As of 1 January 2015, cross-border transfers in euro and crediting of euro into accounts are to cheapen to the domestic transfers' level. This is suggested by information from all commercial banks operating in Lithuania on payment service fees after the adoption of the euro. In addition, the clearing of the so-called non-express transfers in Lithuania will take place on an hourly basis.
"The cross-border transfers in euro of all banks as of the New Year will cheapen to the domestic transfers' level. It will not only be much cheaper to transfer to the current 18 euro area Members States, but the countries of the entire European Economic Area (EEA) as well, thus, to Norway, Iceland and Lichtenstein," Marius Jurgilas, member of the Board of Lietuvos bankas, claims.
Based on the information presented by commercial banks, the cost of non-express transfers, initiated through the Internet, to banks operating in Lithuania or other EEE countries as of 1 January will vary from EUR 0.23 to EUR 0.43. For comparison: currently, an international transfer in euro through the Internet mainly costs LTL 40, in some cases the fee reaches even LTL 60.
The international transfer fees in euro will be affected by the EU Regulation, which lays down that cross-border payments in euro shall not cost more than similar domestic transfers.
After the euro adoption, the requirements will also affect charges for the crediting of funds, hence cross-border crediting of accounts in banks in Lithuania for transfers in euro will have to cheapen to the domestic crediting charges level. Banks indicated they would mainly apply a EUR 0.35 charge. Currently the banks' fee for crediting funds in euro into bank accounts in Lithuania from EEE countries varies between LTL 5 to LTL 30.
"The cheapening by a few dozen times of the cross-border transfer and crediting of funds services following the euro adoption is a good news for families in Lithuania, who receive funds from relatives abroad and parents of students studying in other countries, who send funds for their studies. In addition, this is also relevant in terms of compensation of employees, where Lithuanian citizens are paid their wages into their account in a Lithuanian bank in euro or Lithuanian enterprises pay employees in euro in EEE countries", says M. Jurgilas.
According to him, the cheapening fees for cross-border transfers in euro will also help Lithuanian users to save in purchasing from abroad and paying for their purchases by payment order.
In the assessment of Lietuvos bankas, the fall in the fees for cross-border transfers in euro to the existing fees for domestic transfers at the banks in operation in the country will allow the population and enterprises to save up to 0.06% of GDP. In 2015 this amount would make LTL 80 million (EUR 23 million).
According to Bank of Lithuania statistics, both personal transfers abroad from Lithuania and from abroad to Lithuania have been increasing every year. According to the BOP data, private transfers to Lithuania amounted to LTL 5.3 billion in 2013, LTL 2.2 billion in the first half of that year, and LTL 2.7 billion over the first half of 2014.
Over the three quarters of 2014, the number of cross-border payments, which are dominated by payments in euro, increased by 16 per cent year on year.
Moreover, LTL 585.1 million of compensations of employees were received from abroad in 2013, while in the first half of 2014 — about LTL 189.9 million. They were not necessarily compensations in euro alone; this statistics, among other things, includes the revenue, which is being received or transferred (or brought up) by Lithuanian citizens seasonal workers or those working in other countries for less than a year.
The adaptation of the retail payment system of Lietuvos bankas, whose participants are all banks operating in the country, the Central Credit Union and a few independent credit unions, to payments in euro as of the New Year has widened its functionality as well: it will provide new opportunities for the users of the system. First of all — payments will be effected much more frequently. Instead of the currently four clearings per day, they will take place on an hourly basis nine times per day.
"Execution of customer's ordinary payment instructions in euro every hour will significantly reduce the requirement of more expensive express transfers," says M. Jurgilas.
In addition, as of 1 January 2015, the retail payment system will operate until 5 p.m. and therefore even at 4 p.m. it will be possible to execute payment orders electronically submitted to a payment service provider on the same day.
http://www.euras.lt/en/news/after-the-adoption-of-the-euro-transfers-both-faster-and-cheaper
