Revolut is transferring Irish user’s accounts to Revolut’s business in Lithuania.
The decision was made on the ground that e- money will no longer be valid after Brexit. The move is temporary.
Revolut’s spokesperson has stated that the move was to ensure that Brexit does not impact Irish customers. Revolut is currently licensed in the UK by the Financial Conduct Authority.
Revolut has until now been using the same e-money licence to operate in Ireland under EU passporting rules.
These passporting rules allow a bank or financial institution which is licensed in one EU country to ‘passport’ or transfer the licence to another country without having to get full regulatory approval all over again.
But due to the lack of an agreement between the UK and the EU on the financial services Revolut’s UK e-money licence will no longer be valid in Ireland.
Therefore, in December Revolut will transfer its Irish users to its e-money licenced business in Lithuania, where it also has a banking licence.
This means Irish customers of Revolut will then be regulated by Lithuania’s Central Bank and not the FCA. Revolut is required to safeguard its customers’ funds in a separate client money bank account.
The client money bank account of Irish customers used to be with Lloyds in the UK and Revolut has no access to this money. The client money bank account or holding account is said to be JP Morgan.
Daragh Cassidy, Head of Communications and PR at comparison and switching site bonkers.ie said Brexit will have an impact on consumers and businesses.
He pointed out that the IBAN and BIC numbers of the customers will change. But this will not affect those who top-up using bank’s debit card.
All Revolut IBANs currently start with a ‘GB’ as this is what is used for all UK-based accounts. This will now change to LT.
“This means if you are getting paid into your account by your employer you must let them know 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 be hit with referral fees, which will also place your credit rating at risk.”
Revolut is working on getting an e-money licence from the Central Bank of Ireland (CBI), which is expected to be approved in the coming year or so. After this, Revolut customers in Ireland will be migrated to its Irish business and protected and regulated by the CBI.