EUROPEAN COMMISSION Regulatory Scrutiny Board. Opinion

Transcription

1 Ref. Ares(2018) /02/2018 EUROPEAN COMMISSION Regulatory Scrutiny Board Opinion Brussels, Ares(2018) Title: Impact Assessment / Charges on cross-border (version of 17 January 2018) Overall opinion: POSITIVE (A) Context Fees are the same for cross-border and national in Euro that originate from anywhere in the Eurozone. This standard fee structure promotes transparency and the Single Market. The regulated fee structure has lowered fees for Euro transactions that originate in the Eurozone. By contrast, making and receiving that originate outside the Eurozone, whether in Euros or in other European currencies, may carry high and variable fees even for small transactions. The nine Member States that do not use the Euro can choose whether to extend the EU regulation to their local currency. To date, Sweden is the only country to do so, though Romania has completed preparatory work. This impact assessment considers extending the standard fee structure to non-euro Member States for cross border in Euro and in local currencies. (B) Main considerations The Board notes the overall good quality of the impact assessment and takes into account the announced intention of the services to further enhance it. The Board gives a positive opinion, but considers that the report could be improved with respect to the following key aspects: (1) The report does not sufficiently analyse the problem drivers. (2) The descriptions of objectives and intervention logic (including success criteria) are not consistent with proposed future monitoring and evaluation. (3) The report does not explain why the currently small market share of online and fintech services would not be able to grow enough to address the problem in the future. Note that this opinion concerns a draft impact assessment report which may differ from the one adopted. Commission européenne, B-1049 Bruxelles - Belgium. Office: BERL 6/29. regulatory-scrutiny-board@ec.europa.eu

2 (C) Further considerations and adjustment requirements (1) Problem drivers/scope The report would gain if it further clarified the extent to which the policy intervention aims to address a market failure, a regulatory failure or equity considerations. It would benefit from analysing the precise nature of the regulatory failure that it identifies as a problem driver. The problem driver of lack of fairness can be further examined, too. These equity considerations should refer to underlying differences in payment infrastructure, resulting in different transaction costs for the payment service providers. (2) Objectives/impacts/monitoring The report's sections on objectives/intervention logic (including success criteria) and evaluation/monitoring could be revised, in order to better separate objectives from immediate policy outcomes and to facilitate future evaluations. Regarding the expected impact of the proposed options, it would be very valuable to include data on the increase in the number of cross-border transactions after the equalising of fees by Regulation 924/2009. These time series data would not just underline the merit of the proposed initiative, but also be an important baseline for the future evaluation of the proposed amendment. (3) Problem definition The report could further enhance the readers' understanding of the magnitude and expected evolution of the problem by further describing the role of innovative market solutions (online services/fintech). Currently fintech solutions occupy only a small share of the market and are only available for cross-border credit transfers, but not for cash withdrawals and card. This status quo may change in the future. Innovative market players might devise solutions to fill that niche too, i.e. the market might be able to reduce transaction costs. A discussion to which extent these market-based solutions do or do not deliver on the (sub-)objectives, and in particular address the different aspects of the identified market failure, would strengthen the argumentation. (4) Options The report could be improved by further motivating and further developing the proposed options. Proposing different solutions for cross-border transactions in Euro and in local currencies together (i.e. as part of one option) would have merit. While equalizing fees makes sense for transactions in Euro, an intermediate level of fees may be suitable for transactions in local currencies. The consideration to combine separate solutions for crossborder transactions in local currencies is especially important because the currently preferred option does not contribute at all to one of the objectives, i.e., modernizing payment infrastructures. Similarly, the report could explain why the proposed options, especially those that exclude local currency transactions, are not complemented with soft measures to enhance transparency, for example by requiring a fee calculator (that would not only include charges on cross-border transactions but also currency conversion fees). The report could give more reason for the rejection of such soft measures, especially as they could contain a shift of excessive fees to other transactions to compensate for lost revenue. The report should clarify whether the restriction to Euro- in the preferred option does not raise the risk that non-euro Member States remain in the "high cost trap" 2

3 described on page 19 of the impact assessment. Finally, the report needs to clarify whether the extension of Regulation 924/2009 to local currencies remains an option under the preferred option that equalises fees only for crossborder transactions in Euros. The Board takes note of the quantification of the various costs and benefits associated to the preferred option of this initiative, as assessed in the report considered by the Board and summarised in the attached quantification tables. (D) RSB scrutiny process The lead DG shall ensure that the report is adjusted in accordance with the recommendations of the Board prior to launching the interservice consultation. The attached quantification tables may need to be adjusted to reflect any changes in the choice or the design of the preferred option in the final version of the report. Full title Reference number Date of RSB meeting Impact assessment report (IA) on amendments to the Regulation (EU) No 924/2009 on cross-border in the Community, 2017/FISMA/ February 2018 (Written procedure) 3

4 ANNEX: Quantification tables extracted from the draft impact assessment report submitted to the Board on 18 January 2018 (N.B. The following tables present information on the costs and benefits of the initiative in question. These tables have been extracted from the draft impact assessment report submitted to the Regulatory Scrutiny Board on which the Board has given the opinion presented above. It is possible, therefore, that the content of the tables presented below are different from those in the final version of the impact assessment report published by the Commission as the draft report may have been revised in line with the Board s recommendations.) I. Overview of Benefits (total for all provisions) Option 3 Description Amount Comments Reduced fees for crossborder in euro. Increased transparency Equality between eurozone and noneurozone payment services users for crossborder in euro Low fees for crossborder Direct benefits EUR 900 million (61.5% of the maximum benefits) coming from the reduced fees for cross-border in euro from non-eurozone Member States Not quantifiable. May impact the perception of payment services users about fees charged for transactions crossborder. May impact the number of transactions done as lack of transparency cited as an obstacle to cross-border Not quantifiable. Better integration of non-euro Member States into the Union and with eurozone Member States. Indirect benefits EU's image Not quantifiable but similar, though on a smaller scale, to the Roaming Regulation Recurrent benefit for services users (consumers, SMEs). Corporates not covered as benefitting from negotiated fees already. Same beneficiaries. Recurrent Impact on EU society recurrent. Level playing field for EU SMEs. Equality between EU citizens II. Overview of costs Preferred option Reduced fees for crossborder Direct costs Indirec t costs Payment Services Users Oneoff Payment Services Providers Supervisors Recurrent One-off Recurrent One-off Recurrent For PSUs if revenue Substantive compliance costs: EUR 900 million Enforcement costs for supervisors: EUR for all 28 MS. First 3 years. 4

5 Increased transparen cy Direct costs Indirec t costs losses are rebalanced Administrati ve cost: EUR 1.5 million for adaptation of fee documentati on. Enforcement cost from increased complaints handling: EUR for all 28 MS. Phasing out on 3 years 5