RegSol Blog

Central Bank seeks to end IBAN discrimination

June 2022

The Central Bank of Ireland has written to, among others, all financial services providers in a bid to end IBAN discrimination and remind firms of their obligations under the Single European Payments Area initiative (‘SEPA’).

This is in response to some firms continuing to refuse to accept non-Irish IBANs (international bank account numbers) - the standard identifier for all SEPA bank accounts - for payments.

The issue of IBAN discrimination has come to a head as hundreds of thousands of customers prepare to switch bank accounts, as KBC and Ulster Bank depart the Irish market. This is because some consumers may opt to switch to a bank that doesn't currently offer an Irish IBAN, such as Revolut.

What is IBAN discrimination?

IBAN discrimination is where a firm (or other entity) refuses to accept a consumer’s SEPA IBAN for euro payments or direct debits. An Irish firm cannot insist consumers open or maintain an Irish bank account for euro transfers.

IBAN discrimination is not permitted under the SEPA regulations.

The Central Bank is concerned that IBAN discrimination creates difficulties for Irish and European consumers and raises barriers to the proper functioning of the payment system.

What is SEPA?

SEPA allows consumers to make cashless euro payments such as direct debits and credit transfers to firms and individuals anywhere within the SEPA area using their IBAN.

So for example, an Irish person with an AIB account should be able to make payments quickly and easily in Germany without having to set up a German bank account, and a German with a German account should be able to do likewise here.

SEPA includes all 27 EU countries, the UK, and eight other European countries (Norway, Monaco, Switzerland, etc.).

It was fully implemented in 2014 in the euro area (and by 2016 in non-euro area SEPA countries).

Key takeaways:
  1. Regulated firms cannot refuse to accept from consumers non-Irish IBANs from within SEPA.
  1. IBAN discrimination is unlikely to impact many of RegSol’s clients. However, clients should be mindful of the Central Bank’s announcement particularly in light of the changing Irish banking scene where consumers will be turning to other banking services that may provide them with non-Irish IBANs. Accordingly, if the payment is legitimate (i.e. from an identified consumer) and within SEPA, the non-Irish IBAN should be accepted by firms.
If you are still in any way concerned as to how IBAN discrimination may affect your business, please feel free to contact us at