SEPA Credit Transfer



The International Bank Account Number (IBAN) and the Business Identifier Code (BIC) allow the identification of any account in the 34 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 The European Payments Council (EPC) video animation 'IBAN - Your New Best Friend' (see links 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 Union (EU) co-legislators, i.e. the European Parliament and the Council of the EU representing EU governments, 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). It 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. Information on transitional arrangements in EU Member States permissible under the SEPA Regulation is published by the European Commission (see link below).

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' (see links below).

Conclusions agreed at multi-stakeholder workshop to discuss minimum requirements for cross-border 'BIC from IBAN derivation' solutions (September 2013)

The 'IBAN only' rule introduced on the basis of Article 5 (7) of the SEPA Regulation (see above) prohibits PSPs to require that PSUs provide the BIC. PSPs however, will have to continue to indicate the BIC of the account to be debited or credited when processing a SEPA payment transaction in the interbank space. An internal survey carried out by the EPC at the end of 2012 indicated that no mature solution seemed to be in place which allows deriving the BIC from any IBAN with regard to cross-border SEPA transactions.

In the Summer of 2013, the EPC reached out to all stakeholders via the EPC Newsletter (see links below) and other EPC communication platforms to indicate whether there would be interest to initiate a dialogue on the minimum requirements for cross-border ‘BIC from IBAN derivation’ solutions. Subject to sufficient interest being expressed by both the demand and the supply sides in SEPA, the EPC offered to host a related workshop open to all interested parties. This workshop with more than 50 participants representing solution providers, corporate payment service users, national central banks, the European Central Bank (ECB), the European Commission and PSPs took place on 24 September 2013. For further information on the topics discussed during this workshop and the agreed next steps, please refer to the workshop summary (EPC291-13) included with the links below. Following the conclusions of this workshop, the ECB has made available on its website a list of national authorities in SEPA countries that issue bank identifiers used in IBANs (see links below).

SEPA Regulation: option for use of national account identifiers until 1 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. Information on transitional arrangements in EU Member States permissible under the SEPA Regulation is published by the European Commission and the European Central Bank (see links below).

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.

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.

Useful IBAN links for billers

Disclaimer: External links are provided for information only. The EPC takes no responsibility for their content.

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