Comment by seec
13 days ago
The only reason we have that is because fintech is eating the meal of traditional banks. They came up with ways to transfer with just a card (which benefits Visa and Mastercard, US companies) and do inter-account instant transfers for free.
SEPA normalization took forever, and even now instant transfers are still very often paid past the limit in your card bundle (probably around 3 if you don't have an expensive card).
Brussels rarely works for the little people; they just support whatever the big players at the moment want, unless they are foreign and can come up with a reason to tax them.
It is delusional to think politicians in Brussels care about the little guys; it is always about maintaining or gaining power, otherwise they wouldn't come up with absurd regulations that hit the small players much harder than any of the big ones.
SEPA was a pain for us citizens anyway because now we have to use huge long account numbers even locally within the same country. I never understood why that had to be the case, just leave that for international transfers.
Well, that's because with the EU there is a law to allow any citizen from any participating country to receive a salary/payment. to any EU-based bank.
So you do need SEPA normalization; otherwise that can't work. It's hardly a problem, and the fact that it required a regulation just shows how ineffective governments are in practice.
Fintech banks came up with an easier-to-use, more efficient, and more convenient system in less time than it took them to do this. And they manage to be cheaper.
The problem with banks is entirely regulation related; they are established players, working with/for the government, and basically get rewarded for stealing. Once I had a problem with my legacy bank, who robbed me of over 1k euros because they were generating 150-euro letters to tell me they refused a government tax debit for a lack of provision (mind you, the rejected amount was 50 euros, less than a third of their fee for rejecting it).
As far as I'm concerned, banks are legal criminals, enabled by the even bigger criminals running governments.
Because the entire point of the EU is to make transactions across member states as easy as domestic ones, and mandating support for 27 or so bank account formats in all contexts where they're collected sounds like a nightmare.
Also, how much longer are they really than legacy national standard ones? In the countries I'm familiar with, they've added exactly four characters: The country code in positions 1-2 and the robust, standardized check digits in position 3 and 4.
Both are extremely worth it, in my opinion. Take a look at ACH in the US if you want to see a great example for how not to do it: No checksums, two fields instead of one (ABA routing number and account number), separate routing numbers per domain (some banks have different numbers for wires, and some even for checks and ACH) etc.