Time is money in the go-slow eurozone

Europe's consumers deserve an open market for payments services and the costs should be lowered significantly, says John Purvis

I have been glad to see that the Commission has responded to complaints from MEPs and consumers about the costs and delays involved in transferring money between one member state and another.

The fact that it takes three days to move money around the EU is absolutely crazy and I think it is just banks taking advantage of the float. While it is true that charges have come down substantially in recent years, they should come down much further, particularly in the area of non-eurozone payments. There is no reason why non-eurozone transactions should cost more than those within the eurozone.

Banks say that there is little demand for intra-EU payments but I suspect that one of the reasons for this is the delay and the costs involved. If it was equally easy to make a cross-border payment as it is to make a domestic one I think you would see the level of payment increase significantly.

For example, and I have experienced this myself, small businesses have real problems exporting products around the EU. With such small invoices, by the time the money is returned to the business it has lost all of the profit, which means that it is just not worth it.

It is a chicken-and-egg scenario; if the banks offer a competitive service, businesses will take it up; if they don't then they won't. I suspect that banks would make the same amount of money even if they cut costs because business would increase. I used to work for a large international American bank - Citibank - and I can tell you that it is a good marketing ploy to provide same-day credit transfers. In fact we were one of the first banks to introduce quicker clearance for payment in the EU and in that way we actually mopped up a lot of the business that European banks should have been getting.

Banks complain that it is very difficult to align standards across member states, but from experience, I know that banks can cut through a lot of those problems if they want to. We have been talking about a single European payments area for a few years now and yet they have been introducing new technology without a thought for its compatibility with other member states. If we were really working towards compatible systems then they would be thinking about this. Banks claim to have great relationships with banks in other member states - where then are the fruits of these associations?

Internal Market Commissioner Charlie McCreevy has backed off from his original threats to legislate and force the industry to open up their payments systems, but he needs to keep his stick handy. I am all in favour of a market-driven result, but sometimes the market needs a little prodding. Look at IBAN numbers, the lengthy number supposed to make international payments easier but that no one can remember.

I have no doubt that the market would achieve the result in the end, but the Commission has a political responsibility to the internal market.

In my opinion, allowing banks their self-imposed deadline of 2010 to create a single payment area for the entire EU is somewhat generous as that is still five years away.

But if the Commission accepts their promises, it must be ready to wield that stick if they do not achieve it.

Europe's consumers deserve a vibrant, open market in payments and the banks have the resources to provide it. It is now in their hands to fulfil their promises.

• UK centre-right MEP John Purvis is a member of the Parliament's economic and monetary affairs committee.

The Commission must ensure that the New Legal Framework is not over-regulated, comments Sophie in 't Veld

As a user of financial services and working in different EU countries myself, every day I face the problems of having multiple payment services and their related costs. Any payments within the EU should be considered as if they were domestic. The development of easy, fast, cheap and reliable single European payment services is indeed of huge benefit to citizens, who should be able to reap the benefits of the single market in this area.

To comply with the Lisbon Agenda for making the European Union the most competitive and dynamic knowledge-driven economy by 2010, a fully integrated market in all its aspects is a headline goal. For this reason, we need to encourage the establishment of a Single Euro Payments Area (SEPA), which is the natural result of recent decades of European efforts. Greater efficiency of the payment system at EU level represents another key piece of the challenge to complete and deliver a more competitive and fairer market. SEPA is the means to eradicate the remaining barriers caused by the fragmentation of payment systems that dominate the European single market.

Along with the integration of the European market, the current absence of interoperability of national schemes, the presence of a fragmented legal framework for payment services, the increase of both cross-border complexity and the risk of fraud, are obvious shortcomings. A single payments area was first conceived in 2000, to complete the fully functioning single market.

Since 2002, the European Commission has been working toward the creation of a single payments market which has led to the New Legal Framework for payment in the internal market (NLF). This aims to harmonise the legal framework, facilitate SEPA, and remove both legal obstacles for the development of pan-European payment services and infrastructures and legal barriers for market consolidation.

I am pleased by the signs of co-operation between the European institutions and the banking sector. However, I note with regret that the non-banking sector payment providers have felt neglected in the drafting process. It may have to fall to the European Parliament to remedy this.

At the end of November, the European Commission will present the final New Legal Framework proposal that will stipulate the conditions to guarantee the stability of the financial system, competition, efficiency and favourable market and technology innovation, while ensuring consumer protection.

I hope that the Commission will remain consistent with its intention to deliver a framework that will not over- regulate, in line with the objectives for better regulation. I also would like to see the Commission take care to avoid setting too restrictive provisions that could prevent the development and consolidation of best practice.

Now the priority is to deliver promptly this New Legal Framework to the market. Member states' implementation by 2008 is essential - a proper implementation and enforcement of the NLF would provide the basis for legally binding instruments of the single payment area. The Commission is considering putting forward further regulations through incentive projects to support the migration to the new standards and particularly to ensure that migration to SEPA is reached by 2010, an objective with which I concur.

Finally, despite several concerns raised in relation to extending the directive's application from the eurozone to all EU currencies, which I support, it must be ensured that the directive will not jeopardise European competitiveness in the sector with respect to international providers.

• Dutch Liberal MEP Sophia in 't Veld is a member of the Parliament's economic and monetary affairs committee.

Two MEPs discuss the project of an Single European Payments Area (SEPA). Article is part of a European Voice Special Report, 'A Single European Payments Area'.