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A member of the European Parliament (MEP) has highlighted the continued difficulty of opening basic payment accounts across EU member states, despite clear legal protections in EU law.

Vilija Blinkevičiūtė, an MEP from the Socialists and Democrats (S&D) faction, has  a written question to the European Commission highlighting widespread non-compliance with the  (�ʴ���).��

The directive, which was enacted in 2014, guarantees all EU residents the right to open a basic payment account in any member state, regardless of their residency, and is intended to foster financial inclusion while enhancing the EU's single market for financial services. 

However, Blinkevičiūtė, a Lithuanian MEP, noted that payment service providers are often flouting the rules laid out in the directive.

One common complaint is that banks impose residency requirements, refusing applications from individuals residing in another member state. 

“A bank cannot refuse an application to open a basic payment account simply because the person does not live in the country where the bank is established,” she cautions in her query. 

“Unfortunately, banks in EU member states often refuse to open basic payment accounts if the person lives in another member state. Banks refuse to open such accounts if the applicant has not declared his or her residence in the country where the bank is established.”

According to the MEP, this happens even when applicants have legitimate ties to the country, such as employment, which the parliamentarian has said undermines the directive's intent to ensure financial inclusion across borders.

Another issue raised is that some banks approve applications only if customers agree to purchase additional financial products, such as insurance. 

This practice effectively makes access to basic payment accounts conditional on the customer’s willingness to buy other services, violating the principle of providing basic accounts without undue barriers.

Fee discrimination also remains a concern, and the MEP says that non-residents often face higher fees for basic payment accounts than local residents, creating further inequities and disincentives for cross-border banking.

In light of these issues, Blinkevičiūtė has posed pressing questions to the European Commission. 

She has asked whether the commission is aware of the extent of refusals to open accounts and whether it is collecting data on the reasons for these refusals. 

She also sought more clarity on the measures being taken to ensure full implementation of the directive, while questioning how the commission is addressing discriminatory practices, including fee discrepancies for residents and non-residents.

A known issue

The MEP’s intervention comes a year after the commission ruled out any changes to the PAD, despite suggesting areas in need of improvement. 

For example, the commission touted the idea of allowing consumers to retain their payment account numbers when switching accounts within the EU. 

This would eliminate the need for consumers and their creditors/debtors to update transaction details, but a cost-benefit analysis suggests this is currently unjustified due to low switching rates.

The commission’s report on the application of the PAD also highlighted difficulties in account opening, often due to a lack of standardised identity documents required for compliance with anti-money laundering (AML) rules.

It pointed out that the difficulty of opening accounts disproportionately affects asylum seekers, refugees and nationals from other member states.