IBAN discrimination: what is it and what are my options?

Jullian Duran
2 minutes
FinanceBusiness tips
IBAN discrimination: what is it and what are my options?

When the European Union was established, it opened up a world of opportunity for European businesses and consumers, giving people access to one of the largest markets that exists today.

But with the rise of innovative global fintech, consumers and businesses who live and work across Europe are now fighting against what’s called ‘IBAN discrimination’. This phenomenon prevents people from paying and getting paid using their local International Bank Account Number (IBAN), only because of their country code.

What is IBAN discrimination?

If a European business in one of these 36 SEPA countries asks you to provide a bank account based in that same country, that’s called IBAN discrimination. The good news is that IBAN discrimination is illegal, plain and simple. But if you do find yourself caught between a rock and a hard place, it’s helpful to know your options.

Whether you’re doing business in Germany or France, an IBAN from Estonia or Belgium works just fine. In fact, this has been true for seven years now.

Don’t believe it? Read the EU law for yourself.

There’s also a list of competent authorities, which you can access if you’re curious which authority is responsible for policing this in your country.

Admittedly, the real world can take some time to catch up to the law. We’ve heard customers complain about service providers, contractors, and even banks asking for IBANs from particular member states like Germany or France. The geographical discrimination got so bad in Italy that the country actually fined Vodafone over it.

This practice can be counterintuitive, as many smaller EU countries often have much more advanced digital payment infrastructures. Take Estonia, for example. As one of the first EU countries to adhere to SEPA Instant Credit Transfer, Estonia’s online banking stands head and shoulders over other EU member states. What does that mean for customers? Faster, cheaper, and less restrictive banking.

How do I report IBAN discrimination?

If you are still hesitant about risking getting your IBAN rejected, there are ways to alert authorities about IBAN discrimination. Fintechs across the world have banded together to report IBAN discrimination—and you can too by citing offenders.

Join us in the fight against IBAN discrimination

Airwallex is ready to help. If a company or bank refuses to accept your IBAN only because of its country code, contact us immediately.

As always, we’re committed to empowering businesses to operate anywhere, anytime. The first two letters of an IBAN shouldn’t change your ability to do cross-border business.

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Jullian Duran
Associate Product Manager - GTPN

Jullian works product as part of Airwallex's Global Treasury and Payment Network (GTPN) team. He focuses on regulated markets and financial infrastructure.

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