An actionable summary of how European Union Regulations impact the working capital, and how an organisation should plan its next steps to drive the regulation.
Earlier, individual inter-geographical transactions meant an additional cross-border fees. However, recent changes by the EU has led to amendment of the cross-border fees to create a bucket-full of cross-border business opportunities. The key features of the regulation include: From January 1, 2019, the Payment Service Providers should charge the same fee for the cross-border transactions as they charge for domestic transactions. However, Europe market is yet to comply to this regulation, and based on the current payment behavior, Europe market is divided in the following zones: Zone 01 : 19 countries which have eliminated the concept of cross-border fees. Zone 02 : 8 countries in EU are yet to integrate their payment systems. They are currently operating in their local currencies Zone 03 : 1 country in Eurozone(Sweden) is still using local currency but has eliminated cross-border fees Cross-border payments could come up with high fees. A recent report by Deloitte</a reveals that the cross-border bank charges could vary as a minimum of 4.55 pounds to a maximum of 11.37 pounds in UK(which is a Zone 2 country).
Transparency in Dynamic Currency Conversion Customers could choose paying with the foreign currency or their local currency. The EU regulation on cross-border payments enables visibility in the Dynamic Currency Conversion process which earlier had many hidden charges. Possibilities of Business† Expansion Customers are allowed to pay negligible cross-border fees would encourage a seamless expansion of your business across boundaries. Greater Savings on the† Customer Side Customers could save on a greater extent through this regulation. A report by Deloitte reveals that cross-border bank charges in UK could range even up to 11.37 pounds. Savings on the customers end would enhance their experience as well. Next Steps: How to drive compliance
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