Most people wonder what a BIC is when they are asked to provide one when making a payment, usually a cross-border payment. However, when you dig a little deeper, the answer to the question: What is a BIC? becomes rather more complex.
BIC until recently referred to the Bank Identifier Code, a unique code specifying a bank, and optionally a branch. Recently this has undergone a change of identity to Business Identifier Code and has widened in scope to mean a unique code to identify any business. In both instances the BIC is managed by SWIFT and is defined by the ISO9362 standard. Originally BIC was conceived to identify an address on the SWIFT inter-bank network, the name change to Business Identifier Code reflects that it now has much wider uses.
So what does a BIC look like?
There are two different formats: full BICs are 11 characters long, but they can be 8 characters – in which case they are known as a Business Party Identifier.
What is a BIC used for?
In payments a BIC is used to identify a specific business, most commonly a bank. In some countries the bank code portion of a BIC forms part of the IBAN (International Bank Account Number). Here it identifies the financial institution to receive the payment, for example RBOS refers globally to the Royal Bank of Scotland.