IBAN Discrimination: What You Need to Say
Written with AI assistance and reviewed by the NorwegianSpark SA editorial team
You go to set up a direct debit for your electricity, your gym, your mobile contract or your salary, and the form rejects your account. Sometimes the message says the IBAN is invalid. Sometimes it just refuses, silently, when the first two letters are not the ones the system expected. Sometimes a person on the phone tells you politely that you will need to open a local account.
None of that is a technical limitation. Within the European Union it is unlawful, it has been unlawful since 2014, and the fix is usually one written sentence sent to the right person.
This page gives you that sentence, the rule it rests on, and what to do when the sentence does not work.
What the rule actually says
The instrument is Regulation (EU) No 260/2012 — its full title is a mouthful about "technical and business requirements for credit transfers and direct debits in euro" — and the operative provision is Article 9, headed "Payment accessibility".
Article 9(1), in full:
A payer making a credit transfer to a payee holding a payment account located within the Union shall not specify the Member State in which that payment account is to be located, provided that the payment account is reachable in accordance with Article 3.
Article 9(2), in full:
A payee accepting a credit transfer or using a direct debit to collect funds from a payer holding a payment account located within the Union shall not specify the Member State in which that payment account is to be located, provided that the payment account is reachable in accordance with Article 3.
Paragraph 2 is the one that covers you when a company refuses to take your money. It says the party collecting the payment does not get to choose which member state your account sits in.
The "reachable in accordance with Article 3" condition is not a loophole to worry about. Article 3(1) requires a payee's provider that is reachable for a national credit transfer to be reachable for credit transfers from a provider in any member state, and Article 3(2) says the same for direct debits. In practice, any account with a euro IBAN at a SEPA-participating institution is reachable.
What it does and does not cover
| Situation | Covered by Article 9 |
|---|---|
| A euro direct debit collected from your account in another member state | Yes |
| A euro credit transfer paid to your account in another member state | Yes |
| A company insisting on a local IBAN for a euro salary or refund | Yes |
| A payment in a currency other than the euro | Outside this regulation |
| An account outside the Union | Outside this regulation |
| A refusal for a reason unrelated to the country of the IBAN | Not this rule |
The scope is euro payments and accounts inside the Union. That is a narrower rule than the one people quote at each other online, and being precise about it is what makes your complaint credible rather than dismissible.
The sentence to send
Put it in writing. Email, contact form, or a letter — anything that leaves a record. Keep it short, name the article, and state what you want.
I hold a payment account in the European Union with a euro IBAN, and it is reachable for SEPA credit transfers and direct debits. Refusing to accept it because it was issued in a different Member State is contrary to Article 9 of Regulation (EU) No 260/2012, which provides that a payee "shall not specify the Member State in which that payment account is to be located, provided that the payment account is reachable in accordance with Article 3". Please process the payment using the IBAN provided. If you are unable to do so, please confirm your refusal in writing so that I can report it to the competent authority.
That last line does most of the work. Very few front-line systems are designed to produce a written refusal, and the request usually escalates the case to somebody who knows the rule exists.
When the sentence does not work
The national regulator in Spain, the Banco de España, publishes consumer guidance on exactly this and describes the ladder plainly. It confirms the practice "contravenes Article 9 of Regulation (EU) No 260/2012" and tells consumers to inform the party "that they are required to accept payment accounts with IBAN from any EU country", to "send a formal complaint to the alleged infringer", and then: "If you do not receive a response or it is not satisfactory, you can report the alleged violation to the appropriate competent authority."
Which authority depends on who refused you.
- If a payment service provider refused, the competent authority is your country's central bank or financial conduct regulator. In Spain, for example, Banco de España directs those complaints to its own payment systems team.
- If an ordinary company or a public body refused, it is usually a consumer protection authority rather than the financial regulator. In Spain, Banco de España points consumers to the regional consumer authorities.
Find the right one before you write, because a complaint sent to the wrong body is not forwarded — it is closed.
Building the file
A complaint with those six items behind it is actionable. One that says a company was unhelpful is not.
Why it keeps happening
It is worth understanding the cause, because it changes how you approach the fix. Most IBAN discrimination is not a policy decision by anyone senior. It is a validation rule written years ago into a billing system, a payroll file format that expects a domestic account number, or a fraud control that treats a foreign IBAN as a risk marker. Nobody in the building has ever been asked about it.
That is why the written, article-citing message works so much better than an argument with the first person who answers. You are not persuading someone to break a rule. You are giving them the thing they need to get a ticket raised.
The counter-argument, stated fairly
Sometimes a refusal is not discrimination. A company may be unable to accept a direct debit in a currency it does not process. A payroll system may be constrained by a national tax reporting requirement rather than the bank details themselves. And an account can genuinely be unreachable if the institution is not a SEPA participant.
Check those before you escalate. Establish that the payment is in euro, that your account is a euro account at a SEPA institution, and that the stated reason really is the country of the IBAN. If any of those does not hold, Article 9 is not your rule, and leading with it damages an otherwise reasonable complaint.
What this is worth to you
Practically, avoiding one unnecessary local account is worth more than the annoyance suggests. Every additional account is another set of terms, another login, another provider that can freeze something, and another entity reporting your balance to a tax authority. The whole point of a single-currency payments area is that you should not need one — and if you are weighing whether to open a foreign account for other reasons, our guide to opening one as a non-resident sets out what that costs you in effort.
For the wider picture of what a euro account in another member state does and does not give you, see multi-currency accounts compared and international money transfers.
General information, not legal advice. This covers euro payments and accounts inside the European Union; rules, competent authorities and complaint routes vary by country and change. Verify with your own regulator before acting.
Sources
All checked 6 September 2026.
- Regulation (EU) No 260/2012, Articles 3 and 9, text as published by legislation.gov.uk: legislation.gov.uk
- Banco de España, Cliente Bancario — IBAN discrimination guidance for consumers: clientebancario.bde.es
