Railsbank has joined forces with Wise and many other financial institutions, through the Accept my IBAN initiative; to draw attention to how serious an issue IBAN discrimination remains to be.
According to European law, any IBAN issued in an EU Member State needs to be accepted in all Member States — IBAN discrimination is when payment is refused because the bank account is held in another European country.
For example, you’re a British ex-pat living in Spain, and you wish to join a gym. But the gym will not accept your British IBAN code, which would look like GBXX XXXX XXXX. Instead they will only accept a Spanish IBAN which looks like ESXX XXXX XXXX. Your IBAN code, regardless of which EU country it’s from, should be accepted anywhere in the European Union. If the gym insisted on only accepting a Spanish IBAN, they are breaking the law.
The International Bank Account Number (IBAN) is an internationally agreed system of identifying bank accounts. IBANs are used across national borders to facilitate the communication and processing of cross border transactions; as well as reducing the risk of transcription errors.
By discriminating against overseas IBANs, providers are indirectly forcing the customer to open a bank account with an entity that provides a local IBAN. This could lead to administrative inconvenience and financial worries.
Further to this, it may not always be possible for a consumer to open an account with a local bank or financial institution, as many often have strict procedures for proving identity and address.
Post Brexit
The Bank of England has warned of the potential for payment disruption for consumers and businesses at the end of the Brexit transition period.
Even though the UK is no longer part of the European Union (EU), it is still part of the Single Euro Payments Area (SEPA). Therefore, refusing to accept a payment from the IBAN code of a SEPA member is a violation of EU rules — specifically article 9 of SEPA Regulation — and against the law.
How to Report it
Anonymously report IBAN discrimination at www.acceptmyiban.org
