Filenews 21 November 2021 - by Theano Thiopoulou
Travelling abroad does not stop, either for business reasons or because of the upcoming festive season, despite any problems caused by the pandemic, and for this reason it is always useful for citizens to know how their cards are charged abroad and what rights they have as consumers, travelling across borders. "F" presents in this text the main points concerning secure electronic payments, charges for the use of a card outside Cyprus, freezing of money, direct debits, as well as what someone should do when he has a problem with the card.
A basic principle is that for a cross-border withdrawal in euro, banks should not charge a higher fee than they would for an equivalent euro transaction within the country. For example, if the bank charges us €3 each time we withdraw money from an out-of-network machine of our bank, the same amount must be charged when we withdraw to another EU country. European regulations are clear. "Banks headquartered in NON-euro area EU countries also have to apply this rule and are not allowed to charge for payments in euro to or within another EU country than they charge for domestic payments in their national currency. No additional charges are allowed for card, credit or debit payments. This applies to all card purchases (in shops and online) across the EU."
The same interest rate for equivalent national transactions shall relate to:
● Transfers of funds between bank accounts held in different EU countries
● Withdrawals from cash machines (ATMs) in EU countries
● Payments by debit or credit card across the EU
● direct debit transactions
The cardholder should be aware that if he pays in an EU currency other than the euro, the card provider may charge a currency conversion fee when the card is used in another country. However, the card provider, the bank, the merchant or the website carrying out the transaction must inform of the amount of any such fee before the interested party agrees to the purchase. The card provider must provide information on the fees in the terms and conditions of the card on an easily accessible electronic platform, such as a website or application.
Cheques are not accepted
EU rules on bank charges in international and national payments do not apply to cheques. Sometimes there are very high transaction fees for cashing a cheque from another EU country. Also, in many countries cheques are no longer accepted as a means of payment.
Card fraud and payments
EU rules limit how much you may be required to pay if you become the victim of card fraud or payments if your card or account is charged without your permission. In all cases, all you may be asked to do is to pay a maximum of 50 euros against the cost of the fraudulent payment.
However, in cases where the loss, theft or embezzlement of money has been done without the knowledge of its owner (e.g. interception of the account or interception and debit of the credit card without your knowledge), you must not pay anything. The bank or card provider must cover all the costs. This rule also applies if the damage was caused by a bank employee.
Freezing money on your card
Sometimes, when a reservation is made, e.g. at a hotel or a car rental company, the card details may be requested as a guarantee for the reservation. The merchant can also ask you to block an amount from the card when you book. This means that the merchant keeps part of the credit limit or account balance to cover any additional charge that may arise, such as hotel room services or possible damage to a hired vehicle. The merchant must inform if he intends to block any amount from the credit card, while the cardholder - customer, will have to give the approval for this, as well as the exact amount to be blocked. Once the payment is completed, e.g. when you use the credit card on departure from the hotel to pay the room, or when you pay the relevant bill when returning the rented car, the bank must immediately release the relevant amount from your credit card.
Direct debits
If a direct debit is found from the bank account, this can happen by mistake, e.g. if you cancelled a contract with the supplier. In such cases, you are entitled to a refund within 8 weeks. This applies to all direct debits, both within your home country and to cross-border direct debits within the EU.
Secure online payments over €30
If someone wishes to make an electronic payment of more than €30, he/she should use a combination of at least two identification elements, such as:
● something he has (such as a mobile phone or card reader) and something he knows (such as a PIN number or password)
● something that has (such as a mobile phone or card reader) and some completely personal feature (such as a fingerprint)
● something he knows (such as a PIN number or password) and some completely personal feature (such as a fingerprint)
In this way, payments are better protected and conducted more securely.
What to do if you have a problem
If there are problems with payments made within the EU, the consumer should contact his bank or the card provider. They must reply in writing to the complaint made within 15 days (or within a maximum of 35 days, in some exceptional cases). They must also have established a formal complaint procedure for consumers. If the customer- consumer needs assistance in the recognition of his rights, he can contact FIN-NET for any problems with financial service providers or ECC-Net for problems with merchants.
Which cards are not covered by the EU
When you pay for something in the EU using your credit or debit card, merchants and banks cannot charge an extra fee – also known as an 'extra charge' – just because you used a particular card. This rule applies to all card purchases (in shops or online) made within your home country or in another EU country. Credit and debit cards issued by tripartite systems (such as American Express and Diners Club), as well as business or corporate credit cards, for which the employer is charged instead of you, are not covered by EU rules on payment services, so if you use them you may be charged additionally.
