New
Join experts from Nacha and Modern Treasury for a webinar on fraud, risk, and the ACH network.
Learn more.
Modern Treasury Logo
Product
Products
PaymentsLedgersVirtual Accounts
Platform
Why Choose UsHow it WorksIntegrationsSecurityFor Finance TeamsFor Developers
CustomersPricing
Developers
Documentation
Quick StartAPI ReferenceGuidesChangelog
Support
Get help
Service status
Company
Company
AboutContactJobsJournal
Support
Learn
Get help
Service status
Journal
Log in
Sign up
Arrow
Hamburger MenuHamburger Menu
Learn
Guides
Quickstarts
API References
Support
Learn
Core Banking Systems
Sort Codes
ACH
What is ACH?
ACH API
What is an ACH Prenote?
ACH Reversals
ACH Payment Returns
ACH Return Codes
SEC Codes
What is Same-Day ACH?
RTP
What is RTP?
Wire Transfers
What is a Wire Transfer?
SWIFT
What are SWIFT Payments?
SWIFT Codes
FedNow
What is FedNow?
Bank Accounts
What is an FBO account?
What are Virtual Accounts?
Payment Industry Bodies
TCH
NACHA
CHIPS
Fedwire
File Standards
BAI2
NACHA files
Core Banking Systems
Sort Codes
Back Office
Bank ReconciliationPayment OperationsContinuous AccountingWhat is Money Transmission?What are Lockboxes?What is a Deposit Account Control Agreement?What is Cash Management?What is Treasury Management?What are Incoming Payment Details?

Sort Codes

Definition
Resources

A sort code is a type of routing number used in the United Kingdom and in Ireland. It’s composed of six digits divided into three pairs. It routes money transfers by identifying the banks involved, as well as the location of the specific branches where the accounts are held.

What are the origins of sort codes?

Sort codes came about in the late twentieth century when check usage was at an all-time high. Consumers wrote checks throughout the day to make their purchases and gave them to merchants. Merchants would then be responsible for cashing the checks in for their business. They did this by bringing checks to the bank so they could be properly processed—but they had to figure out ways to authenticate where the checks came from. 

Sort codes identified the specific bank branch that the account holder was writing their checks from, allowing everyone involved in the wiring process to be aware of where the money came from, and where it was going. 

How do sort codes work? 

Each pair of numbers in a sort code points to a different piece of information needed for a  successful money transfer. The first two digits refer to the banking group or bank that the check is coming from. The remaining digits help narrow it down to the very branch. 

For example, let’s say that there’s a sort code that goes by 11-22-33. Numbers 11 would represent Berry Bank, while 22 and 33 would reveal the city and branch of Berry Bank  which can be found in Camdentown, London.

It’s important to note that while sort codes are often used alongside account numbers, they each have a different function. Simply put, account numbers identify an individual’s savings or checking account. Sort codes make sure that with whatever transaction that occurs, a bank will correctly move money over from one account to another. 

How are sort codes different from SWIFT codes?

When it comes to processing secure bank transactions, both sort codes and SWIFT codes function similarly. Like sort codes, SWIFT codes have their own routing number combinations and are used to determine what banks and branches are involved in the wiring process. 

But while sort codes exist for banks within the UK, SWIFT codes are not limited by location. They monitor money on a much bigger scale, allowing for international transfers. SWIFT codes consist of 8-11 unique characters that serve to identify not only the banks and branches, but also the countries where the transactions are taking place.

Learn more about seamless and secure money movement with Modern Treasury.

Modern Treasury is a payment operations platform built for the entire cycle of money movement. Our APIs and software applications directly integrate with your bank accounts, allowing you to process payments using ACH, RTP, Wires, and multiple other payment methods 2x faster than your existing solution. Modern Treasury automates payment reconciliation and accounting, giving you back time and control over your payment operations.

Sign up
Talk to a payments advisor
Sean Bolton
Written by:
Sean Bolton
Last updated:
Sep 22, 2021
Last updated:
Sep 22, 2021

More 

Core Banking Systems

 resources

Learn
Journal
Definition
Resources
Products
PaymentsLedgersVirtual Accounts
Platform
Why Choose UsHow it worksCustomersIntegrationsSecurityFor Finance teamsFor DevelopersPricing
Developers
Quick StartAPI ReferenceGuidesChangelogStatus
Company
AboutJoin UsJournalContactLearnGet help
Integrations
JP Morgan Chase
Silicon Valley Bank
Wells Fargo
QuickBooks
NetSuite
Guides
What is Automatic Reconciliation?
How to Build an Insurance Company
Which Bank Partner is Best for You?
Made with  🌯  in San Francisco
Made with  🥐  in Menlo Park
Made with  🌮  in Los Angeles
Made with  ☕️  in Seattle
Made with  🍺  in Portland
Made with  🧁  in Arcadia
Made with  ❄️  in Minneapolis
Made with  🥯  in New York City
Made with  🍷  in Amsterdam
Made with  🍕  in Chicago
Made with  🍩  in Humboldt
Made with  🎸  in New Jersey
© Modern Treasury Corp
PrivacyTerms of Service