Revolut has announced that it is moving its Irish users' accounts to Revolut's business in Lithuania because its e-money licence will no longer be valid post Brexit.

The move is temporary while the digital bank awaits the outcome of a licensing process with the Central Bank of Ireland.

In a statement, a spokesperson for Revolut said, "While that process is ongoing, to ensure that Brexit does not impact 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 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."

Revolut is currently licensed in the UK by the Financial Conduct Authority. It has an electronic money or e-money licence in the UK, not a banking licence, and has until now been using that 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.

However due to Brexit, and the lack of any sign of an agreement between the UK and the EU on many issues including financial services, Revolut's UK e-money licence will no longer be valid in Ireland come the end of the year.

In December Revolut will therefore 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.

Also, as an electronic money institution, Revolut is required to segregate and safeguard its customers' funds in a separate client money bank account. 

In the case of Irish customers, the client money bank account used to be with Lloyds in the UK and Revolut, in theory, has no access to this money. 

Going forward, 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 said Brexit will have a detrimental impact on consumers and businesses and this move by Revolut is the first sign perhaps of the chaos to come. 
"The biggest impact for customers to be aware of is that their IBAN and BIC numbers are going to change" he said. "For most Revolut customers who top-up through the app by using their main bank’s debit card, this won’t be an issue. 

"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. 

 "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. 

Going forward 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, though no firm timelines have been agreed. 

 When this happens Revolut customers in Ireland will be migrated to its Irish business and protected and regulated by the CBI, but it will mean that their IBAN and BIC numbers will change once again.