France’s numbers: Fight against IBAN discrimination
French payment platform Numeral joins the UK’s fight against IBAN discrimination.
The bank aggregation and payment automation platform announced on Tuesday (14 March) that it has launched in the UK, where it will allow FinTech companies to access SEPA (Single Euro Payments Area), Bacs and FPS (Faster Payment Services) through its banking partners.
“As Europe’s leading FinTech hub and a prime destination for global FinTech companies in their international expansion, the UK is an entry point to continental Europe for financial innovators,” the company said in a press release.
But since Brexit, customers of UK FinTech companies have faced renewed cases of IBAN discrimination, a term for what happens when businesses or employers refuse to accept an International Bank Account Number (IBAN) for payment in euros because of the country code, thereby denying consumers access to services.
As mentioned here last year, IBAN is an internationally agreed system for identifying bank accounts across global borders. The EU’s Single Euro Payments Area regulation has for years required banks and businesses to accept IBANs from all member states.
“It means that an Irish business cannot refuse payment from a SEPA-based account just because they don’t have an Irish IBAN, for example,” PYMNTS wrote. “Similarly, Article 9 also mandates that an employer cannot require employees to have local bank accounts in order to be paid.”
So why do employers, merchants and banks continue to discriminate?
“Ultimately, many of the problems with IBAN discrimination boil down to a lack of knowledge of the rules,” PYMNTS wrote. “Not all companies and contract issuers are familiar with the relevant regulations; for example, many organizations are not aware of their obligation to accept euro payments from IBAN numbers regardless of which SEPA they come from.”
Numeral is among the companies trying to solve this problem, following a similar offering in Ireland by FinTech Revolut earlier this year.
“Using Numeral, UK FinTech companies can connect and send and receive SEPA payments with the EU banks of their choice, effectively benefiting from the EU IBAN,” said Édouard Mandon, co-founder and CEO of Numeral.
“More advanced companies that wish to obtain an EU payment institution or electronic money institution license can also become SEPA participants and issue their own EU IBANs. Numeral helps these companies connect with their SEPA sponsor bank and process SEPA – their payments.”
Sign up for the PYMNTS.com newsletter to get updates on top stories and viral hits.