Sort Codes are numbers assigned to bank branches and they are used mostly for the internal purposes of the bank. These codes will have 6 digits which are separated in sets of two's with hyphens. They are most widely used in the banking systems of the United Kingdom and Ireland.
Sort Codes are used by the banks of the UK and Ireland for routing money transfers between banks in their own countries using their clearance organizations. The system has a slightly different name in Ireland, where it is called the National Sort Code (NSC). Here it is the Irish Payment Services Organization (IPSO) that regulates the use of this code. The formats and uses of Sort Codes are the same in both the countries, but they are regulated under different organizations.
As already mentioned, there are 6 digits in the Sort Code, separated into 3 pairs of numbers. It helps the banking industry to identify the bank and branch when carrying out transactions. The meaning of the codes can vary slightly. Sometimes, the first digit alone is used for identifying the bank. Sometimes it is the first two digits which are used for the same purpose.
There are many similarities between Sort Codes and BIC Codes. But the former system of banking codes are not fully encoded into BIC. They are however encoded in IBANs.
The Sort Code system was first launched during the 1960s. It was required by the banking industry at the time when it began automating its processes. Before the code was introduced, the banks were using a system of 'national code'. These earlier codes were used to process cheques manually. They used to have 3 to 5 digits in them.
The Sort Codes are used in the UK and Ireland only for the purpose of processing domestic money transfers. When it comes to transferring money across the borders, this system cannot be relied upon. A major change in the Euro zone banking system came in 2014 when the nations using EURO started using the IBAN system. So for transactions beyond the borders of the UK and Ireland (but only within the EU), the banks rely on the IBAN. It is used by the EURO for identification of bank account numbers.
In fact, the Euro zone banking system requires nothing else except the IBAN for its banking transactions. It doesn't even rely so much on SWIFT, BLZ and other systems. However, SWIFT codes are used for carrying out transactions beyond the borders of EU. Similarly, Sort Codes are included in the 9-14 character IBANs used in the UK and Ireland.
In many other countries, there is no system that can be compared to Sort Codes. They will usually have the bank code and branch code separated. But some other countries have coding systems with some similarity, even though the formats are different.
Swift Code or the Society for Worldwide Interbank Financial Telecommunication code is a globally accepted identification system for banks. These codes are mostly used for carrying out international wire transfers and can have 8/11 alphanumeric characters. It was first authorized to be created by the International Organization of Standardization (IOS).Read More
The IFSC Code or the Indian Financial System Code is an 11 character code that is used by the Reserve Bank of India for identifying all the bank branches which are part of the NEFT system in India. It is used for the electronic payment system applications like the NEFT (National Electronic Fund Transfer, RTGS and CFMS.Read More
MICR Code or Magnetic Ink Character Recognition is a character recognition system used mostly by the banking industry for facilitating the processing of cheques. These characters are printed in special unique typefaces with magnetic ink. Iron oxide is the commonly used material and it requires a specially designed machine for reading these characters. These characters are mostly printed on the bottom of the cheque leaf. The code is required by the Reserve Bank of India (RBI) for identifying the bank and branch and clearing the cheque.Read More
When it comes to making an international online payment, you will be required to provide a BIC code. It can often leave one confused as to what the Bic Codes refer to. These are the same as SWIFT codes. It is an international banking code for transfer of financial messages. The code is also used for identifying banks all across the world. BIC stands for Bank Identifier Code and SWIFT refers to the Society for Worldwide Interbank Financial Telecommunication.Read More
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Sort Codes are numbers assigned to bank branches and they are used mostly for the internal purposes of the bank. These codes will have 6 digits which are separated in sets of two's with hyphens. They are most widely used in the banking systems of the United Kingdom and Ireland.Read More
Routing Numbers, also known as ABA Numbers or Routing Transfer Numbers are 9 digit numbers used by the banking system in the United States for identifying banks and financial institutions. This number system is used by the US banks for carrying out Automatic Clearing House and wire transfers. This includes various forms of transactions like direct deposits, electronic funds transfers, e-checks, tax payments, and direct payment against bills and much more.Read More