European Union (EU) finance ministers
have agreed on the final terms of the Payment Services Directive
(PSD), a fundamental part of the EU’s plans to create a single
market for financial services and boost competition within Europe’s
payment industry.

The legislation, covering all EU nations and currencies, will
remove legal barriers to the implementation of the Single Euro
Payments Area (SEPA) and will make cross-border payments – by
credit card, debit card, electronic bank transfers and any other
means – as cheap as domestic transactions. The law will also make
it easier for non-bank payment providers to expand their businesses
and compete with banks across Europe.

The European Commission estimates the annual cost of making
payments between national systems at 2 percent to 3 percent of

Consistent implementation required

Charlie McCreevy, European Commissioner for Internal Market and
Services, said: “The introduction of the first SEPA instruments is
now less than ten months away. This unanimous agreement sends
signals that will be well received by all those, and there are
many, who believe in SEPA and have already invested massively in
it. Easy and quick cross-border payments will bring massive savings
to the EU economy and real, practical benefits to consumers.”

Peter Ayliffe, president and CEO of Visa Europe, said:
“[Today’s] agreement is an important milestone towards SEPA. But we
should not lose sight of the next phase, the implementation of this
complex piece of legislation in the member states. To ensure that
SEPA is a success, we need consistent implementation across all EU
countries. To deliver the benefits of an internal market in
payments, the industry needs legal certainty. Should member states
fail to achieve this, the payments market will remain a fragmented
patchwork of national rules.”

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The European Parliament is expected to vote on the PSD at its
plenary session on 24 April in Strasbourg. This could pave the way
for final adoption by mid-2007.