When you send money abroad, a few acronyms immediately appear: IBAN, BIC, SWIFT, SEPA. These are not bank names but different standards and payment systems that define how a country connects to international money transfers. The overview below helps you understand what kinds of country groups exist and what it means if a country is an “IBAN country”, a “SEPA country” or is only connected through the SWIFT network.
Why do international payment systems exist?
Cross-border transfers have to pass through several actors and several national rulebooks before the money reaches the final account. If every country followed completely different logic, the process would become slow, expensive and full of potential errors. This is why international systems and standards were created: they unify the structure of account numbers, bank identifiers and the way banks exchange messages.
Some systems focus on identification (IBAN, BIC), others on euro payments within Europe (SEPA), and others operate as a global messaging network (SWIFT). In practice a country is usually a member of several systems at the same time – for example IBAN + SEPA + SWIFT – but there are countries that have joined only some of them.
What is worth keeping in mind from the start?
- The different acronyms refer to different layers: account format, payment zone, messaging network.
- A country can be part of several systems at once (for example IBAN + SEPA + SWIFT).
- The same transfer can be governed by several standards, each regulating a different part of the process.
IBAN – the unified bank account number format
IBAN (International Bank Account Number) is an international account number format that tells the system in which country, at which bank and on which concrete account the money should land. Every IBAN starts with a country code (for example HU, LU, DE), followed by two check digits and the domestic account number format of that country. Its length varies from country to country but is a maximum of 34 characters.
IBAN was originally designed for European use but today it is used far beyond Europe: many Middle Eastern, Caribbean and African countries have also switched to IBAN-based account numbers. In some countries IBAN is mandatory even for domestic transfers, while in others it appears only for cross-border payments. Where there is no IBAN, older-style domestic account numbers and bank codes are still in use.
The most important things to know about IBAN
- IBAN is not a separate account but the format of the account number.
- Always enter it exactly as provided by the bank – a single typo can cause the transfer to be rejected.
- If you send money to an IBAN country, banks will almost always require the IBAN before they even start the transfer.
BIC / SWIFT code – the bank’s label in the world
The BIC (Bank Identifier Code), more widely known as the SWIFT code, is like a bank’s international number plate. It consists of eight or eleven characters and identifies exactly which bank out of the world’s thousands of banks should receive the message. The BIC standard is maintained by the SWIFT organisation, which is why most people simply call it a SWIFT code.
On the SWIFT network banks send messages to each other – a transfer is essentially a series of messages between the sending, intermediary and receiving banks. SWIFT therefore does not move the money itself but the standardised messages about the money movements on the basis of which banks book the transactions. In practice banks in almost every country and most major financial institutions are connected to the SWIFT network.
What to watch out for when entering a SWIFT code
- Always take the BIC from the beneficiary bank’s official website or statement, not from a random web search.
- If the bank has several BICs, check which one should be used for foreign currency or domestic transfers.
- In a SWIFT transfer, the BIC and IBAN together define where the money goes, so you need both.
SEPA – the unified euro payment area
SEPA (Single Euro Payments Area) is a European initiative designed to make euro transfers and direct debits between participating countries work just like domestic payments. If both the sending and receiving banks are located in SEPA countries and the transfer is in euro, the transaction will typically be processed as a SEPA payment.
All EU member states belong to the SEPA area, and several EFTA countries and a few smaller European states have joined as well. There are separate SEPA schemes for regular credit transfers (SEPA Credit Transfer), instant euro transfers (SEPA Instant Credit Transfer) and direct debits (SEPA Direct Debit). All of these work according to a common rulebook and unified technical formats.
Practical anchors for SEPA
- SEPA is a concept only for euro payments – it does not apply to forint or other currencies.
- Within SEPA, euro transfers are handled in a more unified and often more favourable way than classic SWIFT transactions.
- If you send euro between European banks, there is a very high chance that it will be a SEPA transfer.
Which country groups belong to the SEPA area?
The core of SEPA is formed by the 27 EU member states, that is, all EU countries regardless of whether they have adopted the euro or not. Several EFTA countries (for example Norway, Iceland, Liechtenstein, Switzerland) and some smaller European states and territories, such as Monaco or San Marino, have also joined. In practice, almost all of Europe is part of SEPA.
It is important to note that SEPA membership is both a country- and a bank-level matter. A country can be part of SEPA while not every institution offers all SEPA services, though due to EU regulation the major banks are effectively expected to provide them for euro traffic.
How to check if a country is in SEPA
- Look at your own bank’s SEPA country list – most banks have a dedicated “SEPA countries” section.
- For a European destination you can usually assume as a starting point that it is likely part of SEPA.
- If you are unsure, ask your bank directly: “Is a euro transfer to country XY treated as a SEPA payment?”
How do IBAN, SEPA and SWIFT country groups overlap?
IBAN, SEPA and SWIFT are three different “layers” on the same world. IBAN defines the account number format, SEPA defines the euro payment zone in Europe, and SWIFT is the global messaging network. A country therefore does not simply “belong to one system”, but can be positioned in several categories at the same time.
The vast majority of European SEPA countries use IBAN and are also part of the SWIFT network. There are countries that use IBAN and are SWIFT members but are not in SEPA (for example some Middle Eastern or South American states), and there are countries that are SWIFT members but have not adopted IBAN, continuing instead with their own domestic formats. In practice, most international transfers involve at least the IBAN + SWIFT combination.
In short, what does each label mean?
- IBAN country: account numbers are given in IBAN format (country code + check digits + domestic part).
- SEPA country: part of the single euro payment area; euro transfers there are typically processed via SEPA.
- SWIFT network: the bank is connected to the global messaging system and uses it to communicate with other banks.
Main country groups in practice
For everyday banking it is useful to think of countries in four large groups. The first group consists of European states that use IBAN, are SEPA members and are part of the SWIFT network – most transfers from Hungary or Luxembourg fall into this category. The second group contains those countries that use IBAN and are SWIFT members but are not part of SEPA.
The third group covers countries that are SWIFT members but have not implemented IBAN, so you need to provide more traditional domestic account numbers and bank codes. The fourth group includes countries that also build their own alternative payment systems (for example China’s CIPS system), but in practice most of them still rely on SWIFT for at least part of their international communication.
Why is this classification useful?
- It helps you anticipate whether you will use IBAN, BIC, SEPA or a “plain” SWIFT transfer.
- It makes it easier to understand why transfers are cheaper and faster in some corridors than in others.
- If you send money to many countries, you can even build your own internal A/B/C/D list based on this logic.
Card schemes and other networks
In addition to account and transfer systems, there are card payment networks such as Visa, Mastercard or regional schemes (for example UnionPay or local brands in some countries). These run on separate infrastructures but are also based on country- and bank-level participation and are often linked in the background to SWIFT or other messaging networks.
In recent years, alternative regional or politically motivated systems have appeared as well (for example Russian, Chinese or BRICS initiatives) aimed at reducing dependence on SWIFT in certain corridors. However, these typically operate in a more limited environment, and for everyday retail transfers you are far more likely to encounter the classic IBAN–SEPA–SWIFT trio than these alternatives.
When do card and alternative systems matter?
- When you pay by card abroad, the card scheme’s rules (Visa, Mastercard, etc.) also affect the fees and FX rate.
- In large corporate transactions or special corridors (for example to China) more companies are using alternative systems.
- As an average retail customer, you will still mostly deal with the IBAN + SEPA + SWIFT combination.
How to find out which system applies to your transfer?
If you want to know which system will be used for a specific transfer, always look at the destination country, the currency and the beneficiary bank’s details. For a European destination and euro currency, the payment is likely to be processed as a SEPA transaction. For other currencies or non-European destinations you will usually be looking at a classic SWIFT transfer, with or without IBAN depending on whether the country uses the standard.
The most reliable approach is always to check your own bank’s information: they will specify which data are required for transfers to a given country and usually also indicate whether the transaction is treated as SEPA or SWIFT. If you regularly send money along the same route, it is worth reading the fine print carefully once – it can save you a lot of confusion and cost later on.
Quick pre-transfer checklist
- 1. Which country are you sending to, and in which currency? (Euro + Europe → very likely SEPA.)
- 2. Does the destination country use IBAN? If yes, always ask the beneficiary for the IBAN.
- 3. Does your bank treat the transaction as SEPA or SWIFT? If SWIFT, expect longer processing times and possible intermediary banks.