Sunday, 11 October 2015

In Berlin, it's better to have a Belgian bank account than a German one

While banks in Germany rake in ATM fees from customers of other German banks, EU law forbids them from charging citizens of other EU countries.

It's a 'Brussels week' for me this week, I'm in town to shoot a few videos and moderate some conferences. As the Autumn draws on, I'm finding myself here more often than I'm in Berlin. But this is fine, since I have apartments in both cities. 

Strictly speaking, when I'm in Brussels I am "home". This is still my primary address - my Belgian phone is still my primary number, and I still use a Belgian bank account for all transactions. And actually, this last fact has made my life in Berlin easier.

I've written before about how much of a pain it is to have to carry around two separate phones with German and Belgian numbers, because the EU won't end roaming charges until 2017. But when it comes to banking, the EU has made it quite convenient to make payments within the eurozone. 

Making payments in Germany with my Belgian bank account and my Belgian debit/credit cards is relatively easy. It's the same currency, so I don't have to worry about fluctuating exchange rates. And Germany uses the same 'maestro' debit card system as Belgium so I can use that card in places that don't take credit cards. EU law forbids my bank from charging me a fee for receiving money from another country in the eurozone, so I can have all my clients pay me into my Belgian account with no problem. I can easily pay people in Germany using a bank transfer with no fee.

And in one particular way, in Germany I'm actually better off than people with a German bank account. Germany is one of the countries where people are charged to use another bank's geldautomat (ATM). US banks also do this. But I actually haven't lived in a country where this is the case in nine years, because banks in the UK and Belgium do not charge an ATM fee for customers of other banks. 

Because I was used to the Belgian system of no ATM fees, I was confused when I first moved to Berlin and would ask people where the nearest ATM was. "Which bank do you need?" they would ask. I didn't understand why they were asking that. Now I understand why. Like in the US, you are charged a fee to use an ATM from a bank other than your own.

But because I use a Belgian bank, I am not charged (either by the ATM or by my bank). That's because EU law prohibits a bank in the eurozone from charging a fee to customers of banks in other EU countries. Equally, banks cannot charge a fee for their customers to use ATMs in other EU countries, unless they also charge that fee domestically.

This is designed to make banking more portable across internal EU borders. But while the EU can tell EU banks what they can do when it comes to inter-state fees, it cannot tell them what to do when it comes to intra-state fees. So the German banks are free to do what they like to German customers, but not to citizens of other EU countries.

It's a bit like the strange situation we find ourselves in today with roaming charges. The EU has capped the amount that phone companies can charge their customers to use their phone in another EU member state. But the EU cannot tell phone companies what they can charge their customers domestically. 

So with my Belgian phone, my carrier cannot charge me any more than than 7 cents to send a text to any EU number, and 14 cents per minute to make a call. If I send a text within Belgium to, for example, a French number, it costs 19 cents. But if I use my Belgian phone to send an SMS to a French number while I am in Germany, it is 7 cents. 

Because the caps only apply to roaming. So we're in the bizarre situation where, from my Belgian phone, it is cheaper to text/call a French friend while I am in Germany than while I am in Belgium. I often wait until I've left Belgium and crossed the border to text people with non-Belgian numbers.

With all this being said, there are some caveats. Not having a German bank account can be a real pain when it comes to making regular payments in Germany. For instance, in order to get a prepaid German sim card, I had to give a German bank account IBAN number (it wouldn't accept my Belgian one). If I were to join a German gym, they also would not take a foreign bank account number. And I have routinely been charged a fee online for paying with a Paypal account linked to a non-German bank account (by Air Berlin, for example).

So, while having a foreign bank account hasn't been too much of a problem (and has saved me loads in ATM fees), it isn't completely hassle-free. But still, the hassles are probably less than the hassle involved in getting a German bank account.

1 comment:

Quirinius said...

"EU law forbids my bank from charging me a fee for receiving money from another country in the eurozone"

AFAIK the rule is a bit different: the bank must charge the same amount for eurozone withdrawals as for homebank withdrawals.

So, as Frits Bolkestein said, the bank could ask fee of 10 euro per withdrawal ... as long as they do that everywhere ... ;-)