What is a bank transfer reference number?

Each transaction has its own unique reference number, produced when any transaction with a payment card or directly from an account is made.

In this article, readers will learn about bank transfer numbers: what they mean, why they are important, and what are the other kinds of reference numbers.

Also called a transaction ID, a bank transfer number is a randomized collection of letters and numbers, created individually for each financial transaction or payment, national or international. They usually total between 12 and 18 characters, although some can reach 40 characters. The unique numbers are designed to help institutions and users identify and investigate a transaction, should there be some reason to do so for accounting purposes or otherwise. The transfer number can be found on a receipt or invoice, or in monthly statements of any card holder, and are always retrievable online.

There is an important distinction to make between bank transfer numbers and purchase order numbers. Where the former are generated is automatically assigned by the body responsible for handling the transaction (card issuer, financial institution, etc.), a purchase order number is created by the business or seller for internal use. Where the point of a transfer number is to be monitored externally, sellers use purchase order numbers to keep track of their own stock and sales internally. They usually contain details which corresponding to a certain system devised by the merchant.

Certain situations can arise during or after a transaction is made, in which the reference number becomes useful. Most of the time, payee and merchant won’t need to pay attention to the number, because the transaction has gone through successfully and there’s no need to monitor it.

However, one of the following things may happen, causing either party to need the reference number:

In these cases, having a reference number to refer to makes the whole process of investigation and monitoring much quicker. In a dispute, the reference number makes clear who has sent the payment and how it can be investigated by the financial institution with ease. It has become especially fast with online banking. With the reference number, the merchant, customer, card and financial institutions can all be tracked down immediately.

• The payee claims they haven’t received the funds for a product or service they sold
• Dangerous or illegal goods have been paid for
• Tax audits
• A mysterious transaction appears in the card-holder’s bank statement
• A reimbursement is needed, for example from an airline after a canceled flight
• Collection of target demographics and purchasing behaviors from customers
• A business wishes to investigate a purchase from a customer
• A mysterious deposit has appeared in the card or account holder’s statement

Reference numbers are often needed for a variety of other instances in which something must be tracked or monitored, or easily referred to in case of a dispute.

Other reference numbers include:

• Package reference numbers: used to track packages from storage point to recipient, package reference numbers are important when a package goes missing or is sent to the wrong address.
• Purchase order numbers: as mentioned above, purchase order numbers are used internally by the merchants for keeping track of goods, and will usually correspond to a system designed by the merchant, instead of randomized letters and numbers.
• Blockchain transaction data: often publicly available, transactions made with cryptocurrency include the same data available with normal currency transactions, and are often referred to as TXIDs.

Bank transfer reference numbers are an important part of financial management. With the right financial service for your business, you’ll be able to manage your finances with ease from one account.