Report
Finance Watch releases a new study identifying the barriers to basic payment accounts for vulnerable consumers in Germany, Spain and Romania, and calls on EU policymakers to update the EU Payment Accounts Directive (PAD) to tackle these issues.
With the support of our members and partners, Finance Watch conducted a study of the EU basic payment accounts market based on a mystery shopping exercise and qualitative research in three EU Member States, namely Spain, Germany, and Romania. The objective of the study was to gather hard data in the field regarding the effectiveness of PAD and to identify possible changes needed to the directive.
The study findings show that there is a need to revise the PAD to ensure that it can meet its full potential. Many vulnerable consumers do not have access to affordable basic payment accounts in the EU due to a number of factors, including: affordability, awareness, documentation/excessive de-risking issues as well as a lack of willingness by financial institutions to proactively offer and inform consumers about these products.
The report includes four key recommendations for EU policymakers:
- Mandate basic payment accounts to be free for vulnerable consumers
- Mandate the offering of basic payment accounts as the default option
- Enable the opening of basic payment accounts for consumers lacking proper documentation with the proviso that their accounts have more limited features and stricter monitoring requirements
- Introduce robust and more prescriptive awareness raising measures by firms and Member States
Report: Breaking down barriers to basic payment accounts
Finance Watch_Report_payment accounts
