Three acronyms that Indian businesses encounter constantly when setting up international payment infrastructure: IBAN, SWIFT, and ACH. Each describes a different component of the international payment system. Understanding what each is prevents expensive mistakes (routing payments through the wrong system, providing wrong bank details to clients).
IBAN (International Bank Account Number)
What it is: A standardized international bank account identifier used across Europe (and some other countries). IBAN uniquely identifies a specific bank account at a specific bank.
Structure: Country code (2 letters) + check digits (2) + bank-specific account number. Total length varies by country (UK IBANs: 22 characters; German IBANs: 22; French: 27).
Example UK IBAN: GB29 NWBK 6016 1331 9268 19
When Indian businesses use it:
- Receiving EUR from European clients via SEPA transfer (you provide EUR VBA IBAN)
- Receiving GBP from UK clients via Faster Payments (you provide GBP VBA with sort code + account, which maps to a UK IBAN)
- Paying European suppliers Playto Pay VBA IBANs: When Playto Pay provides your EUR VBA or GBP VBA, the account comes with proper IBAN and BIC/SWIFT details for the partner bank.
SWIFT (Society for Worldwide Interbank Financial Telecommunication)
What it is: Two things — (1) a messaging network used by banks globally to communicate payment instructions, and (2) the SWIFT/BIC code that identifies specific banks on that network.
SWIFT/BIC code structure: 8-11 characters identifying the bank (4 letters), country (2 letters), location (2 chars), optional branch (3 chars). Example: ICICINBBXXX = ICICI Bank India.
SWIFT wire: An international bank transfer sent through the SWIFT messaging network. Any bank in 200+ countries can send a SWIFT wire to any other SWIFT-connected bank, in any currency.
When Indian businesses use SWIFT:
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Receiving large one-off international wires from clients who can't use VBA or SEPA
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Receiving from non-SEPA countries (US via SWIFT, Canada, Japan, etc.)
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Traditional bank-to-bank international transfer SWIFT fees for Indian businesses:
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Indian bank charges ₹1,000-₹5,000 per inward international wire
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Sending bank charges their own fee
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Correspondent bank fees may be deducted from the wire mid-route
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Forex at bank's spread (2-3% above mid-market) VBA vs SWIFT: A VBA receives wire transfers but gives clients domestic-looking account details, bypassing the SWIFT fee structure for the client. For you, VBA platform fee (Playto Pay 1% or Skydo flat) is almost always cheaper than traditional SWIFT to Indian bank.
ACH (Automated Clearing House)
What it is: The US domestic payment network. ACH handles transfers between US bank accounts. Not an international system — ACH only works within the US banking system.
Types:
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ACH Credit: A push transaction (business pushes money to your account)
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ACH Debit: A pull transaction (recurring subscription auto-charge from your customer's US bank account)
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Same-Day ACH: Settles same business day
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Standard ACH: 1-2 business days When Indian businesses encounter ACH:
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US clients paying from US bank accounts to your USD VBA (the US-side leg of a VBA transfer is often ACH)
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Playto Pay USD VBA: US clients can send ACH to your US-based VBA account number + routing number
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SaaS subscription auto-billing to US customer bank accounts (ACH debit) ACH vs Wire: Wire is instant, any amount. ACH is 1-2 days, has dollar limits per day, but is free or near-free for US senders.
SEPA (Single Euro Payments Area)
Bonuses: SEPA is often confused with SWIFT and IBAN.
What it is: A European domestic payment network for EUR transfers across 36 countries. SEPA transfers use IBANs. Very cheap (often free) for the sender, 0-1 day settlement.
When Indian businesses use it:
- European clients sending EUR to your EUR VBA IBAN via SEPA. European client experience: same as any domestic European transfer.
UK Faster Payments
What it is: UK's real-time domestic payment system. UK clients send GBP to your GBP VBA (sort code + account number) via Faster Payments. Instant settlement. Free or near-free for UK senders.
How VBAs Use These Systems
A VBA (Virtual Business Account) via Playto Pay or Skydo provides you with account details that plug into these domestic payment networks:
| Your VBA Currency | Client Payment Network | Client Experience |
|---|---|---|
| USD VBA | US: ACH or Fedwire; non-US: SWIFT | US clients: domestic ACH; others: international wire |
| EUR VBA | SEPA | EU clients: domestic SEPA transfer |
| GBP VBA | UK Faster Payments | UK clients: domestic Faster Payment |
| AED VBA | UAE local transfer | UAE clients: domestic UAE bank transfer |
In every case, your client sends what looks like a domestic transfer. You receive INR in your Indian bank at 1% flat (Playto Pay) or flat-fee (Skydo), with FIRA auto-generated.
Quick Reference for Indian Businesses
| Term | What to Do |
|---|---|
| Client wants to send SWIFT wire | Give them your Indian bank SWIFT details OR your VBA SWIFT (Playto Pay/Skydo) |
| Client wants IBAN | Give them your EUR VBA IBAN from Playto Pay |
| US client wants to send ACH | Give them your USD VBA routing number + account from Playto Pay or Skydo |
| UK client wants to transfer GBP | Give them your GBP VBA sort code + account from Playto Pay |
| EU client wants to send EUR | Give them your EUR VBA IBAN from Playto Pay (they'll send via SEPA) |
FAQ
What is the difference between IBAN and SWIFT? IBAN identifies a bank account. SWIFT is a messaging network (and the bank identifier code on that network). IBAN is used within SEPA; SWIFT is used globally. An IBAN-based SEPA transfer doesn't use SWIFT — it stays within the SEPA network.
Do Indian businesses need an IBAN? Indian banks don't use IBAN. But your EUR VBA and GBP VBA from Playto Pay come with IBAN details that European and UK clients use to send payments.
What is ACH and can Indian businesses receive ACH? ACH is the US domestic payment network. Via a USD VBA from Playto Pay or Skydo, US clients can send ACH to your US-based VBA, which then converts to INR and settles to your Indian bank.
What's the difference between SEPA and SWIFT? SEPA is Europe's domestic EUR payment network — cheap, fast, within 36 European countries. SWIFT is global. For EUR payments from EU clients, SEPA is better than SWIFT (cheaper for the client, equally efficient for you).
Is Faster Payments the UK version of SEPA? Conceptually similar — both are domestic payment networks. UK Faster Payments is GBP-only within the UK. SEPA is EUR across 36 European countries. Post-Brexit, UK is not in SEPA.