IBAN, BIC, SWIFT, SEPA: What’s in an acronym?
Whether you’re setting up a small business from scratch or just looking for the best business current account on the market, it’s easy to feel a tad overwhelmed by the slew of acronyms and abbreviations that crop up again and again in the banking world. Many of these are terms that, let’s face it, don’t make a whole lot of sense if you don’t know what you’re looking at.
So to help get you started, here's a quick guide to walk you through some of the most common acronyms in the banking industry.
IBAN
What is an IBAN?
IBAN stands for International Bank Account Number. It’s an internationally-accepted system that simplifies bank transfers around the world by identifying individual bank accounts.
Initially introduced to standardise payments within the European Union, nowadays IBANs are used by banks in other parts of the world, too. Each IBAN is made up of up to 34 letters and numbers, including:
A two-letter country code
Two check digits, used to recognise mistakes in an IBAN
A series of numbers and letters that identify the bank and the account number
If you have a SumUp Business Account in the UK, your account comes with a UK account number and sort code, but in EU countries the account comes with an Irish IBAN, starting IE. You can find your UK account number or IBAN in the SumUp app or web dashboard.
Fortunately, IBANs issued by banks located in SEPA countries (which includes Ireland) must be accepted by any other state in the SEPA region. This means an Irish IBAN can be used to receive or send money to any other country in SEPA. Not accepting a valid IBAN is called IBAN discrimination, and it’s illegal.
BIC
What is a BIC?
BIC stands for Bank Identifier Code. A BIC consists of 8-11 characters and is used to identify a bank in an international bank transfer (as opposed to an IBAN, which identifies your individual bank account). A BIC code makes sure that any money sent during an international transaction gets to where it’s supposed to go.
SWIFT
What does SWIFT stand for?
SWIFT is the Society for Worldwide Interbank Financial Telecommunications, and it’s used by thousands of banks to facilitate money transfers between parties. Using SWIFT codes, messages that indicate how much money to transfer are sent between banks.
SWIFT codes are 8-11 characters long and identify your bank. You need to enter the SWIFT code of the bank you’re sending money to so that your bank knows where to wire the money, but the SWIFT code itself doesn’t transfer anything.
Are BIC and SWIFT the same?
Yes, they are. You’ll often see BIC codes referred to as SWIFT codes, SWIFT/BIC or BIC/SWIFT. They’re a bit like postcodes, in that it’s important to provide the correct one when you transfer money. If you get the SWIFT/BIC wrong, your transfer could get delayed, returned, or sent to the wrong place.
SWIFT/BIC codes are made up of a bank code, country code, location code, and sometimes a branch code. You can generally find your SWIFT/BIC code on your bank statements. If you have a SumUp Business Account, your BIC code can be found in the SumUp app or on the web dashboard.
SEPA
What is SEPA?
SEPA stands for the Single Euro Payments Area, an EU initiative which makes payments in and between the 36 participating countries safer, cheaper and much more efficient.
You can make transactions in SEPA via Direct Debit or credit transfer, and it generally takes no more than one business day for electronic payments and two business days for paper-based ones.
SEPA Instant Credit Transfer
SEPA Instant Credit Transfer, often referred to simply as SEPA Instant, is a new bank transfer scheme that enables euro transactions to be processed and the funds made available in less than 10 seconds.
SEPA Instant is available 24 hours a day, 365 days a year. In eurozone countries, the SumUp Business Account supports SEPA Instant with no fees applied either incoming or outgoing instant payments.
SCA
What does SCA stand for?
SCA, or strong customer authentication, is a regulatory requirement that helps financial service providers in the EU and UK increase the security of electronic payments. It was introduced along with revisions to the EU’s PSD2, an updated version of the Payment Services Directive.
SCA is in itself a fancy way of saying two-factor authentication. That means it’s a security protocol that uses two of three possible kinds of information. These factors can be:
Something you know, like a password or PIN
Something you own, like a mobile phone
Something inherent to you, like a fingerprint or facial ID scan
This extra layer of security helps prevent fraud by requiring extra steps at checkout, and it applies to the SumUp Business Account too, which means it protects any transactions made with your SumUp Mastercard. You can enable SCA in your Business Account by going to the business account section in the SumUp app and toggling SCA on in your settings. Then you’ll get a request for verification by SMS, and once you’ve confirmed it, your account will be more secure.
With SCA enabled, you’ll be able to verify each online transaction from your mobile phone. You can also switch the authentication option to fingerprint or facial recognition to make the process faster and more unique to you.
We recommend enabling push notifications so you’ll always know when your business account is used for an online transaction.
Knowing these terms will help you navigate the world of financial services and choose providers that are right for you. If you’re looking for a free business account that’ll let you easily manage your money and make free, fast, and secure transfers any time you like, you can open a SumUp Business Account in minutes.
