Over the years, globalisation and the extension of financial transactions beyond our borders began to make it necessary to issue agile and secure cross-border payments. That is why the IBAN code (International Bank Account Number) replaced the customer account code and brought it up to date. The IBAN is a common alphanumeric code that follows the EBS204 standard, established by the European Committee of Banking Standards, to unify the account system of European banks.
The IBAN is shared by all the countries belonging to the single euro payments area (SEPA); it ensures a standardised and correct data transmission. Although each country has a different number of digits (for example, in Malta there are 30, and in Belgium 12), this code has facilitated the management of trade and transfer operations within the European Union.
In Spain we operate with 24 digits, distributed as follows: the initial two letters ES, correspond to Spanish accounts; then two check digits; four for the bank code; another four for the code of the branch where the account was opened; two corresponding to a validation code (a mathematical algorithm); and finally, ten digits corresponding to the account number.
What is the BIC or SWIFT code?
In addition to the IBAN code, when checking an account, there is the BIC (Bank Identifier Code) or SWIFT (Society for World Interbank Financial Telecommunication), another eight or eleven-character string that defines the branch where the account was opened.
The BIC code is mainly used when issuing transfers outside the European Union and as an informative complement to the IBAN, since it allows the issuing bank to be sent an encrypted message so that the receiving bank knows that it will receive the transfer. Basically, this account number allows banks to easily and directly process payments without costs, which in turn lowers the cost for their customers. The BIC code is configured as follows: bank name; codes of the country and province where the account is located; and branch code (optional).
What is the SEPA Regulation?
In 2012, European legislation created Regulation No. 260/2012 to regulate the needs of direct transfers in Europe. This SEPA Regulation defines the use of the IBAN and the BIC and guarantees the security and transparency of transfers.
To learn more, most SEPA countries offer all the details on a website; in the case of our country, www.sepa.es.