Sending and receiving euro (SEPA) transfers

Legacy_user

As noted in other threads, a French bank (for example) has to charge the same fee to transfer euro from Paris to Liverpool (for example) as it does to transfer euro from Paris to Calais: in practice, free. Once the euro get to Liverpool, the UK receiving bank can convert them to GBP at whatever rapacious rate it likes, but must inform its customer of that rate. All this applies in the Single Euro Payment Area (SEPA), which is the EU countries plus Switzerland and a couple of others.

UK banks therefore have to charge the same fee to transfer euro from Liverpool to Paris as they do to transfer euro from Liverpool to Manchester. The UK domestic equivalent to a SEPA credit transfer is a BACS euro transfer. BACS euro transfers are free, or minimal charge, but UK banks don't publicise them (at least for private customers), and most bank staff won't know they exist.

As is noted in the helpful Treasury guidance
http://www.hm-treasury.gov.uk/euro_business_cross_border_payments.htm
some UK banks claimed (absurdly) that the UK equivalent was the legacy, expensive, CHAPS. However, CHAPS euro payments seem to have been abolished.

Citibank offers a euro current account. Their price list quotes a rapacious fee of £10 for an outgoing SEPA transfer, but, as percivjr reported here
http://forums.moneysavingexpert.com/showpost.html?p=25137291&postcount=15
citi is 'temporarily' suspending this fee. Citi have told me that their lawyers are working on a loophole. Citi are attempting to argue that BACS euro transfers are not the UK equivalent of a SEPA Credit Transfer, for various absurd reasons, such as that SEPA uses IBAN, and BACS doesn't. And meanwhile Citi have removed (free) BACS euro transfers from their price list.

If Citi get away with this, the effect will be that UK banks can evade the EC regulations on fees for payments in euro, because UK banks claim that there is no domestic equivalent to a SEPA Credit Transfer.

Currently Nationwide Flexaccounts cannot receive SEPA Credit Transfers. Flexaccounts can receive euro only by the legacy SWIFT system, because it is necessary to quote two BICs, one for HSBC as intermediary, and one for Nationwide. Flexaccount holders currently find it difficult or impossible to get payers in the rest of the SEPA to understand this. Nationwide have told me that they hope to be SEPA-compliant from 1 November 2009, but I have been unable to get confirmation of this.

The UK government can make the regulations apply equally to transfers in GBP. They consulted the banks about whether they should, and, surprise surprise, the banks said no. And, surprise surprise, the UK government accepted that. So UK banks will continue to make absurd charges for transfers in GBP by the legacy SWIFT system (because companies transferring large sums think £25 is unimportant, and don't protest). In contrast, banks in the rest of the EU have been nudged to introduce cheap, automated, SEPA Credit Transfers for transfers in euro.

alicemary

Just the topic I was looking for, thanks

Any idea which banks in the UK will allow a large transfer to a eurozone account, with SEPA, and without charging for the transfer?

I can see Halifax charge 9.50 and Barclays charge 25!
Totally illegal, but a hassle to pay and claim back...

97trophy

alicemary wrote: »

Any idea which banks in the UK will allow a large transfer to a eurozone account, with SEPA, and without charging for the transfer?

Try one of the many fx brokers.

I use XE.com

System

According to xe.com 's website, they offer free transfers of euro to France, Germany, Italy, Netherlands and Spain. To other countries, they offer 'wire' (ie, legacy 'SWIFT') transfers of euro for a fee of 17 euro. This is inconsistent with the spirit of the EC regulations. However, it may be consistent with the letter of the regulations, since (presumably) xe.com would charge 17 euro to anyone who (weirdly) used them to transfer euro to a UK bank account.

Newly_retired

Just came across this thread and thought it might be the place to ask a question about a regular payment I receive from France, a small govt pension of about £25 per month. I checked with my bank ( A & L ) and they receive it in sterling and there are no charges. IS this the whole truth, I am wondering, or has it already passed through some other bank with a fee? Any ideas? Any ways of finding out?
Another side issue is whether it has been taxed at source. I can't seem to find this out either. Although I had lots of paperwork from France before it was all set up, I have had nothing at all since then.

System

Possibly this should be a new thread under Pensions! I too receive a pension via a French CRAM. Their (unpublicised) current practice is to get their French bank to convert the pension to GBP (at a fair rate, in my experience), and to instruct a British bank to pay the GBP amount via BACS. Confusingly, they ask for the (irrelevant) BIC and IBAN to set up this payment; the French bank deduces UK sort code and account number from these. At my request, my CRAM now instead makes a SEPA credit transfer in euro. (French) income tax is not taken off at source, but social security contributions may be, though UK residents are normally exempt from these. You can register to see your last three payments in euro at retraite.cnav.fr

Newly_retired

Many thanks for a really useful answer.

System

BACS is withdrawing BACS euro transfers from 1 November 2009. Therefore, there will no longer be any domestic benchmark for the cost of transferring euros, and banks will charge what they think the market can bear for SEPA Credit Transfers. The UK Government has thus successfully prevented UK consumers from getting any benefit from the EC regulations on cross-border transfers. Ho hum.

moniker_2

On the other hand the relatively new FasterPayments system has the technical ability to make payments in any currency, although only GBP had been activated at its introduction.

I regularly make a number of small euro payments for subscriptions and the like to other EU countries. My bank (HSBC) currently charge £15 for such payments (which no doubt uses the SEPA system as HSBC is one of the heaviest UK proponents of it) which is about twice the cost of the actual amount I pay to the supplier. That is silly.

The UK bank that will voluntarily offer SEPA payments at the same or similar cost as a GBP BACS or FasterPayments payment will get me as their customer, not only for my personal accounts but also for my businesses.

If I can't find one I intend to have a chat with HSBC in Malta about opening accounts with them.

weliot

Thank you very much YoungNick for the very useful information. I've just had a SEPA transfer from France (La Poste) to my Nationwide Flexaccount rejected. The person I spoke to on the Nationwide SWIFT helpline (01793 655752) told me there was no trace of the payment being received at Nationwide so it must have been rejected by the Intermediary Bank (HSBC: MIDLGB22). She also said that she had never heard of SEPA! Do you have any details of someone who knows about SEPA at Nationwide? Nationwide still doesn't seem to be SEPA-compliant.

Olipro

The problem is with the sending bank, they probably had a spaz when they saw the intermediary bank differed from the BIC, I can assure you that Flexaccounts *can* recieve SEPA payments.