What Is a Business Identification Code (BIC)?

Table of Contents

1. What is a Business Identification Code (BIC)?
2. What are BICs needed for?
3. What is the difference between a BIC and a SWIFT code?
4. What does a Business Identification Code look like?
5. Are there fees associated with using BICs?
6. Streamlining global payments with Paystand

Key Takeaways

• A Business Identification Code (BIC) is a unique code for financial institutions that facilitates international money transfers and transactions through the SWIFT network.
• BICs are essential for cross-border payments, allowing banks to identify each other and ensure funds are routed correctly.
• BICs help streamline international payments, improve security, and ensure compliance with anti-money laundering regulations.
• While BIC and SWIFT codes serve similar purposes, BIC primarily identifies the beneficiary bank, whereas SWIFT facilitates financial message exchange.
• Sending international payments using a BIC may incur fees, including handling fees from intermediary banks.

In international finance, digital payments are transforming the landscape, enhancing cash velocity and streamlining processes through ERP payments. A critical component of this transformation is the Business Identification Code (BIC). Understanding BICs helps ensure accuracy and efficiency in global financial transfers, allowing businesses to maintain optimal cash flow and compliance with regulatory standards.

As the complexities of business financial management grow, mastering tools like the BIC can position your business to thrive. From ensuring swift and secure transactions to reducing fraud risks, knowing your BIC is essential to navigating today’s digital economy. Ready to explore more? Let's continue.

What Is a Business Identification Code (BIC)?

A Business Identification Code (BIC) is a unique identification code for financial institutions that facilitates international money transfers and other financial transactions. It is an essential element of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, which enables secure and efficient communication between financial institutions worldwide.

BICs are essential for cross-border payments as they allow banks to identify each other quickly and accurately. When initiating a wire transfer, the sender's bank will use the recipient's BIC to ensure the funds are routed to the correct financial institution.

BIC is the International ISO standard ISO 9362. This standard specifies the elements and structure of a universal identifier code, the BIC, for financial and non-financial institutions for which such an international identifier is required to facilitate automated information processing.

How do I find my Business Identifier Code?

To find your BIC, you'll need to follow these steps:

1. Identify bank: Each account may have a unique BIC if you have multiple business accounts.

2. Check bank statements: The BIC is often printed near your account information on the top or bottom of the statement. If you can’t locate the BIC on your bank statements, contact your bank's customer service and provide your account number. They should be able to provide the BIC associated with your account.

3. Use BIC look-up tools: Many websites and online tools allow you to search for BIC codes based on your bank's name or location. Some popular options include the SWIFT website, BIC Look-up, and the International Bank Account Number (IBAN) Calculator.

4. Check business documentation: Sometimes, the BIC may be included in business registration documents, such as the company's incorporation certificate or tax identification number (TIN) registration.

5. Double-check BIC: Once the BIC is located, verifying its accuracy is essential by double-checking it against the official SWIFT BIC directory. This directory lists all valid BICs and can help ensure you have the correct code for your bank.

    

How do I Get my Business Identifier Code?

Obtaining a BIC is typically straightforward. Banks and financial institutions usually provide their BICs to customers as part of their account information. If you need to find the BIC for a specific financial institution, you can often find it on their website or by contacting customer service.

What Are BICs Needed For?

BICs facilitate international payments through the SWIFT system, a secure network enabling banks and financial institutions to send and receive information, including money transfer instructions. BICs allow individuals and businesses to make electronic or card payments even when the sender and receiver use different banks.

• Banks' unique identification: It serves as a globally recognized identifier, allowing banks to differentiate themselves from one another and ensure that financial transactions are directed to the correct recipient.
• Streamlined international payments processing: When sending money abroad, the sender's bank uses the recipient's bank's BIC to route the funds directly to the intended destination.
• Improved accuracy and security: They enable banks to verify the authenticity of the recipient's bank and ensure that funds are sent to the intended recipient, reducing the risk of fraud and errors.
• International regulation compliance: BICs help financial institutions adhere to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations by providing a means to track and monitor cross-border transactions.
• Simplified communication and standardization: BICs simplify sending and receiving international payments, reducing the need for manual intervention and enhancing operational efficiency.

What Is the Difference Between a BIC and a SWIFT Code?

The Bank Identifier Code and the SWIFT (Society for Worldwide Interbank Financial Telecommunication) code are unique identifiers for international wire transfers and financial transactions. However, there are some key differences between the two codes.

💡 Key differences

• BIC is primarily used to identify the beneficiary bank, while SWIFT is used to send and receive financial messages and instructions.
• SWIFT is the most widely used code globally, particularly for cross-border payments outside the European Union.

What Does a Business Identification Code Look Like?

The BIC consists of 8 or 11 characters that identify the bank, the country, the city, and the branch (if applicable). The first four characters represent the bank code, the next two represent the country code, the next two represent the location code, and the last three are optional and represent the branch code.

Here's an example of a BIC:

• ABCDBEBBXXX

In this example:

• ABCD is the bank code
• BE is the country code (Belgium)
• BB is the location code (Brussels)
• XXX is the optional branch code

Are There Fees Associated With Using BICs?

Most banks will require a fee to send international payments, and it can cost anywhere between $35 and $50 to send an international wire that uses a BIC. On top of this, when your transfer is being sent, you could also incur a handling fee from corresponding banks. Bank transfers that use SWIFT/BIC typically undergo one to three corresponding banks, which means these fees can pile up.

Plus, information on how much these handling fees cost is not usually shared upfront with the payer, so it’s unlikely that the payer will know how much it will cost to send their international wire transfer.

Streamlining Global Payments with Paystand

Mastering international financial transactions starts with understanding the tools that drive cash velocity and efficiency. Paystand’s innovative digital payment solutions, fully integrated with ERP systems, can revolutionize your approach to global transactions. To learn more about how digital payments can optimize your supply chain, download our comprehensive ebook here and take your business to the next level.