What is an IBAN? What is a BIC?

Oliver June 2020 Fintech Content Editor 3 min

Table of contents

An IBAN (International Bank Account Number) and BIC (Business Identifier Code) are codes used for bank transfers. All transfers within Germany and the SEPA zone now require the use of an IBAN code. As of 2016, a BIC is required only for transfers to banks outside the SEPA zone (EU, other EEA states, Switzerland, Isle of Man, Monaco, Jersey, Guernsey, San Marino).

How long is an IBAN?

This unique identifier can have up to 34 characters, depending on the country. In Germany, an IBAN has 22 characters, while an IBAN in Austria has only 20 characters. An IBAN consists of a bank account number and a bank identification code. The acronym IBAN stands for International Bank Account Number, which is an international identifier of a specific bank account.

What does BIC mean?

BIC stands for Business Identifier Code and refers to a number attached to a bank that allows it to be identified internationally. The BIC system was developed together with the SEPA scheme in 2008. Developed for use within SWIFT payment transactions, a BIC is simply another term for a SWIFT address. SWIFT (Society for Worldwide Interbank Financial-Telecommunication) is a Belgian-based organization that has been regulating international transactions between banks since 1973.

Things to know about IBAN

The IBAN standard is defined by ISO 13616-1:2007. The IBAN is used in electronic file transfers – that is, all online bank transactions – as well as with payment transactions made using paper forms. All SEPA transfers are required to use an IBAN. Fees for such transfers cannot exceed the fees charged for domestic transfers. At present, 34 countries are participating in the SEPA scheme. This includes countries that do not use the euro as their national currency.

Things to know about BIC Codes

As an international standard, BIC allows for the unique identification of banks all over the world. ISO 9362 and ISO 13616 are the relevant standards involved. The changes underway in payment transactions over the last ten years (since 2008) have made it clear that SWIFT codes are still needed for certain international payments outside the SEPA zone. For payment transactions made within either the SEPA zone or a SEPA participant’s country, the IBAN identifier is sufficient.

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