On 1 November 2009 the European Union introduced new regulations governing payments within Europe, as part of the Payment Services Directive (PSD).  These new regulations have been brought in to standardise the process and the associated charges in making cross border payments in the EEA.

Which countries are affected?

The following is a list of current PSD participating countries and corresponding currencies:

How does it affect me?

As part of World First’s service, we have always automatically elected to cover any intermediary or receiving charges that might be taken by the banks within the EEA. This ensured the full amount of your payment arrived in the beneficiary account.

Under the new regulations we, World First, or any other banking institution within the EEA, will be unable to elect to cover the receiving charges.  However on the upside, the beneficiary banks are now restricted in the level of charges they can apply and in most cases we do not think these banks will levy any charges. The new legislation is designed to bring more transparency to the payment process.

Banks are now required to:

• Credit all beneficiary accounts on the working day the instruction is received
• Credit the account with the full amount being transferred

In the event that a bank does charge to receive a cross-border payment, the bank must have pre-agreed a fee for this service with the beneficiary.  In addition, all charges levied by the receiving bank should be detailed on the beneficiary’s statement and not deducted from the amount..

One other benefit of the legislation is that it has created a new classification of financial services firm: Payment Institutions.  World First is proud to have been one of the first firms to be authorised by the FSA as a Payment Institution.  While we were already applying most of the rules and policies this introduces, the Payment Services Directive provides further safeguards for your funds under law.