IBANs, BIC, SWIFT and SEPA: What do all these acronyms mean?

IBANs, BIC, SWIFT and SEPA: What do all these acronyms mean? | Articles

17 September 2019 by Nadine Lucas

The world of banking is full of regularly used acronyms, but does everyone truly understand what they mean and what’s the difference between them? In this article, we explore basic European banking acronyms, what they stand for, and how they came to be.

IBANS relate to customer accounts, SEPA and SWIFT are payment-networks, and BIC and SWIFT codes are identifier codes used by banks and clearing networks worldwide to identify the sending/recipient members. Let’s go into a little more detail…

What is an IBAN?

An international bank account number (IBAN) is a standard international numbering system developed to identify bank accounts from across Europe. Although all bank accounts worldwide have bank account numbers, they are named differently in different regions. In Europe, bank accounts are generally referred to as ‘IBANS’. Banks in Europe originally developed the system to simplify transactions involving bank accounts from other countries.

An IBAN does not replace a bank’s own account number. It is an additional number, containing further information, which helps in identification for overseas payments.


SEPA stands for the Single Euro Payments Area. SEPA is where more than 500 million citizens, over 20 million businesses and European public authorities can make and receive payments in euro under the same basic conditions, rights and obligations, regardless of their location.

And SWIFT is the Society for Worldwide Interbank Financial Telecommunications.

The SWIFT system is a vast messaging network used by banks and other financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions. Every day, nearly 10,000 SWIFT member institutions send approximately 24 million messages on the network. SWIFT does not hold any funds or securities, nor does it manage client accounts.

SEPA payments can only be made within the SEPA area, while SWIFT enables money transfers internationally. The SEPA initiative encompasses transfers in Euro alone. SWIFT transfers can be executed in various currencies.

BIC and SWIFT codes

SWIFT and BIC codes are both ‘Bank Identifier Codes’ which is the code assigned to a bank or bank branch. This code is used as an identifier of the bank/branch. The BIC is an international code used to identify a bank or bank branch. A BIC/SWIFT code has 8 or 11 characters.

Of course, there are more payments and banking acronyms. We thought this would be a good start. Don’t want to miss out on the next blog? Follow us on LinkedIn & Twitter and check out our other publications.