Easier access to banking services and effortless comparability of fees

09/01/2023

The Law on Comparability of Fees Related to Consumer Payment Accounts, Payment Accounts Switching and Payment Account with Basic Features has entered into effect today. With the enactment and implementation of this law Montenegro has fully harmonized its regulatory framework in this area with the Directive 2014/92/EC on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (Payment Accounts Directive - PAD). 

The application of this law enables a better information access to consumers, as a prerequisite for greater protection of their rights, as well as easier comparability of fees for payment services associated with a payment account, increasing competition in the market, reducing costs and administrative difficulties when switching payment accounts, and developing innovations in the field of provision of financial services to consumers. The law also enables financial inclusion of consumers who are unable to open a payment account due to their place of residence or poor financial situation. 

This law applies exclusively to consumers, that is, to any natural person who concludes a payment services contract for purposes that are not intended for his/her activity, business or profession, but only for personal needs. 

This law achieves the following: 

• Additional transparency and easier comparability of fees related to consumer payment accounts, thus improving payment services and allowing consumers to more easily select the payment service provider whose payment services they will use. This is additionally ensured by publishing a common list of comparable fees associated with consumer payment accounts on the website of the Central Bank of Montenegro. This solution allows consumers to compare offers of various banks in a simple and practical way and to make a decision on the payment account that best suits their needs (link);

• Increasing the level of consumer protection when contracting and using payment accounts in such a way that payment service providers undertake to use terms from the list of the most representative services in all precontracts, contracts and advertising information intended for consumers, thus providing consumers with standardized, common and clear information;

• Payment service providers are obliged to inform consumers, at least once a year and free of charge, about all fees and interest charged, thus ensuring that consumers have an annual overview of the relevant costs in a single document;

• The conditions are created for the transfer of consumer payment accounts from one payment service provider to another, whereby the procedure is initiated at the consumer`s request and all other activities are performed by payment service providers. To wit, the former practice was such taht if a consumer wanted to change the payment service provider, they had to do it personally and this, together with the accompanying administrative requirements, represented a burden for them. As of today, if a consumer wants to change a credit institution, it will be enough to contact the new bank and authorize it to transfer all or certain payment services that the consumer used with the previous credit institution. Consumers can thus switch payment accounts much more easily and without any large administrative and financial burden; 

• By obliging credit institutions to offer a "payment accounts with basic features", it is possible for persons with legal residence in Montenegro who do not have an account to open an account with a credit institution established in the country. The services associated with this account shall be provided by the credit institution free of charge or for a reasonable fee, except for credit card payment transactions for which it may charge fees according to the institution`s usual pricing policy.

With a view to protecting consumers who belong to a vulnerable group of consumers, credit institutions are obliged to provide certain services associated with the payment account with basic features free of charge. These are services that enable the opening, management and closing of payment accounts; services that enable the payment of cash to a payment account; services that enable the payout of cash from a payment account, at a counter or an ATM during or outside the working hours of the credit institution, as well as the first ten national payment transactions in a month. Also, for this group of consumers, credit institutions may charge a fee up to a maximum of 70% of the fee charged to other holders of accounts for payment with basic features for direct debit services, payment transaction services via payment cards, including online payments, as well as credit transfers, including standing orders, at terminals, counters and via the online facilities, if available.

The list of credit institutions that open and maintain accounts with basic features can be found at the following link.