The Bank of Albania has prepared several regulatory changes, aimed at addressing transparency issues in currency exchange fees associated with card transactions.

The amendments to the draft regulation “On the comparability of fees related to payment accounts and the payment account transfer service”, stipulate that payment service providers and parties offering currency exchange services at an ATM or at the point of sale (POS), must express a percentage value (mark-up) indicating how much the applied exchange rate differs from the latest available exchange rate published by the Bank of Albania. This percentage (mark-up) must be notified to the payer before the initiation of the payment transaction.

This percentage (mark-up) must be displayed to the payer before initiating the payment transaction.

Payment operators must publish the percentage in an understandable and easily accessible manner, on an electronic platform.

In addition to the above information, any party offering currency exchange services at an ATM or at the point of sale (POS) must provide the payer, prior to initiating the payment transaction, with information on the amount to be paid to the beneficiary in the currency used by him and the amount to be paid by the payer in the currency of his account.

Any party that offers currency exchange services at an ATM or POS must clearly display the information on the relevant device.

Before initiating the payment transaction, this party must inform the payer about the possibility of making the payment in the currency used by the payee, and subsequently, the currency conversion by the payer's service provider. The above information must also be made available to the payer by a durable medium of communication after the initiation of the payment transaction.

The payer's payment service provider must send the payer, without undue delay, an electronic message for each payment card issued to the payer by him and linked to the same account, after the payer's payment service provider

to have received a payment order for withdrawal of funds at an ATM, or for a payment at the point of sale (POS), which is denominated in Lek, a currency different from the currency of the payer's account.

Notwithstanding the above obligation, such a message must be sent once a month when the payer's payment service provider receives a payment order denominated in Lek from the payer.

The payment service provider shall agree with the payment service user on the widely available and easily accessible electronic communication channel or channels through which the payment service provider will send electronic messages. The above information shall be provided free of charge.

Where the currency exchange service is provided by the payer's PRB in connection with a credit transfer, which is initiated directly via the internet (online), using the relevant website or application of the PRB, the latter must inform the payer, before initiating the payment transaction, clearly about the fees charged for the currency exchange service related to the credit transfer.

Before initiating the payment transaction, the PRB must communicate to the payer, in a clear, impartial and comprehensible manner, the total amount of the estimated credit transfer, in the currency of the payer's account, including any transaction-related fees and any currency exchange fees. The PRB must also communicate the estimated amount to be transferred to the payee, in the currency used by the payee.

High costs, especially for ATM cash withdrawals by holders of cards issued by foreign financial institutions, have become the subject of dissatisfaction from foreign tourists or Albanian citizens living abroad and using their bank cards to withdraw money in Albania.

In fact, last year the Competition Authority recommended that the Bank of Albania review the methodology for calculating commissions for ATM withdrawals, both for domestic and foreign cardholders, including the mark-up for the Dynamic Currency Exchange (DX) service, to see if the practices followed by banks are in compliance with the regulatory acts in force.

Initially, the Bank of Albania had drafted a special draft regulation to address these changes (“On cross-border payment fees in the SEPA area and transparency conditions”), but after consultations it has decided to integrate the above changes into the regulation “On the comparability of fees related to payment accounts and the payment account transfer service”

Although the Bank of Albania proposes to impose explicit regulatory transparency obligations related to the exchange rate used in automatic withdrawals, banking sector experts say that transparency rules related to these services already exist. Global card scheme operators, such as Visa or Mastercard, apply transparency obligations for ATM withdrawal costs. Commissions and other costs must be clearly displayed to the customer at the ATM and their presentation is verified and approved by the aforementioned operators./ Monitor