Banking Basics: your guide to EU banking acronyms

The world of banking isn’t known for being an easy one. SEPA, IBAN, SWIFT, BIC… If you don’t know what these acronyms mean, you might not feel like you can make informed banking decisions and while banks provide services that most of us can’t do without, the jargon can be a bit bamboozling.

Thankfully, N26 is on a mission to simplify banking for everyone. That’s why we’ve put together this insightful guide around the key European banking acronyms you’re most likely to come up against, as well as explanations of what they each mean.

An IBAN is an International Bank Account Number. Because every country has its own banking system, IBANs make it easier to transfer money across borders: it’s a standardized international system. Originally, the system was designed for European Union countries, but these days, countries as far afield as Brazil and Qatar use it as well.

If you have a bank account in an EU country, you have an IBAN (whether you use it or not). It’s made up of up to 34 characters.

• The first 2 are letters and denote the bank’s home country;
• The next 2 are “check digits”, which act as a control;
• Then a series of numbers that identifies both the bank and your specific account. These numbers are likely the same ones you’ll use for domestic banking: typically, a bank code and then an account number.

IBANs for N26 accounts in Germany all begin with ‘DE’, for instance. Then, after the two check digits, all our IBANs have the N26 bank code, 1001 1001. After that comes your 10-digit account number.

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In some countries, like Germany and Spain, IBANs are commonly printed on bank cards and on bank statements. N26 customers from countries using the BIC and IBAN banking system can find these details in the My Account section of their N26 app. Customers in the UK will find the more commonly-used Account Number and Sort Code here instead.

SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. It makes international transfers between banking institutions easier. The “SWIFT network” is the network by which most international transfers (outside Europe) are made.

SWIFT is in charge of registering BICs – Bank Identifier Codes – which is why the acronyms SWIFT and BIC are often seen together.

BIC stands for Bank Identifier Code (or officially, Business Identifier Code). Unlike an IBAN, a BIC identifies your bank, rather than you, individually.

BICs are either 8 or 11 characters long. These characters identify the bank, the country, and the location within that country. In an 11-character BIC, the final three characters denote the specific branch.

Yes, it is. You might find it referred to as a SWIFT/BIC, SWIFT-BIC, BIC/SWIFT, and similar combinations of this. “SWIFT” refers to the organization that regulates these codes, whereas “BIC” refers to the code itself. In practice, they tend to mean exactly the same thing.

Your BIC should be in the same place as your IBAN: on your bank card, or on your bank statements. N26 uses Transferwise instead of SWIFT, so if you need to make a foreign currency transfer, you can use TransferWise (in the app or from their website). You can also find the N26 BIC code under My Account on the mobile app or N26 Web.

SEPA is the Single Euro Payments Area. Countries in SEPA can transfer money between each other via a system designed to be more efficient than the worldwide SWIFT network. The goal is to make payments within SEPA as easy as domestic payments.

The SEPA zone constitutes all the countries in the European Union (EU), regardless of whether or not they use the euro:

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK

Other non-EU countries that form part of the SEPA zone are: Iceland, Liechtenstein, Norway, Switzerland, Andorra, Monaco and San Marino.

A SEPA transfer is a transfer of funds made within the SEPA zone. It’s subject to the SEPA system rather than the SWIFT one, which should mean transparent fees and a prompt arrival time.

To send a SEPA transfer, you’ll need the recipient’s name as well as their IBAN. You might be asked for the BIC, too.

SEPA transfers are relatively fast, but can take a little longer if the transfer involves a currency conversion. N26 generally completes SEPA transfers in euros within 1-2 working days.

It depends. Banks can charge a fee for transfers in euros, as long as they’re charging the same fee on transfers to all countries across the area (and that includes domestic transfers). N26 doesn’t charge any fees for SEPA payments in euros, but other banks might – make sure you check.

There might be a fee for currency conversion. For example, if you’re transferring money from the UK to a Eurozone country, you may have to pay a fee for the conversion of pounds to euros.

Fees have to be transparent for SEPA payments, so you should always have a good idea of how much money your recipient will actually get, as well as how much the transfer will cost you.

IBAN, SWIFT, BIC and SEPA might sound like a bowl of alphabet soup, but behind the names they’re all there to make banking easier. Just don’t let the endless acronyms put you off.

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