If you have made or are about to make an international money transfer either through your bank or with a payment specialist like Fexco Corporate Payments, you will probably be familiar with terms like SWIFT code, BIC code and IBAN number. These terms represent essential components in the transfer of funds between financial institutions – but what are they and when should they be used?
This article will answer these questions and discuss related terms used in the transfer of funds domestically and internationally.
Following the implementation of SEPA in February 2014 an International Bank Account Number (IBAN) and a Bank Identifier Code (BIC) are now required in order to make and receive euro electronic payments. They replace the National Sort Code (NSC) and account number as the main payment identifiers when making SEPA payments, either by direct credit or direct debit.
SWIFT / Business Identifier Code (BIC)
The SWIFT Code is a standard format for Business Identifier Codes (BIC) and it is used to uniquely identify banks and financial institutions globally. BIC is the International Standard ISO 9362:2014 and is used for addressing messages, routing business transactions and identifying business parties.
A BIC Code (Business Identifier Code) is also commonly referred to as a SWIFT Code, SWIFT ID, SWIFT-BIC or SWIFT address. The latter is popular amongst importers and exporters and is an informal usage of the more popular BIC code as used by the financial services industry.
SWIFT (Society for Worldwide Interbank Financial Telecommunication), in its role as ISO registration authority, issues BICs to financial and non-financial institutions, which is why the terms SWIFT and BIC are often used interchangeably.
How is a SWIFT / BIC code structured?
When making a domestic or international payment, you may be asked to supply a BIC code to identify the financial institution where the account of the beneficiary resides. The BIC code is easily identifiable as it is made up of 8 or 11 characters broken down as such:
• Bank code (A-Z) : 4 letter code.
• Country code (A-Z) : 2 letter code.
• Location Code (0-9 or A-Z) : 2 digit code – either letters or numbers.
• Branch Code (0-9 or A-Z) : optional 3 digit code – either letters or numbers*.
*’XXX’ at the end of the SWIFT / BIC code represents a head office.
In the example above, the BIC code is given for Deutsche Bank AG in Hamburg, Germany. There is no difference between an 8-character BIC (DEUTDEHH) and a BIC11 ending with XXX (DEUTDEHHXXX). Many payment systems will automatically add the XXX when the BIC is being inserted in an international payment sent over the SWIFT network. Where numbers or letters replace the XXX in a BIC11, the payment will be routed to a specific branch.
I am receiving a payment / setting up a direct debit – where can I find my SWIFT / BIC Code?
You will find your BIC code on your bank statement (usually top or bottom right), on your internet or mobile banking transaction pages or alternatively call your local branch to request it. Photo ID is usually required.
International Bank Account Number (IBAN)
An IBAN is an international bank account identifier used to uniquely identify the account of a customer at a financial institution. It must be noted that the IBAN is not a new account number but simply a new format for an existing account number.
It is an internationally agreed system of identifying international bank accounts to better facilitate the communication and processing of cross-border transactions. It is the only permissible account identifier for SEPA payments.
ISO has designated SWIFT to act as the registration authority for national IBAN formats and the ISO 13616 standard specifies the structure of an ISO-compliant national IBAN format.
An IBAN consists of up to 34 alphanumeric characters broken down as such:
• Country Code (A-Z) : 2 letter code.
• Control Code (0-9) : 2 number code.
• Remaining: up to 30 letters and numbers which outline the domestic bank and account number
In the above example, this German IBAN has the country code DE. The following digits (41) are the check digits and validate the routing destination and account number combination in this IBAN. The BBAN is 500105170123456789 where the bank identifier is 50010517 and the account number is 0123456789.
It is important to note that there are no spaces in an IBAN when transmitted electronically. When printed it is expressed in groups of four characters separated by a single space, the last group being of variable length. Each country has different fixed lengths so make sure that the IBAN you have been given matches the country in which the beneficiary account resides.
Check out these IBAN formats by country as a guide when making an overseas payment to your particular destination.
I am receiving a payment / setting up a direct debit – where can I find my IBAN?
You can access your IBAN from an existing bank account statement, via an online banking platform or simply call your branch with a photo ID.
What if my beneficiary is based in a non-IBAN country?
Many countries continue to use their own standard identifiers for domestic and international payment processing; Routing/ABA number (USA), Bank State Branch (BSB) number (Australia), and National Clearing Code (New Zealand) are just some examples of codes used in conjunction with account numbers to process payments in non-IBAN countries.
BIC codes together with an account number may also be sufficient. It is best to contact your payment service provider or bank for advice if you are unsure about formatting beneficiary bank details. Inputting the incorrect detail can lead to lengthy delays and incur high costs.
Money transfer specialists like Fexco use validation tools to make sure account details are accurate before payment is sent through the banking system. This avoids unnecessary delays and guarantees straight through processing success rates of 99%.
Fexco helps business and personal clients to save on their international payments with bank-beating FX rates and tailored money transfer solutions. Sign up for a free account today or contact us on IRL: 1800 246 800 or UK: 0800 840 2887.