Could this be brexit teething problems or part of a bigger issue?
I would guess both.
The IBAN issue seems to be resolvable with a little bit of knowledge by those setting up the payments.
As for charges - banks have capitalised on the fact that there is no longer a regulation that prevents it. That’s not ‘teething trouble’, that’s capitalism.
Is this an EU regulation that says you can’t charge for EUR transfers from other EU/EEA countries?
It’s EU regulation, specifically, I believe it’s 924/2009 that regulates EUR payments in the SEPA zone.
It makes rather dry reading and I’ll admit that I haven’t looked into whether it protects UK banks (as a SEPA area country) from charges by EU banks, or whether the protections are only extended to intra-EU payments.
I had a payment from Spain just fail entirely, which was odd because it was coming via Transferwise to Starling (not directly from a Spanish bank). Payer sent me the failed transaction report from Transferwise.
I used my Transferwise IBAN to receive instead and that worked. Then I ordered a Transferwise debit card for free and used it to top up my Revolut EUR account, convert in Revolut and send to Starling - avoiding all fees
The IBAN issue is a major problem for any big legacy company. Most systems are set up where the first 2 characters of the IBAN (representing the country code) are hardcoded to their country, so they can’t set up the payment to begin with. The regulation around IBAN discrimination isn’t really enforced.
The regulation AFAIK guarantees that EUR denominated within SEPA countries must be charged at the same rate as it would be charged to make a domestic payment
As Starling mentioned, we’re still in SEPA. The legislation should still apply to us, but Starling could start charging (Denmark is infamous for this iirc, as since their national currency isn’t EUR, they just charge for the transfers domestically or for SEPA)