IBAN discrimination: How to ignore the law and get away with it

In 2014, the European Union passed a law that made it illegal to discriminate against a bank account number (IBAN) from another European country. Seven years later, an assistant at the European Parliament - the same institution that passed that law - wasn’t able to get their salary because Parliament refused to pay out to non-Belgian bank accounts. They weren’t alone in their experience. 

Let’s say you have a German bank account and want to set up a phone contract in Spain, legally speaking you should experience no issues at all. But practically speaking, that experience will be riddled with problems.

People who can’t pay have taken their frustrations to public forums, social media, and their financial service provider’s customer support teams, but to little avail. Often, they are unaware that the company refusing to accept their IBAN is violating the law and wouldn’t even know where to report such a crime. To address those issues, Wise has founded an initiative to enable those affected to log IBAN discrimination regardless of where they’re based and who they bank with. Accept My IBAN is now a coalition of over 25 organisations, including Revolut, N26, Klarna and Estonia’s e-Residency programme, and represents millions of consumers across the EU.

Hundreds a month

Every month for the past year, hundreds of people told us via Accept My IBAN that they couldn’t pay for their phone contracts, rent, newspaper subscriptions, electricity bills, gym memberships, or public transport. But it’s even more worrying that every day, somebody got in touch to say that a public sector body refused to accept their non-local account as a valid payment method, leaving consumers in the cold for tax rebates, unemployment benefits and social security payouts - all during a year in which the pandemic reigned supreme.

IBAN discrimination is a pan-European problem, but some countries are worse offenders than others. France accounts for over 41% of all consumer reports of IBAN discrimination. Spain is a distant second, responsible for 19% of complaints, followed by Germany (12%). Complaints and pressure make a difference, France has now stepped up its enforcement of IBAN discrimination: the Competition Authority (DGCCRF) said it would issue fines of up to EUR 375,000 to discriminating companies. But consumers need to tell them first… 

Show & tell

It’s remarkable that Accept My IBAN has received close to 2,000 consumer complaints in just one year, while at the same time the relevant national authorities have received a few dozens. The Banque de France recently mentioned they’d only received 59 reports of IBAN discrimination last year. Accept My IBAN has received nearly 750 in France. Making your portal hard to find and hard to navigate is part of the problem. If people can’t complain, then it’s much harder to see the size of the problem.

Most EU countries have their own problematic approaches that fail to tackle IBAN discrimination. Spain introduced rules that essentially contradict the very essence of IBAN discrimination law. If a financial services provider is not on the government-approved list, then it’s impossible to pay or receive any money from a government body. And the providers added to that list… offer exclusively Spanish IBANs. And most Spanish telecoms providers make it impossible to set up a phone contract if your payment account number doesn’t start with ‘ES’.

Accept My IBAN has exposed some of these issues, including repeat offenders who continue discriminating against non-local bank accounts, despite getting fined. But it’s likely not enough. Until consumers, companies and government bodies realise all IBANs should be treated equally, regardless of their country code, we won’t see the necessary changes. So spread the word. Tell your friends, colleagues, financial service providers about IBAN discrimination and call it out when you see it. Even the European Parliament stopped discriminating after being called out publicly. It works.

About Magali Van Bulck

Magali Van Bulck is the founder of Accept My IBAN. She’s a policy and communications expert at Wise, having joined the company in 2016. In her time at Wise, she has been heavily focused on improving transparency in cross-border payments, lowering the cost of remittances and providing a pathway for non-banks to join the national financial infrastructure.

About Accept My IBAN

Founded in 2021, Accept My IBAN is an initiative spearheaded by global technology company Wise and backed by over 25 other organisations, including N26, Klarna and Revolut. Through the portal, consumers can report cases of IBAN discrimination regardless of where they are based and who they bank with. Findings are shared regularly with the European Commission to give authorities a full picture of how, when and where this illegal practice is taking place.