Addressing via Account Details

Where proxies are not available, a payment can be addressed using either (a) International Bank Account Numbers (IBAN) or (b) local account numbers alongside a financial institution ID.

Addressing via IBAN

Nexus supports addressing by International Bank Account Numbers (IBAN) whenever the Destination Country accepts IBAN. IBAN is accepted in around 78 countries, but is not accepted in many major markets (such as Canada, Hong Kong, India, Singapore, and the USA).

IBANs are not accepted in India, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Explainer: What is an International Bank Account Number?

An IBAN is a single string of text that includes all the information needed to identify a target account. It is defined by the ISO 13616 standard.

• An IBAN can be up to 34 characters long

• The first two letters define the country (eg US, GB, FR, DE)

• The second two letters are check digits (a protection against typos)

• The remaining digits define a “Basic Bank Account Number” which includes the Financial Institution Identification and an Account Identification.

An IBAN is a fixed length within a specific country, but can vary in length from country to country.

Addressing via Account Identification and Financial Institution Identification

Nexus also allows payments to be addressed using an Account Identification (commonly called “account numbers”) and a Financial Institution Identification (such as a Business Identifier Code, BIC or a non-BIC Clearing System Member Id). Nexus is aware of the format of the Account Identification and Financial Institution Identification.

Identifying the Account

Account Identifications can vary significantly in format and length from country to country. In some countries, all Account Identifications have a fixed length, but in other countries the Account Identification can vary in length depending on the financial institution.

Identifying the Financial Institution

The ISO 20022 standard permits three types of Financial Institution Identification:

• Business Identifier Code (BIC) (most commonly used)

• Legal Entity Identifier (LEI)

• A domestic Clearing System Member Identification.

In some countries, financial institutions may have both a BIC and a Clearing System Member Identification, although only one or the other needs to be used in a specific payment instruction.

LEI can be used in addition to BIC or Clearing System Member Identification to provide further information about the financial institution. This can be useful to support compliance checks and sanctions screening.

Explainer: Business Identifier Codes (BIC)

BICs are defined by the ISO 9362 standard and are issued by SWIFT. They are often referred to as a SWIFT Code, but are not restricted to SWIFT members or restricted to use on the SWIFT network.

A BIC defines a financial institution but not a specific account. Therefore they must always be used in conjunction with an Account Identification.

• A BIC can be either 8 or 11 digits (eg DBSSSGSG or DBSSSGSGXXX)

• The 8-digit BIC (BIC-8) defines the country and financial institution

  • The first 4 characters define the “business party”

  • The next 2 characters are the alpha-2 country code (eg US, GB, SG, HK, ID, MY, PH, TH)

  • The final 2 characters are the “business party suffix”. In some cases, one of these digits identifies whether or not the financial institution is a member of the Swift network.

• The BIC-11 includes the BIC-8 plus an additional 3 digits that define a specific branch of the financial institution

Explainer: Clearing System Member Identification

Each PSP is a member of an instant payment system, or “clearing system” in ISO 20022 terminology. The IPS will assign each member a unique ID. Clearing System Member Identifications are commonly known by local names, such as “routing number”, “sort code”, “bank-state-branch code” etc. Some examples of non-BIC Clearing System Member IDs are given below:

• Australia: Bank-State-Branch (BSB) code, 6 digits (numeric)

• India: Indian Financial System Code (IFSC), 11 characters (alphanumeric)

• Singapore: BIC, 8 characters (alphanumeric)

• United Kingdom: Sort code, 6 digits (numeric)

• USA: Routing number, 9 digits (numeric)

Warning: Locally-generated, non-registered BICs

Some IPSs issue non-bank PSPs with an identifier that follows the formatting of BIC but is not registered with Swift (the registration authority). This means that the locally-generated “pseudoBICs” are not included in the Swift database that some PSPs use to validate BICs before sending payments. Consequently, some PSPs may not be able to make payments to PSPs with non-registered pseudoBICs.

It is better to register these locally generated codes with Swift, so that they always validate correctly.