Along with the creation of the single market and the euro, national boundaries are blurring, so one of the consequences is that of eliminating the differences between national and cross-border payments.
So, as a European consumer, you can make throughout the euro area cash or non-cash payments, regardless the Member State that you come from and the Member State where payment.
Although cash payments are the oldest form of money circulation, being one of the most commonly used payment methods, currently we witness the development of cashless payment systems, also called non-cash payments, including card payment, virtual account payment, bank transfer and payments by check.
2. Cash payment
Even if the European Union is composed of 27 states, only 13 of which have adopted the euro, it is necessary, in a first stage, to inform yourself if the country you are going to visit and to make purchases is part of the euro zone or not. According to this, payments will be made in euro banknotes and coins for euro area countries, and in local foreign banknotes and coins for countries that are not part of the eurozone.
For products / services purchased outside the euro zone, you will have to make payments with foreign currency which can be obtained both from your country of residence through the offices of a bank / foreign exchange and from the country you are visiting, using a local bank.
For withdrawing cash abroad you should consider the following issues:
- to non-euro area countries, the applicable exchange rate is the one at the date the transaction was confirmed and not the one in the day the transaction was made. Moreover, the bank can retain from the account, a fee for each transaction.
- for euro area countries, a fee may be charged, its value being the same, whether the withdrawal was made on the national territory or in another euro area.
3. Credit card payment
Card payment is possible in most EU Member States, whether we speak of a contract of sale of a product / service concluded verbally or a remotely concluded contract (by post, telephone or via the Internet).
Credit cards are increasingly used by consumers because they are largely accepted and allow easier and faster administration expenses. For added security, you should ask your card issuing bank information on the card types accepted in the wanted member state of the European Union.
Online purchases represent an alternative, becoming used increasingly by the traditional stores as it offers an opportunity to inform and compare the prices used bymerchants across the European Union to take an informed decision.
In this regard you should know that for the payment of a product / service via the Internet, you are being required information on the card number on which payment is made and the date of issue. If you are already registered you will need just to log in, then the amount will be debited from your account.
Although payment by card is a quick and cheap method, for your protection against fraud it is recommended that you create an ancillary account linked to the main bank account, as it is not safe to have on the card the entire amount contained in the account. It is also recommended on the card that you use for online payments to have an amount closest to the one that you have to pay for ordered products, provided that if payment is in Euro, the exchange rate may be higher as it is reported to MasterCard / Visa / American Express and not to the rate displayed by the bank where payment is done.
It is recommended when you pay by card, to make sure that the paid amount is the same as the amount printed on the receipt. Any irregularity found has to be claimed immediately and in writing.
Until you check your bank statement is good to keep the receipts of transactions that you’ve done.
4. Virtual accounts payment
Payment by virtual account works like a bank account, everything being accomplished electronically. Thus, the virtual account is “charged” by using a card compatible with online payments, with a certain value, the money having to be transferred into the bank account electronically through services such as Internet banking or by depositing them in the bank cashier.
In Romania, the virtual account type services are offered by companies like PayPal.com, Moneybookers.com and Mondopay.com, companies that arrange both payments and electronic money transfers to / from users of the same site, and payments for products purchased online from stores that accept virtual account as a payment method.
Payment via virtual accounts is a method with a high security system against fraud, because your card details are not known to the dealer,but they are stored by the payment processing company. Also, this payment method offers a high level of protection in respect of unauthorized payments, to such situations having the possibility of recovering money through the payment processing company.
- create an email address for the sole purpose of virtual payment account;
- use a password as complicated and difficult to guess, and change it regularly;
- owning a bank account compatible with the online payments;
- associating EURO and USD accounts to the main card;
- possession of Internet banking service required to view the transactions in your account;
- use, where possible, only the personal computer to avoid storing password and the user name on other computers used for online payments;
- withholding PIN and your account data to third parties;
- keep the page where the transaction has been done and those that include price payment terms and delivery conditions of the ordered product / service.
- do not get attracted to other sites on the pretext that you will be directed to the payment processor website;
- read carefully the incoming emails and carefully check the site that you must provide identification data. It should begin with “https://” rather than “http://”.
5. Payment by bank transfer
Payment by bank transfer requires knowledge by you of the banking data of the economic operator that have purchased products / services from, respectively the BIC code, showing the bank where the account of the economic operator is opened, and the IBAN, which is the account number of the operators.
If the bank transfer is done occasionally, to correct its execution must make available to the payment service provider the following information: the unique identification code and the name / name of payee necessary to identify it precisely; for Romania, the unique identification code is the combination between the IBAN account and the BIC / SWIFT code of the bank; the amount of the transaction; payment details; the option regarding the perception way of the commissions.
To make sure that the bank transaction will be executed smoothly, check the instructions or communications sent by the bank are clear and contain accurate data, because the bank is not required to verify your account holder name indicated in the payment order or his account number,so the payment will be made to the account specified by you in the payment instruction.
Lead time for payment orders is 3 days for international and intrabank payments, with the possibility of extending the period of execution to 4 working days, in the case of paper support order payments.
The Bank may refuse to execute your payment order if: the payment order is unclear or does not contain necessary instructions for the execution, for example the unique identification code is not specified, or the amount to be transferred is not declared; the amount in your account is not sufficient for the payment or for fees payable to the bank; there are provisions for attachment, seizure or other disposition of unavailability issued by another authority on the amounts in your account; you have outstanding debts to the bank; the transaction is not in accordance with legal regulations. Refusal to execute the payment order shall be subject to a notice sent to you.
Payment order may be revoked until the business day prior to the date required for execution, but only if the execution date is in the future, the bank may charge a price for revocation.
The payment order can not be revoked after it was received by the bank.
In accordance with Regulation (EC) nr. 924/2009 of the European Parliament and of the Council on cross-border payments in the Community and repealing Regulation (EC) nr.2560/2001, the fees for cross-border euro transfers are the same as for domestic transfers in Euro.
6. Payment by check
Payment by check is a less used method in the European Union. In the euro area countries you can use the check payment method for payment in euros, only if the economic operator supports this, noting that for this to be done some fees may be charged, which may vary from one institution to another.