A reference when sending money is a message to the person being paid that allows them to easily identify where the money has come from and the reason for the transfer being sent. It is a unique identifier assigned to any financial transaction, including those made using a credit or debit card. The purpose of a payment reference is to help the payee easily identify the payer or purpose of the transaction.

When transferring money to a friend or family member, the bank transfer reference may be something as simple as ‘Holiday money’ or ‘bill for restaurant’. However, if you’re sending money to a company, then you’ll need to think a bit more carefully about the reference you use for a bank transfer. This is important for both the customer and the business, as accurate payment references allow a company to successfully record money flowing in and out of their business and link the payment to the corresponding customer account.

The payment reference is usually in the form of numbers, which can be found in invoice letters, bills, or through your online account portal. Some companies may ask you to add your customer reference number in the payment reference, your full name, or any other number used to identify you.

The reference field is a short description that can be used for things like providing a receipt or invoice number for your records. It is visible for the sender only. On the other hand, the description field is used to explain what the payment is for and is visible for both the sender and the recipient.

In summary, a reference when sending money is a message that helps the payee identify the payer or purpose of the transaction. It is important to use accurate payment references when sending money to a company to allow them to successfully record money flowing in and out of their business and link the payment to the corresponding customer account.