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Firms warned not to discriminate against non-Irish payment apps


Fintech company Revolut. Stock image

Fintech company Revolut. Stock image

Fintech company Revolut. Stock image

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

IBAN (international bank account number) discrimination has become an issue across Europe as an increasing number of firms provide services on a Europe-wide basis.

Payment providers Revolut and N26 uses non-Irish IBANs with account holders often finding that their employer or utility provider rejects 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 will not make payments to them, while some service firms do not recognise IBANs for payment providers from outside the State.

The Central Bank said it was writing all the regulated financial service providers in the State, businesses and professional representative bodies, to remind firms of their obligations under the Single European Payments Area initiative (SEPA).

SEPA allows payment service customers to make cashless euro payments to firms and individuals anywhere within the SEPA area using their IBAN.

Refusing to accept non-Irish IBANs within the SEPA area is prohibited under the SEPA regulations, and is known as IBAN discrimination, the Central Bank said.

IBAN discrimination creates difficulties for Irish and European consumers, and raises barriers to the proper functioning of our payment system.

Director of financial operations at the Central Bank William Molloy said: “Providers and facilitators of SEPA credit transfer and direct debit services must be aware of their obligations under SEPA.

"These obligations apply to all organisations including regulated financial services firms, businesses and State organisations.

“Consumers should be able to choose their Payment Service Provider (PSP) free from concerns about encountering problems when using their legitimate payment account details,” Mr Molloy said.

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Daragh Cassidy of price comparison site Bonkers.ie said IBAN discrimination is not as bad as it was, but it is still very much an issue in Ireland and has been for years.

“It’s a barrier and an impediment to competition in the Irish banking sector and we need strong action to stamp it out,” he said.

The intervention by the Central Bank comes a day after the retail banks here were cleared by the State’s competition watchdog to set up a money-transfer app to rival Revolut.

The Synch payment system is aimed at allowing instant person-to-person payments on mobile phones.

It is understood the payment app will be called Yippay.

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