At a specially convened Round Table on payment developments held in Brussels, banking industry representatives were warned by the Commssion that costs of cross-border transfers within the EU are still too high. The Commssion expressed particular concern that payment systems are not keeping pace with the development of "new generation" banking services such as electronic purses, banking online or via a mobile phone.

Internal market commissioner Frits Bolkestein told the Round Table: "The Commission's political objective remains a modern Single Payment Area for the entire EU where there is no frontier effect for cross-border payments. The execution time and price for cross-border retail transfers will and must be considerably reduced and I am convinced that technological progress will allow such development and competition will press strongly in this direction.

"Beyond this, the Commission's ultimate objective is to see the possibility that e-money purses issued in one Member State can be used cross-border in the whole euro-zone," he added.

The Commission says it is monitoring progress closely and will push for speedy implementation of the Cross-Border Credit Transfer Directive. This will be the basis for considering a series of new proposals in the autumn of 2001 to improve traditional payments systems, says Bolkenstein.

Commission policymakers are increasingly concerned to ensure that legislation keeps up with developments in electronic payments. A study is in progress and as of 2001, the Commission will start analysing its findings with a view to further proposals in this area. The Commission is already committed to the publication shortly of a Green Paper on E-Commerce and Financial Services, which will inter alia pay particular attention to Internet payments.

For the European Parliament, Karla Peijs insisted there should be a rigid deadline of 1 January 2002 for the implementation of concrete changes. Above all, cross-border payments must be automated, as domestic transfers are. This will require the speedy implementation of electronic messages, the use of International Bank Account Numbers (IBAN) and of a single payment instruction.

The Commission is particularly concerned that in the five years since Internet banking has come of age, there is still no single, reliable, secure, efficient, practical and cheap system for payment over the Web.

Participants to the Round Table discussed ways in which the introduction of new technology could revolutionise payment methods. In credit card payments, Europay (Mastercard Europe) announced the introduction of a system of automatic transfers between card holders. Visa outlined the new rules it has instituted to guarantee Internet payments. Pilot projects involving the use of electronic purses for Internet purchases or cross-border transfers were also presented and the potential for payment via mobile phones or portables discussed.