Access to a bank account has become a pre-condition for participating fully in the economic and social life of a modern society and the use of cash is rapidly decreasing. In today’s world, not having access to a basic bank account makes everyday life difficult and more expensive. Everything from paying a utility bill, receiving income or benefits to purchasing goods and services becomes a challenge. Nevertheless, according to recent studies, around 30 million consumers over the age of 18 in the European Union do not have a bank account. Out of these 30 million ‘unbanked’ citizens, it is estimated that between 6 and 7 million do not have a bank account because they have been denied access to one. These individuals cannot currently benefit fully from the Single Market.
Today’s recommendation from the European Commission on access to a basic payment account will promote financial and social inclusion for consumers across Europe. The Commission invites Member States to ensure that such accounts become available at a reasonable charge to consumers, regardless of their country of residence in the EU or their financial situation. It will assess the situation in one year’s time and propose any further measures as necessary, including legislative measures.
Internal Market and Services Commissioner Michel Barnier said: “Access to a basic bank account is one of the priorities of the Single Market Act. It has the potential to improve the lives of millions of Europeans. It is important to put an end to practices that exclude people from access to such a basic and essential service, and thus enable them to participate fully in the society they live in and to enjoy the benefits of the Single Market.
Key elements of the proposal
Access to a suitable payment account: The Commission Recommendation to Member States clearly sets out the fundamental principles that should be put in place at national level to guarantee access to suitable payment services. It considers that any consumer residing in the Union, irrespective of his financial circumstances, should have the right to open and use a basic payment account, even in a Member State where he does not permanently reside.
Characteristics of a basic payment account: The Recommendation specifies which payment services a basic payment account should and should not include. It should enable the holder to receive, deposit, transfer and withdraw funds. It should also allow the execution of direct debits and credit transfers, but does not include overdraft facilities.
Reasonable Price: Ensuring access to basic payment services should not only be about granting a right. To guarantee adequate pricing conditions enabling consumers to actually access basic payment accounts, the Recommendation sets out the principle that, if the account is not provided for free, the charges requested by the payment service provider should be reasonable. Each Member State should determine what constitutes a reasonable charge, taking into consideration criteria such as the national income level, the average charges for payment accounts or the total costs of the provision of the basic payment account.
Designated Payment Services Providers: Most payment services providers – mostly banks – provide payment accounts. This Recommendation does not specify which category of payment service provider or which particular payment service providers should make the product available to consumers at national level. It is indeed left to the discretion of each Member State to decide which provider(s) should offer the product within their jurisdiction. Member States are thus free to designate one, several or even all payment services providers as basic payment account providers.
Finally, the Commission encourages Member States to launch campaigns raising public awareness of the availability of such basic payment accounts, their pricing conditions, the procedures to be followed in order to exercise the right to access basic payment accounts and the methods for having access to an out-of-court complaint and redress mechanism. It also asks Member States to compile reliable statistics related to basic payment accounts so as to ensure a better monitoring of the situation.