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Unpleasant Surprise Post-Brexit: A New Bank Fee for SEPA Payments

By January 28, 2021No Comments

NeuGroup members confront a fee for payments from UK to EU accounts that lands on beneficiaries.

Treasurers are still learning the full impact of the UK’s recent Brexit deal, and several who attended a recent NeuGroup European Treasury meeting shared their reaction to a banking fee that took some of them by surprise.

  • Some corporates making SEPA (single euro payments area) payments from accounts in the UK to the EU are now experiencing an additional fee for receipt, as some banks in the EU slap the fee on payments from accounts outside the EU to beneficiaries in their banks. That’s even though the UK remains a part of SEPA.

Fighting fees. Members said the SEPA payment fee is an issue particularly with smaller banks in Spain, Italy and Portugal. One treasurer said this issue presented a challenge since he “hadn’t seen this one coming.”

  • Another member, who had dealt with the same problem when making SEPA payments out of an account in Switzerland, also a part of SEPA but not the EU, advised the member to ask that the beneficiary banks reimburse the charge and request that the beneficiary also challenge the fee, so “there is pressure on both sides.”
  • “Our interpretation of SEPA is that this wouldn’t happen,” the member said. “But apparently there is this loophole that can be used” by EU-based banks.

In-house bank? The member said the alternative to paying the fee, if it is not reimbursed by the bank, is to make payments via an in-house bank in the EU if you have one.

  • Otherwise, it may be just as cost-effective to ignore the charges or reimburse the beneficiaries for it, as a company might do if the payments are for employee T&E expenses, for example.
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Justin Jones

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