What is Calling for Transparency in the UK all about?

What is Calling for Transparency in the UK all about?

Most of us have sent money abroad at least once in our lives or may keep doing it on a regular basis for various requirements. Some may be looking for the best way to start send money online from another country. Sending or receiving money from different parts of the world is not a new thing to people who are living away from their home country.

There are many non-Britain’s living in the UK and most of them need international money transfers often to send money to their loved one’s back home, receive money from their home country for education and other expenses etc. Even if you are British you may need to transfer money to other parts of the world for business reasons, employment or simply for your next vacation.

What are cross border transactions?

These payments are financial transactions where the sender and receiver are located in two different countries. Remittances, wholesale and retail business payments are performed mostly in-between different countries. Cross border transactions can be performed through bank transfers, credit card payments and alternative methods such as via money transferring companies, e-money wallets and mobile payment apps.

Cross border payments can be categorized into two main parts.

  • 1. Wholesale cross border payments: Transactions between financial institutions, governments and non-financial companies.
  • 2. Retail cross border payments Transactions between individuals and businesses. Remittances also falls under this category.

Why are these transactions so important?

With globalization and rapid development of technology people are becoming more and more mobile, travelling to different countries and expanding their businesses to many different parts of the globe.

Remittances from migrant workers contribute largely towards the development of the economies of their home countries. The value of cross-border payments is estimated to increase from almost $150 trillion in 2017 to over $250 trillion by 2027.


It has been a known fact that these cross border transactions are always time consuming, costly, less transparent and difficult to access by many around the world. The international money transactions can take several days’ and cost way more than local transactions.

The G20 summit held in 2020 giving priority to these long standing issues, identified the obstacles that are found in cross border transactions and even came up with suggestions to address the issues.

Where can it go wrong?

When we want to make an international transaction we mostly go to a bank, money transferring company or try doing it online. Whatever the method we choose there's a high chance we may get charged without any prior notice or in other words there may be hidden charges involved in our transaction resulting in less money getting into the receiver's hand than we expected.

This may happen each and every time we perform an international transaction and can you imagine how much money we lose while transferring money across the seas? In some cases, there is a fee for the receiver to pay before collecting the cash.

Cross border transaction service providers may say there are no transaction fees involved or the transactions are free to perform. Actually they perform these transactions with a very high interest rate that can cover the transaction handling cost.

The British consumers and businesses have lost €5.6 billion in 2022 as transaction fees alone. This is something the British government should consider and act fast to prevent or minimize such loss in future.

Cross border transaction regulations in the UK

The Cross Border Payment Regulation (CBRP) was originally regulated by the European Union (EU) which came into effect in September 2009. It set out a principle that the charges on cross-border payments in Euro had to be the same as charges on national payments of the same value. The Cross Border Payment Regulation also requires the banks or any other financial institutions to provide customers complete transparency on international money transfer charges for certain card transactions performed within the European Economic Area (EEA). Also the bank needs to send a message to the card holder when the cardholder uses the card to perform certain transactions involving an exchange of currency in a non-eu EEA currency.

Later this CBRP1 was amended by extending the transparency of charges principle to any non-euro currency of an EU member state and introducing new transparency requirements on currency conversion charges. CBPR was affected in the United Kingdom until December 31, 2020.

Later CBRP2 was introduced with many alterations to CBRP1 along with new transparency standards. The CBRP2 mainly focuses on increasing the transparency of currency conversion costs in the payment industry.

Banks, online money transfer service providers or payment service providers are requested to publish the foreign exchange mark ups on relevant transaction currencies to the public through a website. They should also send an electronic message to their cardholders mentioning the total foreign exchange mark-ups on qualifying transactions effected from April 19, 2021.

When the currency conversion service is done through an ATM or at a point of sale, the currency conversion charge must be shown as a percentage mark-up over the most recently accessed euro foreign exchange rates issued by the European Central Bank (ECB). This disclosure must be made before the transaction is initiated.

Benefits from CBRP2

It has enabled customers to compare various currency conversion charges and pick the best currency exchange option to get maximum benefits. On the other hand, banks may consider revising their higher charges to be competitive. It has largely helped the businesses present in the Euro Zone and United Kingdom to perform their cross border payments for lower transaction fees.

Thanks to all these regulations and rules imposed on the cross border transactions within the European Union including the UK has become more transparent to the customers. People can perform their money transfers with much confidence within this region for reasonable charges. It has also protected consumers from excessive charges and has increased transparency requirements for currency exchange rates and transfer fees used in cross-border payments. Sadly, all the transparency regulations are applied to transfers between EUR and GBP.

On the other hand, Remittances have improved millions of people’s quality of life around the globe. Sustainable Development Goals (SDGs) set up by the United Nation aims to reduce the cost of remittances to less than 3% by 2030. At present the UK's average cost is around 6.3% which is more than double the target. So it is clear why the UK government needs to introduce transparent pricing to cross-border payments in the UK in order to achieve the UN’s Sustainable Development Goals.

There is an urgent need for the improvement of transparency on transactions involved between other currencies and GBP. It is the only way the customers get to compare costs, pick the best service provider and perform transactions with much confidence.

Already the Teeparam Exchange provides their customers a fair service since 2017 with maximum transparency in each and every transaction. With zero hidden charges they provide a clear picture on their transactions including the fees involved before entering into the process. With competitive exchange rates, advanced technology and lowest fares Teeparam remains as one of the safest and trusted places in the UK for international money transfers.

At present Payment Service Regulations 2017 (PSRs 2017) act as the main legislation body for regulating payment services in the UK. The UK treasury has published a review of the Payment Services Regulations 2017 (PSRs) and related and has called for Evidence (the Consultation).

This review also includes the Electronic Money Regulations 2011 (EMRs). By revising PSRs the UK government is expecting to improve meaningful competition via open banking and existing regulations to be amended according to the fast changing market trends, ensure more trust and protection for customers and facilitate the international competitiveness of the UK economy through growth and innovation in the UK payments sector.

However, the UK is still following the regulations set up by the European Union on cross border transactions and these regulations address mostly the transactions involved between the UK and Europe. The United Kingdom has realized the constraints following these regulations as a non-EU county and the urge for a tailor made regulatory system that fits well to the UK payment system.

This new system may include proper regulations on cross border money transfers outside the EU where people and businesses can perform global money transactions with more transparency and with less fees. There is a high chance that the UK government will include crypto payment options for their new system and add regulations on how the crypto currencies will cooperate into the system.