How to fight against IBAN discrimination

You're in business! You've just opened a free euro current account with SumUp and you're ready to start using your IBAN to send and receive money transfers anywhere in the Single Euro Payments Area (SEPA). Plus, thanks to SEPA Instant Credit Transfer your transfers are processed immediately and can show up in a matter of seconds or minutes, no matter what day or time it is.

Business bank transfers with your SumUp business account are also fee-free, meaning that you can send and receive an unlimited number of incoming and outgoing transfers without incurring any charges.

Currently all IBANs issued by SumUp are Irish, so they start with the letters "IE". If you've ever encountered a company that refuses to accept an IBAN purely based on its initial two letters, you should know that this is illegal. It's called IBAN discrimination, and we're here to help you fight it.


What are IBAN and SEPA? 

First, a few basics. Your IBAN is your bank account number, used for international and domestic payments. It stands for International Bank Account Number. The 2 letters at the beginning of it indicate which country it’s from, so SumUp's euro accounts start "IE". 

SEPA stands for Single Euro Payments Area, which is a group of countries that has reached a financial agreement to allow cross-border transactions and easier exchange of money between countries. 

SEPA includes every country in the EU, as well as the UK, Iceland, Norway, Monaco, Liechtenstein, Andorra, Switzerland, San Marino, and the Vatican City. You only need one bank account to do business within SEPA. 

IBAN dscrimination

What is IBAN discrimination?

Even though every SEPA IBAN is equally valid and must be accepted by companies in SEPA countries, sometimes you might find that a company only accepts certain IBANs or declines payments made from certain IBANs. That’s IBAN discrimination. 

Based on those first 2 letters of your IBAN, some companies may refuse to accept your payments, usually because your IBAN is not a local one, meaning that it is from a different country than the one the company is in. 

Companies practicing non-local IBAN discrimination will insist that you need to open a local bank account to do business with them - a company in France only accepting payments from a French account, for instance. This is illegal under Article 9 of the SEPA Regulation, and being caught doing it will result in a fine for the company committing the discrimination. 

How can I fight IBAN discrimination? 

Step 1: Tell the company

If you find yourself on the receiving end of IBAN discrimination, don’t panic. There are a number of steps you can take to rectify the situation. The first thing you can do is to inform the company discriminating against you that they are breaking the law and show them the SEPA Regulation as proof. 

Step 2: Write a formal complaint

If they do nothing, send them a formal written complaint, in which you explain again that they are breaking the law. The more detail the better in these complaints, so tell them what happened, the details of your transaction, and why your IBAN was refused. 

Step 3: Report them

When neither step gets a response, it’s time to report the company for IBAN discrimination. Again, be as detailed as possible about your problem and their transgressions. 

Depending on the country you’re in, the authority you report the discrimination to will be different. You can find the list of every authority responsible for ensuring compliance to the SEPA Regulation here

Alternatively, you can report the incident to the team at Accept my IBAN, an organisation dedicated to ending IBAN discrimination for good, which SumUp is partnered with.

When you report your case to them, you simply fill out the provided form with all the information about what happened, and then the organisation sends your report to the relevant authorities themselves, saving you the trouble of figuring out the appropriate authority to contact. 

All data you provide is kept secure and anonymous, and all personally identifiable information is removed from the report. This information is only requested so that they can contact you about the status of your report. 

You can rest easy knowing that your SumUp IBAN is legally valid in over 30 countries and that when it’s refused, that refusal is unlawful. It’s also easy to call out IBAN discrimination if you experience it, and be protected from any negative consequences when you do so.

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Max Elias