Within the SEPA system, all transactions require the sender’s and beneficiary’s IBAN, or International Bank Account Number, which is a unique code that serves as an address from and to which the payment is sent. IBAN contains the bank identifier, the country code, and the account number in the bank itself, which makes it sufficient to execute most payments, especially Credit Transfers.
An IBAN contains the bank chain number or code, a two-digit country code, a checksum to ensure its integrity, and the account number in the financial institution itself. A regular IBAN looks like this:
Example: DE89 3704 0044 0532 0130 00
Here, DE — is the code for Germany, 89 is the control number, calculated using all other digits, 3704 0044 is the code of the bank, as well as of the bank office the account was opened at, and 0532 0130 00 is the account number. Such a precise coding system minimizes the possibility of errors and ensures that every transaction reaches its recipient.
It is worth mentioning, that in different countries IBANs may contain extra letters together with digits; however, the length and overall appearance is generally identical.
Business Identifier Code, or BIC, is a unique short code that serves for the identification of banks, their branches, credit unions, and other money institutions. For SEPA CT within the Eurozone, these are usually not needed, but sometimes a bank may require this information to issue Direct Debit payments.
A BIC contains four digits that stand for the bank code, a two-digit country code, and two to five digits (letters or numbers) that indicate the exact bank office. Here’s an example:
STUALT21XXX
Here, STUA is the designated code for Swaggybank, LT is the country code of Lithuania, and 21XXX is the company’s designation for the central office in Vilnius.