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IBAN (International Bank Account Number) & BIC (Bank Identifier Code) – Background
The European Commission’s strategy is that there will be a single market for cross-border payments in euros, which is known as SEPA (Single European Payment Area) and the Commission is working with the European Payments Council, who represent banks within the EU, to implement this.
As of 1 January 2007, it became a mandatory requirement to quote this information on all payments affected by these criteria.
Frequently asked questions (FAQ’s)
What is an IBAN?
What is a BIC?
Why has this been introduced?
Does it affect all payments or just euro payments?
Why should I use an IBAN and BIC?
What is required for payments made to the EU & EEA?
What effect does this have on receiving monies?
What if I do not provide IBAN and BIC information to the payer?
Will Banks outside of Europe accept an IBAN?
IBAN stands for International Bank Account Number and is a standard way of identifying a bank account. When a cross-border payment is made in Europe, an IBAN is used to identify the account to which the payment is made.
The IBAN consists of a series of alphanumeric characters that uniquely identifies an account held with a bank. An IBAN is always used in conjunction with a BIC.
Your IBAN and BIC can be located at the top of your statement.
To check an IBAN please click here
BIC stands for Bank Identifier Code and is used to identify the bank and branch involved in the transaction. The Coutts BIC is COUTGB22.
The banking industry within the EU and EEA has been working through the European Payments Council with the European Commission to standardise and simplify the way cross-border payments are made. There is a goal to create a SEPA (Single European Payment Area), which will have a single common way of making payments across the EU. IBAN and BIC are to be the only identifiers allowed on cross-border EU/EEA payments.
Does it affect all payments or just euro payments?
The resolution applies to euro payments, however any payment to the EU/EEA has the potential to be converted to local currency. We recommend the use of IBAN and BIC for all payments you make or receive from the EU/EEA. This includes sterling invoiced for settlement within the EU/EEA.
Sterling payments within the UK have their own standards and are unaffected by this resolution.
Why should I use an IBAN and BIC?
An IBAN and BIC are all that you need to identify both the account and account holding bank details of the beneficiary. Use of this information by the beneficiary and their bank should ensure an efficient transfer of funds to the account.
What is required for payments made to the EU & EEA?
If making payments within the EU/EEA, you must use the IBAN and BIC provided by the beneficiary. Ignore any bank name and address information as this is provided in the BIC. Similarly do not quote both the IBAN and account number, as the account number is contained within the IBAN.
What effect does this have on receiving money into my account?
If you are receiving funds from the EU/EEA, then you should provide the payer with your IBAN and BIC details, otherwise this may delay the funds being received into your account. Do not provide any bank name and address information, as this is included within the BIC. Similarly do not give your account number as well as IBAN, as your account details are within the IBAN.
What if I do not provide IBAN and BIC information to the payer?
The paying bank may decline to make the payment. If the paying bank agrees to make the payment, then it may levy extra charges for making the payment.
Will Banks outside of Europe accept an IBAN?
An IBAN can be used instead of your account number. Any bank will simply pass on the account number as they are given it. All banks within the International Payments community should be aware of IBAN initiatives, even if their respective country is not using IBAN formats at present. They should therefore accept your IBAN and BIC instead of your usual account number and sort code.
