Each and everyone of us is involved in money transfers, be they international or local, and probably have come across of such phrases as IBAN, SEPA, BIC, SWIFT, etc. What are these, what do they mean and what does one have to know about them? Here’s a short overview about everything one needs to know.
Let’s start with IBAN (International Bank Account Number). Since banking language is pretty boring, we’ll explain everything in layman’s terms. You need an IBAN number in order to receive and make international money transactions. Basically it’s a unique combination of letters (country code) and numbers. IBAN format might differ from country to country, however its function is the same everywhere.
IBAN is also the main identificator in international transactions. Meaning that you can make a mistake while typing beneficiary’s name, but no mistake is allowed in case of IBAN number, otherwise money might go to the wrong person. So be mindful here!
Another common phrase in international banking is SEPA, it stands for Single Euro Payments Area. Very brief history lesson here: after adopting euro as its official currency, European Union needed to simplify international money transactions in its base currency. Thus SEPA standard for money transfers in euros has born. Currently SEPA space consists of 34 countries: whole EU, plus Norway, Iceland, Lichtenstein, Monaco, Switzerland and San Marino.
To put it simply, SEPA means that money in euros within these countries is transferred by keeping up with the same rules and standards. Therefore, payments are cheaper and faster that compared to other countries and currencies. It also means unified format for payment instructions and bank account statements.
To put it in even simpler terms: transactions in SEPA space are much simpler that international transactions to other countries outside SEPA. In SEPA euros travel way faster and cheaper.
SWIFT/BIC is an abbreviation for Bank Indentifier Code. It helps to pinpoint a specific bank, while making an international transaction thus ensuring that money goes to the right place.
All of these rules and benefits apply to both old fashioned banks and modern online banks, where customers can open an account and start using it in 5 minutes.
MisterTango is EU registered entity, therefore belongs to the SEPA zone and all its customers can reap its benefits, just as in any bricks and mortar bank, only easier and much faster. Also MisterTango payment accounts have European IBAN number, meaning fast and easy international and local transfers.