Companies warned against discriminating against non-Irish payment apps

EMPLOYERS, service companies and utilities have been warned by the Central Bank of Ireland not to discriminate against anyone whose current account provider uses a non-Irish bank account number.

BAN (International Bank Account Number) discrimination has become a problem across Europe as more companies offer services pan-European.

Payment providers Revolut and N26 use non-Irish IBANs, with account holders often finding their employer or utility company refusing payment requests.

Revolut uses a Lithuanian IBAN while N26 has a German one.

Some users of these money apps find that employers and pension providers do not make payments to them, while some service companies do not recognize IBANs for out-of-state payment providers.

The central bank said it is writing to all regulated financial service providers in the state, companies and professional bodies to remind companies of their obligations under the Single European Payments Area (SEPA) initiative.

SEPA enables payment service customers to use their IBAN to make cashless euro payments to companies and private individuals anywhere in the SEPA area.

The refusal to accept non-Irish IBANs within SEPA is prohibited under SEPA rules and is called IBAN discrimination, the central bank said.

IBAN discrimination creates difficulties for Irish and European consumers and hinders the proper functioning of our payment system.

William Molloy, Director of Financial Operations at the Central Bank, said: “Providers and intermediaries of SEPA credit transfers and direct debits need to be aware of their obligations under SEPA.

“These obligations apply to all organizations, including regulated financial services firms, corporations and government organizations.

“Consumers should be able to choose their Payment Service Provider (PSP) without concerns about issues when using their legitimate payment account details,” said Mr. Molloy.

Daragh Cassidy of price comparison site Bonkers.ie said IBAN discrimination is not as bad as it used to be but it is still a big problem in Ireland and has been for years.

“This is an impediment and impediment to competition in the Irish banking sector and we must do something about it,” he said.

The central bank’s intervention comes a day after retail banks here received approval from the state’s competition watchdog to set up a money transfer app to rival Revolut.

The synch payment system aims to enable instant person-to-person payments on mobile phones.

It is understood that the payment app will be called Yippay.