It’s not the first time we’ve celebrated good political decisions coming out of the European Union. After European policymakers put more transparency for international payments into law, they are now keen to tackle other flaws in the payment system.
Last week, the European Commission set out their ambitions for retail payments in Europe: making payments cheaper, faster, convenient and more transparent for consumers - a mission that the TransferWise team have been working towards since 2011.
Today, 25% of transfers via TransferWise arrive in under 20 seconds, but unfortunately, that’s far from being the norm. Encouraging more banks to adopt instant payments will make this a reality for more people.
However, that would only solve one part of the problem. The other issue is systemic. There is plenty of competition in the financial sector from newer players, like TransferWise, for consumers to see. But behind the scenes, the banks still hold a monopoly on access to the payment infrastructure in Europe.
The European Commission has now put a question mark next to that monopoly. Consumers can benefit from instant payments quicker and more universally when non-banks like TransferWise can directly participate in payment systems. Read all about it here.
Transparency has been one of the key pillars of our mission here at TransferWise, a goal we share with the World Bank, who cite a lack of transparency as the main reason the cost of remittances remain high. Today, the average cost of remittances is 6.82%. The TransferWise average is 0.7%. Lowering that cost to under 3% of the amount sent overseas globally is considered so crucial, it’s part of the United Nations Sustainable Development Goals.
The European Commission has now committed to playing its part in achieving that goal and we can only encourage them to hold banks to account when they are overcharging and under-communicating.
You can too. If you want to hold your bank to account and get involved in campaigning for more transparency globally, sign up here.
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