Cross-Border Payments Regulation (CBPR)

In September 2009, the European Parliament issued Regulation (EC) No 924/2009, with the aim of facilitating cross-border transactions within the European Union by ensuring that charges for cross-border payments in euro between Member States of the Euro area are equal to charges for domestic payments in euro. However, non-euro area Member States did not enjoy the same benefits of this Regulation and euro payments in such Member States remained costly. This has created significant obstacles in the full integration of the internal market for businesses and citizens within non-euro area Member States.

Regulation (EU) 2019/518 amends Regulation (EC) No 924/2009 and its main objective is the equalisation of charges between cross-border payments in euro and the corresponding national payments in the national currency. This ensures that cost savings are enjoyed by both euro and non-euro area Member States. These provisions became applicable as from 15 December 2019.

The amended Regulation also aims to achieve full transparency of currency conversion charges by standardising the way such charges are displayed. In this regard, total currency conversion charges are to be expressed as a percentage mark-up over the latest available euro foreign exchange reference rates issued by the European Central Bank (ECB) on a broadly available and easily accessible electronic platform.

As from April 2020, prior to the initiation of a card-based transaction either at point of sale (POS) or at an ATM machine which involves a currency conversion, the service provider needs to disclose to the payer the following information:

  • inform the payer of the option to pay in the currency used by the payee;
  • the amount to be paid in both the currencies of the payer and the payee is to be displayed;
  • the percentage mark-up and the amounts to be paid in both currencies are to be made available on a durable medium.

In addition, for online credit transfers which involve a currency conversion, the payment service provider shall disclose the following:

  • the estimated currency conversion charges applicable to the credit transfer;
  • the estimated total amount of the credit transfer in the currency of the payer, including any transaction fees and any currency conversion charges, and the estimated amount to be transferred to the payee in the payee's currency.

As from 19 April 2021, card issuers are required to send an electronic message containing the percentage mark-up, immediately after receiving and authorising a payment denominated in another EU currency either from a point of sale or from an ATM machine. The electronic message should be sent to the payer once a month for future payments denominated in the same currency. The information must be provided to the payer free of charge and through an easily accessible channel. The payment service provider must provide the user the possibility of opting out of such electronic messages.

Regulation (EC) No 924/2009 was substantially amended several times and, in the interests of clarity and rationality, such Regulation was codified into Regulation (EU) 2021/1230. The Central Bank of Malta issued CBM Directive No. 20 on Cross-Border Payments which stipulates that the Bank remains the competent authority for the purpose of Regulation (EU) 2021/1230.