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Revolut has announced that it will move the accounts of its Irish users to the Revolut business in Lithuania because their e-money license will no longer be valid after Brexit.
The measure is temporary while the digital bank awaits the outcome of a licensing process with the Central Bank of Ireland.
In a statement, a Revolut spokesperson said: “While that process is ongoing, to ensure that Brexit does not affect our Irish customers, we will temporarily migrate their accounts to Revolut’s e-money licensed business in the EU, based in Lithuania.
“Our plan is that once the IWC clears the Irish business, we will migrate our Irish Revolut customers to the Irish entity and, in due course, many of our other Western European customers.”
Revolut is currently licensed in the UK by the Financial Conduct Authority. You have a UK e-money or e-money license, not a banking license, and have so far been using that same e-money license to operate in Ireland under EU passport rules.
These passport rules allow a bank or financial institution licensed in one EU country to ‘passport’ or transfer the license to another country without having to obtain full regulatory approval again.
However, due to Brexit and the lack of signs of an agreement between the UK and the EU on many topics, including financial services, Revolut’s UK e-money license will no longer be valid in Ireland by the end of year.
In December, Revolut will transfer its Irish users to its licensed e-money business in Lithuania, where it also has a banking license. This means that Revolut’s Irish clients will be regulated by the Central Bank of Lithuania and not by the FCA.
Furthermore, as an electronic money institution, Revolut must segregate and protect its clients’ funds in a separate client money bank account.
In the case of Irish clients, the bank account for the client’s money used to be at Lloyds in the UK and Revolut theoretically does not have access to this money.
In the future, the customer’s money bank account or holding account is said to be JP Morgan.
Daragh Cassidy, director of communications and public relations for the bonkers.ie comparison and change site, said that Brexit will have a detrimental impact on consumers and businesses and that this move by Revolut is perhaps the first sign of chaos to follow. looming.
“The biggest impact customers need to take into account is that their IBAN and BIC numbers are going to change,” he said. “For most Revolut customers who top up through the app using their main bank debit card, this will not be a problem.
“However, for those who are paid directly into their account by their employer or have direct debits or standing orders on the account, there will be a change.
“This is because all Revolut IBANs currently start with a ‘GB’ as this is what is used for all UK accounts. It will now switch to LT.
“This means that if your employer pays you on your account, they must inform you that your account details have changed. You must also update any direct debits or standing orders you have, otherwise they could bounce and you could receive referral commissions, They will also put your credit rating at risk.
Going forward, Revolut is working towards obtaining an electronic money license from the Central Bank of Ireland (CBI), which is expected to be approved in the next year, although no firm deadlines have been agreed.
When this happens, Revolut customers in Ireland will be migrated to their Irish business and will be protected and regulated by CBI, but it will mean that their IBAN and BIC numbers will change once again.
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