Filenews 15 May 2022 - by Theano Thiopoulou
Travel outside Cyprus begins in view of the summer and what almost everyone who travels uses is the cards, either for the payment of the air ticket, or for purchases abroad, or to book a hotel or even to rent a car. "F" presents the main points concerning secure electronic payments, charges for the use of a card outside Cyprus, money commitment, direct debits, as well as what someone should do when they have a problem with the card, in accordance with European directives. Several issues about the use of cards can be ignored and many times the cardholder may not be aware of his rights when making transactions abroad.
A basic principle is that for a cross-border subscription in euro banks should not charge a higher commission than they would charge for an equal euro transaction within the country. For example, if the bank charges €3 every time money is withdrawn from an unconnected automatic machine of the bank that is the account, the same amount must be charged when withdrawing in another EU country. European regulations are clear. "Banks based in non-euro area EU countries are also required to apply this rule and are not allowed to charge for payments in euro to or within another EU country more 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 stores and online) across the EU."
The European Commission's website specifically states that the interest rate charge abroad throughout Europe as well as in national transactions concerns:
● Transfers 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
Banks based in non-euro area EU countries are also required to apply this rule and are not allowed to charge for payments in euro to another EU country or within it more than they charge for domestic payments in their national currency.
The European Commission also clarifies that the cardholder should keep in mind 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 shall inform of the amount of any such fee before the person concerned 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.
Charges for the use of a card
When the cardholder pays for something in the EU using the credit or debit card, merchants and banks cannot charge an extra fee - also known as the 'surcharge' - simply because a particular card has been used. This rule applies to all card purchases (in shops or online) made within the holder's country or in another EU country. But there is also a clarification. Credit and debit cards issued by tripartite schemes (such as American Express and Diners Club), as well as business or corporate credit cards for which the employer is charged, are not covered by EU rules on payment services and therefore if someone uses them they may be charged extra.
Freezing money
Sometimes, the cardholder can make a reservation, e.g. at a hotel or at a car rental company. It may be requested that the card details be provided as a guarantee for the reservation. The merchant may also request to block an amount from the card when a reservation is made. This means that the merchant holds part of the credit limit or account balance to cover any additional charge the customer may create, such as hotel room services or possible damage to a rented vehicle. The merchant must inform whether he intends to reserve an amount from the credit card, while the 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 rented car on return - the bank must immediately release the relevant amount from the credit card.
Refund
If a direct debit is found from the bank account, it can happen in error, 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.
What to do if you have a problem
If there is a problem with payments made within the EU, the cardholder should contact the bank or the card provider. They must reply in writing to the complaint within 15 days (or within a maximum of 35 days in certain exceptional cases). They must also have in place a formal complaints procedure for consumers.
If the cardholder needs something regarding the recognition of rights, they can contact FIN-NET for any problems with financial service providers, or ECC-Net for problems with merchants.
It can also report cases of discrimination on the basis of an IBAN code. This will enable the European Commission to closely monitor and contribute to the resolution of complaints about discrimination on the basis of an IBAN code that have been submitted to the competent national authority.
Card and payment fraud
EU rules limit how much you may be required to pay if you fall victim to card or payment fraud if your card or account is charged without your permission. In all cases, all you may be asked to do is pay a maximum of 50 euros against the cost of the fraudulent payment. However, in cases where the loss, theft or misappropriation of money has been done without your knowledge (e.g. interception of your account, or interception and charging of your credit card without your knowledge), you must not pay anything. The bank or card provider must cover all the costs. This rule also applies where the damage was caused by a bank employee.
Secure online payments over €30
If someone wishes to make an electronic payment of more than €30, the European Commission's website states that they 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 or password)
● Something that he has (such as mobile phone or card reader) and some completely personal feature (such as fingerprint)
● Something he knows (such as a PIN or password) and a completely personal feature (such as the fingerprint)
In this way, payments are better protected and carried out more securely.
