Banks should charge equally for cross-border payments in euro and domestic payments and make currency conversion costs transparent, according to new rules issued by the European Union.

The European Parliament has rubber-stamped new rules to end discrimination against payment service users in the EU outside Euroland. Whereas consumers in Euroland benefit from the single euro payments area or SEPA, those living outside continue to pay high costs for cross-border payments in euros.

Before the end of the year, charges for cross-border payments in euros within the EU must come into line with charges for national payments made in the official local currency (the ‘same charge’ rule). EU states are free to impose rules on banks to apply the same charges to cross-border and domestic non-euro payments.

The new measures will also protect consumers from being charged arbitrary costs for currency conversions. At each transaction, the bank in question will inform a consumer about the amounts to be paid in the local currency and the currency of his account. To make conversion costs easier for him to see, it will express currency conversion charges in the same way as other banks do for payments at point of sale or at a cashpoint.

Each consumer will receive an electronic push notification such as a text message, e-mail or notification through the payer's mobile or web banking application about the applicable currency conversion charges. The bank in question has to offer these notification services free of charge. The bank will also have to estimate and divulge the full cost of currency conversion in the case of bank transfers before the payment is made.

Eva Maydell, a European politician, said in the European Parliament: "150 million EU citizens...outside the Eurozone have been paying much higher charges for transferring euros than their Eurozone counterparts. This will no longer be the case and all Europeans will pay significantly lower charges, which will save them more than €1 billion annually. This is the second, small EU revolution after the abolition of roaming fees. It is a huge step forward to completing the single market for payments."