumers are satisfied with the services included in a PABF (The rest of the respondents' answers were “don't know”). See for more details Deloitte Study 1, page 77).

39 The EBIC common principles for bank accounts switching. The common principles for bank account switching were implemented by the end of 2009. EBIC stated that they have been implemented by all Member States. However, implementation was incomplete and inadequate. See for more details https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52013SC0127&from=EN.

40 According to Deloitte Study 1, ten Member States only had to make minor changes to their existing framework, two Member States more substantial changes and, in three Member States a new switching service was introduced (see for more details page 53).

41 These technical issues which happened in individual cases include a former account being closed before the new account becomes operational; new debit/credit cards delivered after deactivation of previous cards; and transactions made with debit cards in shops and/or direct debits charged only weeks after the transaction –resulting in debt collections.

42 For example, Denmark or France. See for more details Table 1: Number of yearly switches of Article 27 report.

43 For example, Bulgaria, Greece, Cyprus, Malta, Portugal or Romania. See for more details Table 1: Number of yearly switches of Article 27 report. The 2022 Eurobarometer survey on retail financial services and products has shown higher switching rates. https://europa.eu/eurobarometer/surveys/detail/2666.

44 For a behavioural perspective on the reasons for not switching, see the study Applying behavioural insight to encourage consumer switching of financial products - Publications Office of the EU (europa.eu).

45 The special Eurobarometer survey of 2016 on switching of financial products and services more generally reported as the two main reasons for not switching the fact that consumers are satisfied with their current provider and the fact that they have never considered switching (Financial Products and Services - July 2016 - - Eurobarometer survey (europa.eu)).

46 See page 120 of Deloitte Study 1 for more information on neo-banks.

47 The different stakeholders that were considered for the study were the following: consumers, competent authorities (national competent authorities or a competent authority at EU level), creditors/debtors (all third parties with whom consumers may have recurrent payments, direct debits or standing orders) PSPs and others (either PSPs acting collectively, national competent authorities, or EU competent authorities when it is not clear which stakeholder would be bearing the cost). See for details Deloitte Study 2, page 76.

48 These figures relate only to consumers for all options (5.1, 5.2 and 5.3). PSPs would bear most of the one-off cost (EUR 835 million) and most of recurrent costs (EUR 150 million). See page 84 of the Deloitte Study 2 for more details.

49 For the calculation of recurrent benefits for consumers, the Deloitte Study 2 has considered benefits due to spending less time to carry out a switch, benefits linked to not having to deal with an increased number of failed payments and benefits linked to potential savings in account fees for (additional) consumers who switch. See for details Deloitte Study 2, page 77.

50 A cross-border switching rate of more than 4.2% (as opposed to an estimated cross-border switching rate of 0.2%) would be required in order to break even after 20 years. See page 97 of the Deloitte Study 2 for details. The options (5.1 and 5.3) would not be considered efficient even on the basis of the higher switching rates indicated by the 2022 Eurobarometer survey on retail financial services and products.

51 PSPs would bear most of the one-off and recurrent costs. Competent authorities would only bear one-off cost (between EUR 2 and 12 million) and creditors/debtors would only bear recurrent cost (between EUR 20 and 40 million).

52 According to the Deloitte Study 2, it would not be possible to break even under these options – even with a high level of switching.

53 The one-off costs would be around EUR 22 billion for the option of a new portable account number.

54 PSPs would bear most of the one-off and recurrent costs unless this option would be implemented by replacing of all current IBANs by EU IBANs. In this case, creditors/debtors would bear more than half of one-off costs (EUR 12 billion).

55 According to the Deloitte Study 2, break-even after 20 years would require national switching rates of 8% (as opposed to an estimated actual switching rate of 1%) and cross-border switching rates of 2.4% (as opposed to an estimated actual switching rate of 0.3%).

56 42% of consumer organisations answered “no” to the question of whether EU wide portability of payment accounts would be a major game changer for switching, notably cross-border. See for more details Deloitte Study 1, page 59.

57 The figures shown by the 2022 Eurobarometer survey on retail financial services and products are slightly lower than those of the Global Findex Database 2021.

58 For example, 69 % in Romania, 84% in Bulgaria and 88% in Hungary.

59 While being vulnerable (e.g. being unemployed, having a low level of education or income) has little effect on whether or not someone has a payment account in those Member States where the percentage of people with a payment account is very high, such vulnerable people are less likely to have a payment account in those Member States with a lower the percentage of people with a payment account.

60 See also the EBA Consumer Trend Report (europa.eu).

61 The Commission and OECD-INFE publish a joint framework for adults to improve individuals’ financial skills (europa.eu).

62 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2020:590:FIN.

63 Regulation (EU) 2021/240 of the European Parliament and of the Council of 10 February 2021 establishing a Technical Support Instrument OJ L 57, 18.2.2021, p. 1–16.

64 Example of technical support project supporting financial literacy in Member States: Protecting consumers and enhancing financial literacy (europa.eu).

65 For an overview of national measures, see Financial education | European Banking Authority (europa.eu).

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