Revolut confirmed it is to temporarily move Irish accounts to Lithuania as its e-money licence will not be valid here post-Brexit.
Revolut will start migrating Irish customer accounts to its business in Lithuania later this year in what it said will be a temporary measure. Licensed in the UK by the Financial Conduct Authority (FCA), Revolut holds an e-money licence allowing it to operate in Ireland under EU passporting rules.
These passporting rules allow a bank or financial institution that is licensed in one EU country to transfer the licence to another country without having to get full regulatory approval again. However, in the wake of Brexit, Revolut’s UK e-money licence will not be valid in Ireland by the end of the year.
Starting in December, the company will begin transferring Irish accounts to its Lithuanian e-money business, where they will be regulated by Lithuania’s central bank.
“Our plan is that once the business in Ireland is authorised by the CBI, we will migrate our Irish Revolut customers to the Irish entity and, in due course, many of our other western European customers,” it said.
As an e-money business, Revolut is required to safeguard customer funds in a separate client bank account. Until now, this account was with Lloyds Bank in the UK for Irish customers, but this is expected to change with JP Morgan being one possibility.
Revolut announced in May of this year that it had reached 1m customers in Ireland.
What it means for users
Commenting on the news, Daragh Cassidy, head of communications and PR at Bonkers.ie, said Brexit will have a “detrimental impact on consumers and business all over Ireland” and this move by Revolut may be the first signs of “the chaos to come”.
“For most Revolut customers who top up through the app by using their main bank’s debit card, this won’t be an issue,” he said.
“However, for those who get 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-based accounts. This will now change to LT.”
Cassidy added that if you are getting paid into your Revolut 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.”
According to Cassidy, Revolut could obtain an e-money licence within the coming year or so, but no timelines have been agreed.
Updated, 11.40am, 2 October 2020: A previous version of this article stated that Daragh Cassidy said Revolut’s move would have a “detrimental impact” on consumers. This was updated to clarify that he said Brexit would have a detrimental impact.