Answer given by Vice-President Dombrovskis on behalf of the Commission

12.7.2018

Reducing the risk of erroneous transactions in national and cross-border context has been a priority of the Payment Services Directive[1]. The switch to International Bank Account Number (IBAN) for transfers between bank accounts has led to a significant reduction in the number of erroneous payments in the EU, which were due to incorrect name of the recipient.

At the same time, the design of IBAN protects the user from the most common mistakes when introducing the account number on an electronic device or on a paper form, as it includes check digits (the first two digits after the country code).

Wrong IBAN numbers (too short, too long or with erroneous digits in the account number) will be rejected and transfers will not be initiated. A transfer into an erroneous account would only be possible when the user has given a different but plausible, correctly structured IBAN which also happens to have the correct check number.

The risk of mistakes can be further reduced through the use of aliases (such as names or descriptions) or proxies (such as mobile phone numbers) for given payment methods so that the knowledge of the account number is no longer required to initiate a transfer.

Aliases and proxies can be set by users in their bank branches or online banking environment and require them to indicate correct IBAN numbers only once. They can be also set with the assistance of bank employees. For the payment of paper bills, correct IBAN are usually already printed on the paper transfer form. Some banks also provide further assistance and help for people with disabilities and aged persons.

The Commission is consequently of the view that legal changes are not required at this stage.

• [1] http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015L2366&from=EN