The SEPA (Single Euro Payments Area) is a European project of unification of means of payment.
SEPA is the Single Euro Payments Area, including EU member states, plus Norway to Iceland, Liechtenstein, Switzerland and Monaco.
The EPC (European Payments Council or European Payments Council), which brings together the European banking communities as well as major European banks launched the SEPA project in 2002. He defined the rules for three payment instruments: credit transfers, debits and card payments.
Transfers (SCT or – “SEPA Credit Transfer”) are available since 2008 and standing orders (or SDD – “SEPA Direct Debit”) since late 2010.
The Council and the European Parliament adopted in February 2012 a Regulation setting end dates for migration to SCT and SDD. In line with this EU law, national credit transfers and withdrawals are permanently replaced by their European equivalent of 1st August 2014 in the countries of the Euro zone. For other countries, the deadline is October 31, 2016. After the due date passes, it will not be possible for a service user payment of transfers and / or samples to the national format.
The BIC Code (Bank Identifier Code) is the unique international codification for financial institutions.
SWIFT handles the registration of the BIC codes under the standard ISO 9362.
These codes are used when transferring money between banks, particularly for international wire transfers, in and out of the SEPA area.
The BIC code can be found on the bank account statements.
The BIC code is 8 or 11 characters:
|Bank code||Country code||Location code||Branch code|
A: Letter - X: Letter or digit
- Bank code: 4 letters identifying the Bank,
- Country code : 2 letters of the country of the Bank, under ISO 3166 alpha-2 standard,
- Location code: 2 letters or digits for the location of the bank in the country,
- Branch code: 3 letters or digits, optional ('XXX' for primary office).
Where an 8-digit code is given, it may be assumed that it refers to the primary office.
|Bank code||Country code||Location code||Branch code|
|Banque de France||France||Paris||Securities Dept|
The EU regulation 260/2012 requires the input of the BIC is no longer mandatory and must be added to any IBAN by the financial institutions:
- From 1st February 2014, on all SEPA domestic orders,
- As of 1st February 2016, on all SEPA cross-border orders.
BIC remains mandatory for financial transactions outside the SEPA area (SWIFT transfers).
SEPA PLUS DIRECTORY
SWIFT issues SEPA Plus which is a directory of all SEPA members. SEPA Plus is the solution for checking:
- BIC code of all SEPA members,
- available schemes in a bank (SCT, SDD Core or SDD B2B),
- routing service by CSM and leading bank,
- BIC deduction from IBAN (European Union regulation 260/2012)
SEPA Plus is the only international legal directory used for checking SEPA orders. It provides all the informations issued by the CSM.
Business Clients issuing SEPA files, and financial institutions, are required to check destination BIC before validating a SEPA transaction, otherwise it can be rejected.
CHECKING A BIC CODE
Banks apply a built-in checking for all BIC codes in customers web transactions.
If BIC code is rejected, this is mostly because the destination Bank is not a SEPA member.
Sometimes, BIC code is rejected, although it is a valid code:
- SEPA directory is not up to date
The directory is updated every month by SWIFT. Some banks do not apply updates at the same frequency. Troubles may also occur with recent registrations in a CSM directory.
- Bank use a wrong algorithm to control BIC and IBAN.
Some financial institutions conclued wrongly, that the country code in BIC should be the same than in IBAN, without checking in the SEPA Directory. For example, in french over-seas territories, a valid IBAN starts with "FR" as country code, and BIC country code can be different (GP, MQ, RE, PM,...).
BDPM PM PM XXX is a valid BIC code of the french territory of Saint-Pierre et Miquelon (country code PM) , and
FR14 2001 0101 1505 0001 3M02 606 is a valid IBAN, because
FR code applies for IBAN in Saint-Pierre et Miquelon (see What is IBAN).
- Bank does not issue SEPA orders
This is a rare case, but it may happen. Bank is not capable to send orders via SEPA, particularly cross-borders transactions. Bank will reject the BIC or will use SWIFT network, as for a non-SEPA international operation.
The IBAN (International Bank Account Number) is an internationally agreed means of identifying bank accounts across national borders.
It was originally adopted by the European Committee for Banking Standards (ECBS), and later as an international standard under ISO 13616, which indicates SWIFT as the formal registrar.
Initially developed to facilitate payments within the European Union, it has been implemented by most European countries and many countries in the world, especially in the Middle East and in the Caribbean.
The IBAN consists of up to 34 alphanumeric characters:
- two-letter ISO 3166 country code,
- two check digits,
- a country-specific Basic Bank Account Number (BBAN). The BBAN format is decided by each national banking community.
In France, the IBAN length is 27 characters. In the UK, the IBAN length is 22 characters.
List of countries using IBAN:
(*) countries members of SEPA COM Pacific. The SEPA COM Pacific use the SEPA standard for Credit transferts and Direct Debits in euros:
- between the Republic of France “SEPA area” and the members of SEPA COM
- for exchanges between SEPA COM members