Some time ago I buckled to peer pressure and opened a Revolut account. I’ve got to say it’s great. However, recently, some people I worked for tried to pay my fee to my Revolut account using the usual details, ie account name, Iban etc. But it failed.
The reason? They are Bank of Ireland customers and the Banking365 app has been designed to require 22 characters in IBAN entries, meaning BoI online banking customers cannot transfer to Revolut customers.
Now, BoI has known about Revolut for some time, and this sounds like an easy issue to fix. But are they sticking to the 22-character limit in order to make things difficult for their competitor?
We know about Iban discrimination and the EU rules about that, and the EU Sepa guidelines clearly state that no technical issue should prevent Sepa transfers within the European Union, yet it seems the Central Bank hasn’t overseen this technical issue where it crops up among banks operating in Ireland.
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It seems amazing that a top bank could be so far out of kilter with the requirement of a basic and long-standing banking standard, not least as it has only very recently updated its banking app. And the good news is that it isn’t, albeit the solution is not as intuitive as the bank itself probably assumes it is.
Anyway, the good news from your point of view is that there is nothing to stop your clients — or their accounts departments — paying into your Revolut account through the Banking365 app.
The secret is in kidding the app that you’re somewhere you’re not.
[ Revolut plans new push into in-person payments with card readerOpens in new window ]
[ Revolut begins European roll-out of ‘buy now, pay later’ productOpens in new window ]
It seems odd that it should come to this. You are not unique as a business these days in operating through a Revolut account. I am conscious the fintech did walk away form its application for an Irish e-money licence earlier this year but it is licensed to operate here under a full banking licence awarded to it by the European Central Bank late last year.
Banking across EU boundaries is supposed to be one of the pluses of the European Union and an area that banks themselves operate at on a regular basis so it is hard to see what the issue should be. The Single European Payments Area (Sepa) is in place precisely to facilitate this. Sepa actually runs not just across EU states but also the UK, Iceland, Norway, Switzerland, Liechtenstein, Monaco, Andorra, San Marino and even the Vatican.
Revolut customers in Ireland are already regulated by the Bank of Lithuania following a move late in 2020 to shift regulation away from Britain due to Brexit. And this is where things apparently get a little tricky. That means, among other things that Irish Revolut accounts have Lithuanian international bank account numbers (Ibans).
It doesn’t sound like something that should be an insurmountable problem — not least as Bank of Ireland has invested heavily in a spanking new-ish app, even if it has struggled to impress many of its customers with its reliability, ease of use or breadth of service.
Ibans are a unique string of numbers and letters identify the country you’re based in, the identity of your bank, your sort code and your account number. No two are identical and they are designed precisely to facilitate cross-border banking under Sepa. As you say, the rules have been in place for a number of years now and banks are aware that they need to allow such transactions.
The odd thing about Ibans is that they are not standard across the EU. In fact, they can run from as few as 14 characters up to 34. Irish Ibans are 22 characters long and that is what Bank of Ireland’s app is set up to accommodate. However, Lithuanian Ibans are just 20 characters long.
There is a quick fix.
When the people looking to pay you through Banking 365 go to add you as a payee, under “Country and Currency”, it defaults to Ireland as the location of the payee’s bank — hardly surprising as this is where you are based. However, that default also defaults the Iban set-up to an Irish Iban of 22 characters.
What they need to do is click on the downward arrow next to Ireland in that “Country” box and select Lithuania instead. It will then accept the Lithuanian Iban of your Revolut account.
Simple, as I say, but clearly not that widely known. I cannot recall coming across the information in any marketing campaign from the bank. And clearly your customers — or rather their accounts departments who, as you say, would be fairly adept at all this stuff — hadn’t heard it either. It seems the bank, and possibly other Irish banks, might need to better point people in the way of this information.
However, it does put to bed any suggestion that there is any Iban discrimination taking place with the bank and therefore nothing to worry the Central Bank. This is as you would expect for any regulated bank, so it’s certainly a relief that a problem on this scale has not occurred.
However, Iban discrimination is an issue and there have been reported cases where employers, and companies supplying or purchasing services, including utility companies refuse to accept a foreign Iban. They are absolutely in the wrong. The Sepa rules make clear that any Iban that falls between the 14 and 34 character limit is valid and must be accepted within the Sepa countries.
If you or anyone else does run into an employer or a company that says it will accept only an Irish Iban, you should first let them know that they have no discretion in the matter and are obliged to accept Ibans from any Sepa state under article 9 of the Sepa regulations, which you refer to in your question.
If they persist, you need to complain formally. Initially this will be to the company concerned in writing. If you get no satisfaction, or even no response, then you need to escalate it to the relevant regulator. For consumer complaints, or issues affecting companies like utility suppliers, you go to the Competition and Consumer Protection Council. Otherwise, you’ll need to talk to the Central Bank.
- Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
