SEPA Credit Transfer
IBAN and BIC
The International Bank Account Number (IBAN) and the Business Identifier Code (BIC) allow the identification of any account in the 32 Single Euro Payments Area (SEPA) countries. These technical standards were developed by the International Organization for Standardization (ISO). The IBAN is ISO standard 13616; the BIC is ISO standard 9362. For more information see www.iso.org. The European Payments Council (EPC) video animation 'IBAN - Your New Best Friend' (see below) demonstrates how easy it is to use IBAN and BIC when making payments.
SEPA Regulation defines use of IBAN and BIC by payers and payees
In February 2012, the European legislator adopted the 'Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009' (see below) (the SEPA Regulation), which defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. In non euro countries, the deadline will be 31 October 2016. For more information on the SEPA Regulation, refer to this dedicated page on the EPC Website: SEPA Legal and Regulatory Framework.
The SEPA Regulation details, among other things, the use of IBAN and BIC by payers and payees. A payee accepting credit transfers must communicate the IBAN of the account to which the payment should be credited and the BIC of its payment service provider (PSP), "but only where necessary", to its business partners (see Article 5 (4) and point (1) (a) of the Annex to the Regulation). A payer wishing to make a payment by direct debit must communicate the IBAN of the account which should be debited and the BIC of its PSP, "but only where necessary", to the payee (see Article 5 (5) and point (1) (a) of the Annex to the Regulation).
SEPA Regulation: timelines for application of 'IBAN only' rule
The SEPA Regulation stipulates the timelines for application of the so-called 'IBAN only' rule. This provision is relevant for both PSPs and payment service users (PSUs). Article 5 (7) of the SEPA Regulation states: "After 1 February 2014 for national payment transactions and after 1 February 2016 for cross-border payment transactions, PSPs shall not require PSUs to indicate the BIC of the PSP of a payer or of the PSP of a payee." Article 16 (6) however provides EU Member States with the option to defer application of the 'IBAN only' rule for national transactions to 1 February 2016.
For additional comment on the provisions regarding IBAN and BIC introduced with the SEPA Regulation, refer to the EPC Blog 'Part II - Get Ready for SEPA by February 2014. Early Movers on the Customer Side Share Lessons Learnt. Why IBAN and BIC Remain Important for Bank Customers'.
SEPA Regulation: option for use of national account identifiers until February 2016
Article 2 (14) of the SEPA Regulation defines Basic Bank Account Number (BBAN) as follows: "BBAN means a payment account number identifier, which unambiguously identifies an individual payment account with a PSP in a Member State and which can only be used for national payment transactions while the same payment account is identified by IBAN for cross-border payment transactions." Article 16 (1) states that EU Member States may "allow PSPs to provide PSUs, until 1 February 2016, with conversion services for national payment transactions enabling PSUs that are consumers to continue using BBAN" instead of the IBAN.
IBAN and BIC for consumers
Banks, businesses and public administrations provide the tools to ensure a smooth transition to IBAN and BIC for consumers.
- Billers including businesses and public administrations will feature related information prominently on websites, invoices and stationary.
- Consumers find IBAN and BIC pertaining to their own account on their account statements and / or imprinted on their bank card.
- Banks provide easy-to-understand instructions on the use of IBAN and BIC on internet home banking channels or on print flyers, for example.
- In most SEPA countries, a national website dedicated to SEPA is available, which contains a range of IBAN and BIC related items, including educational material facilitating the use of these account identifiers. Links to national SEPA websites can be found on the European Central Bank (ECB) website (see link to 'ECB-SEPA-by-Country Hub' below).
IBAN and BIC for billers
Businesses and public administrations, i.e. billers, should take the following actions:
- Review invoicing and accounting procedures.
- Identify and adapt all systems that operate on the basis of account numbers and bank codes.
- Standardised processes for cross-border payments should be defined to add missing IBAN and BIC codes.
- For domestic payments: convert existing databases containing customer account information to IBAN and BIC. The EPC recommends that national banking communities provide centralised conversion services to their business customers. To obtain related information, businesses and public administrations should contact the appropriate bodies at national level. The ECB makes country-specific SEPA information, including SEPA-related contact links, available (see link to 'ECB-SEPA-by-Country Hub' below).
- Provide easily accessible information on IBAN and BIC to your business partners and customers; i.e. update your invoices, stationary and other documents used to communicate your own account information to others.
The EPC Newsletter features the series 'SEPA Case Studies' (see below). The series highlights best practice identified by businesses and public administrations which have successfully completed migration to IBAN and BIC.
Useful IBAN links for billers
Disclaimer: External links are provided for information only. The EPC takes no responsibility for their content.
- Belgium: Counterparty Converter Tool
- Germany: SEPA Account Converter and IBAN Service Portal
- Liechtenstein: Six Interbank Clearing
- Luxembourg: Luxembourg Bankers' Association website
- Malta: IBAN converters offered by Maltese banks
- Netherlands: IBAN/BIC derivation service
- Spain: Spanish SEPA website
- Switzerland: Six Interbank Clearing
- UK: Payments Council
- SWIFT IBAN web page
- UNCEFACT TBG5 IBAN Checker
Selection of articles from the EPC Newsletter and other sources
- Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009
- EPC Blog: Part II - Get Ready for SEPA by February 2014. Early Movers on the Customer Side Share Lessons Learnt. Why IBAN and BIC Remain Important for Bank Customers
- EPC Video: The IBAN - Your New Best Friend. A brief introduction to the International Bank Account Number (IBAN) and the Business Identifier Code (BIC)
- EPC Newsletter: Case Studies Highlighting Successful SEPA Migration Projects of Bank Customers
- ECB SEPA-by-Country Hub (SEPA-related links at a national level )