In today's world, European citizens cannot fully participate in society without a basic bank account. Bank accounts have become an essential part of our everyday life, allowing us to make and receive payments, shop online, and pay utility bills (telephone, gas, electricity). However, according to reliable studies, around 58 million EU consumers over the age of 15 still do not have a payment account.
Whilst Single Market legislation has ensured that banks can operate throughout the European Union and offer their services cross-border, this mobility is not mirrored for citizens who are often unable to open an account in another Member State or to easily switch from one bank to another. Furthermore, consumers often pay above the odds for the services they receive from their bank and struggle to have clarity on the various fees charged.
In order to address these issues, the European Commission adopted on 8 May 2013 a proposal for a Directive on the transparency and comparability of payment account fees, payment account switching and access to a basic payment account (more information: press release). The European Parliament and the Council have reached on 20 March 2014 political agreement on the Commission proposal (read more: the Statement ). The Directive was formally adopted on 23 July 2014 (Directive 2014/92/EU).
The Directive is a major step towards a real single market for retail financial services bringing numerous benefits to EU citizens. By providing for a right to a basic payment account irrespective of a citizen's place of residence or financial situation, the obstacles faced by many in accessing basic banking services across borders are removed. The Directive also substantially improves the transparency of bank account fees and makes it easier to switch a bank account from one bank to another.
The Directive tackles three principal areas:
Access to bank accounts: these provisions provide all EU consumers, even those that are not resident of the country where the bank is located and irrespective of their financial situation, with a right to open a bank account that allows them to perform essential operations, such as receiving their salary, pensions and allowances or payment of utility bills etc.
Comparability of bank account fees: by making it easier for consumers to compare the fees charged for bank accounts by providers in the EU.
Bank account switching: by establishing a simple and quick procedure for consumers who wish to switch their bank account to one with another provider within the same Member State and to assist consumers who hold a bank account with a bank and want to open another account in a different country.