Chris Skinner's blog

Shaping the future of finance

UK banks hit hard by SEPA

Chris Skinner Author Avatar

Interesting research
that was blasted across the UK press yesterday. The research came from
the recently IPO'd website, which reckons that we
could be paying an average of £300 a year in current account charges if
the UK's free banking system is changed to a pay-as-you-go fee

The research is based upon the typical charging
structures for banking in other countries and calculated that, should
the UK banks be forced to scrap free banking due to the latest hullaballoo over bank charges, we would be paying:

  • 32.9p per direct debit;
  • 34.2p for each standing order;
  • 23.9p for getting cash out of the bank;
  • 53.8p for card transactions; and
  • 44.7p to process a cheque.

They also add on a monthly charge for running the account of £4.13p.

total, using this model of charging, the average person would pay a
bill of £294.63p per annum, whilst those who have a lot of transactions
would be hit by fees over £500 per annum.

No wonder more and more
folks are starting to say that those who are overdrawn  and
unauthorised should pay high fees.  Typical of such sentiment is this write-up in the Times by
Stephen Pollard, which states: "most of us will have to pay a lot more
because a few irresponsible customers think they should pay less", a
point which is continued in this discussion thread at's website.

fact, it's not surprising that most people don't want an end to free
banking (96%+ on AOL UK) and's research found that
only 1% of consumers said they would be happy to be charged for every
transaction they made; 8% would rather pay a monthly or annual fee; and
the majority of people would prefer to continue with the current system.

this changing sentiment is why, having had our banks already pay back
over £400 million in 'unfair' charges, the FSA has finally stepped in and said this should be decided in the courts.

But I have a different question.

If's research is to be believed, then UK banks will
be ripped to pieces by SEPA and the Payment Services Directive.


according to the views of a certain Charlie McCreevy, the costs of
running a current account varies across the Eurozone with some
countries charging eight times more than others.  This is based upon research quoted
by the Commission which states that Italian citizens pay an average
€252 a year for a basic bank service, whilst the Dutch pay only €34 a
year.  Using's research, the UK would then be a
real target for European bankers to attack if we were paying £300, or
€450 a year - over 13 times more than the Dutch pay. 

Someone's got their numbers mixed up.

The research quoted by the Commission is from the ING, Cap Gemini, EFMA World Banking Report
of 2005, which shows that the Dutch have the cheapest banking in the
World - even cheaper than China - but the UK is not so bad.  Our
weighted pricing shows that we're cheaper than Canada, Spain, America,
Germany, the Czech Republic and many others.

Using the World Banking Report therefore, the cost of our banking would be more like €100 a year rather than €450.

that's what I believe will happen: that we will move to a monthly
billing service rather than a pay-as-you-go service.  The UK will
charge consumers about £7.50 a month for their bank services and we
will end free banking.

Rock on ...

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

Intelligent Money: Our Future Is Where We Do Not Think About Money, As Our Money Thinks For Us

What is the future?

Learn more

Learn more about Chris

About Chris Skinner

The Past, Present And Future Of Banking, Finance And Technology

Fintech expert Chris Skinner: countries need digital transformation to remain competitive

Join me on Linkedin

Follow Me on X!

Hire Chris Skinner for dinners, workshops and more

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Chris’s latest book

Order now

Chris Skinner’s ‘Intelligent Money’ Book Launch Event

Top 50 Global Thought Leaders and Influencers on FinTech 2023

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Global Awards

Lifetime Achievement Award

Global 100 - 2024 Winner

Chris Skinner - Financial Markets Advisor of the Year - The Finanser - UK 2023

Best Financial Markets Advisor of the Year 2023

30 Best Regtech Blogs and Websites 2023

Kids creating the future bank | TEDxAthens

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award


Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser