What Is An IBAN Number?
An IBAN number is an international bank account number. These numbers are used in many countries to identify bank accounts and associated data. Below we discuss what an IBAN number is, how they work and what they do.
What Is An IBAN Number?
IBAN numbers are short codes that are used to identify bank accounts all around the world.
These numbers refer to accounts at specific financial institutions. IBAN numbers were initially used in the EU, but they have since been adopted in other parts of the world including the Middle East and the Caribbean.
IBAN numbers are formatted in such a way so as to reduce transcription errors through the use of checksums and standardized formatting. This ensures that payments are routed to the correct location.
The IBAN standard was brought into usage by various groups and standards bodies. It was initially adopted by the European Committee for Banking Standards (ECBS).
In 1997, the International Organization for Standardization formalized IBAN by publishing the ISO 13616 standard. Over time, various updates to the standard have increased or decreased IBAN’s flexibility depending on demand from those involved.
Today, national central banks and standards bodies can request their own IBAN format. The IBAN standard was updated in 2020 so that SWIFT became the registration authority for IBAN formats.
The widespread use of IBAN means you will likely encounter these numbers whether you live in Europe or abroad. Here’s what you should know.
What Does An IBAN Number Look Like?
Each IBAN number consists of a string of characters. A specific IBAN number might look like this example, which identifies a bank account in the U.K.:
GB33 BUKB 2020 1555 5555 55
An IBAN number may contain up to 34 different letters and numbers (an alphanumeric code). But, as seen in the example above, it may be shorter. Some national IBAN codes contain as few as 15 characters.
Regardless of the length, characters are usually separated into groups of four for readability.
Each position in an IBAN number represents specific information. The first and second positions indicate a country. In the example above, the letters “GB” indicate that the IBAN account is located at a bank in the U.K.
The third and fourth characters contain a “checksum” that can be processed to validate the rest of the code.
The fifth to eighth characters identify a particular bank or financial institution, either with numbers or letters. In the above example, the characters “BUKB” indicate that the bank account is at Barclay’s.
The remaining characters represent a Basic Bank Account Number (BBAN). This data contains an individual account number, a bank branch identifier, and other information. BBAN numbers add extra flexibility and information capacity to the IBAN standard.
How Does An IBAN Number Work?
IBAN numbers are generally processed by banks and financial institutions in order to route payments to another bank or financial institution.
The bank in question must decode an IBAN number to obtain routing information from it. In fact, anyone can decode an IBAN number by using the validator on IBAN.com.
The process of decoding an IBAN number also involves validating that number. Any IBAN checking tool will validate a code by converting it into an integer and performing a mathematical operation on it. This validation process can determine whether characters are substituted, transposed, and shifted, and it can detect most other errors as well.
The IBAN number is valid if this operation produces the expected mathematic result. However, most tools will simply indicate whether the code is valid or not in plain language.
Once the IBAN number is decoded and validated, the payment in question is processed and routed to its destination---that is, it is routed to the bank account of the recipient.
A transaction sent to an IBAN account can be carried out through any payment or settlement network.
How Do I Find My IBAN Number?
You can determine your IBAN number by looking at your bank statement. This information is usually found in the top-right hand corner of any bank statement.
Often, you can also find your IBAN number in your online banking account or in your bank’s mobile app. Sometimes you can even find it on your payment card or debit card.
You can also determine an IBAN number by entering certain information into an online form. IBAN.com contains an IBAN calculator. There, you can input a country code, sort code, and account number to determine a valid IBAN code based on that information.
If you are not sure where to find your IBAN number, contact your bank. A representative will either tell you your IBAN number or tell you how to find it.
Which Countries Are IBAN Numbers Used In?
According to IBAN.com, at least 79 countries make it mandatory or recommend using IBAN numbers for international transfers.
Major European countries with mandatory IBAN use for international transactions include France, Germany, Greece, Hungary, Ireland, Italy, Poland, Spain, the Netherlands, and Ukraine. Over 20 other European countries also have mandatory use of IBAN as well.
Nordic countries with mandatory use of IBAN for international transactions include Denmark, Finland, Greenland, Iceland, Norway, Sweden, and the Faroe Islands.
Middle Eastern countries with mandatory use of IBAN for international transactions include Iraq, Israel, Jordan, Kazakhstan, Kuwait, Lebanon, Palestine, Qatar, Saudi Arabia, Turkey and the United Arab Emirates.
Various countries in Africa, South America, Central America, and the Carribbean also have mandatory use of IBAN for international transfers.
In some countries, IBAN is merely recommended for international transactions. Those countries include the U.K., Brazil, Egypt, El Salvador, Libya, and Pakistan, among others.
Some of the above countries consider IBAN mandatory for international transactions, but not for domestic transactions. Refer to IBAN.com’s full list of countries for more details.
Banks in other countries may also recognize and process IBAN numbers. For example, although banks in the U.S. and North America do not use IBAN numbers for their own accounts, they may decode IBAN numbers in order to route a payment.
What’s The Difference Between IBAN, SWIFT & BIC Numbers?
IBAN numbers are different from other types of identifier codes and numbers---particularly SWIFT numbers, which are also known as BICs (Bank Identifier Codes).
Difference 1: Bank vs. Account Routing
IBAN numbers identify a bank plus an account number. This means that IBAN numbers alone can be used to direct funds to a particular bank account.
SWIFT numbers, on the other hand, only identify a bank (or a bank branch) and do not identify specific bank accounts. It is only with additional routing steps and information that SWIFT can be used to deposit funds into a specific account.
Banks sometimes request more than one type of number to increase the likelihood that a transaction reaches its intended destination. As such, IBAN and SWIFT codes are often used together.
Difference 2: Global Coverage
IBAN numbers are primarily used in Europe and other nearby countries. The 79 countries that use IBAN numbers account for less than half of the world’s nations.
SWIFT numbers, on the other hand, are used much more widely around the world. At least 200 countries and regions use SWIFT numbers as of 2022.
However, both systems are globally recognized. Though SWIFT codes have wider adoption, countries that do not use IBAN numbers may still refer to IBAN numbers for routing information.
Difference 3: Format
SWIFT codes and IBAN numbers have specific formats.
SWIFT codes adhere to the ISO 9362 standard, also called the Business Identifier Code (BIC). The BIC code includes a bank’s business party prefix, country code, business party suffix, and, optionally, a branch code. These codes are 8 to 11 characters long.
IBAN numbers adhere to the ISO 13616 standard. They may be considerably longer than SWIFT codes, as they can contain up to 34 characters. IBAN numbers also include a BBAN number, which is very flexible in terms of the information it includes.
Ultimately, both IBAN numbers and SWIFT codes contain very different information despite the fact that they are both used for related purposes.
What’s The Difference Between An IBAN Number & An Account Number?
IBAN numbers and bank account numbers are both used to route payments to a bank account.
Every IBAN number contains an individual bank account number. More specifically, each IBAN number ends with a Basic Bank Account Number (BBAN).
This means IBAN numbers contain sufficient information to route payments to an international account. Meanwhile, bank account numbers alone can be used to route payments domestically.
If you do not reside in a country that uses IBAN codes, your bank may use another unrelated format for account numbers.
When Is An IBAN Number Needed?
You might need to use an IBAN number if you are making a transaction to a foreign country, either through your bank or through an online payment service.
You will typically need to provide a recipient’s IBAN number when you send a transaction. Your bank may also provide you with another way to send the transaction, in which case you might not need to provide an IBAN number at all.
If you are receiving funds, you will need to give your IBAN number to the individual who is paying you. The sender will in turn need to provide that number when they send the transaction.
You may not need to use an IBAN number if you are sending a domestic transaction, if you are sending a transaction to another client at your bank, or if you are sending a transaction to a country that does not use the IBAN standard.
Contact a bank representative if you are not sure whether you need to use an IBAN number.
Is It Safe To Give Out Your IBAN Number?
It’s perfectly safe to give out your IBAN number, as IBAN numbers are designed to route transactions to between individual bank accounts.
It’s also safe to ask to ask another person or company for their IBAN number. If you are sending money abroad, you will probably need to know the IBAN number of the recipient before you make your transaction.
You should be cautious with bank statements and other documents containing your IBAN number and other personal and banking data. Criminals can commit fraud or identity theft if they also gain access to all of your information in one place.
However, there is no reason to worry about giving out your IBAN number on its own.
Payset’s IBAN Solution
At Payset, we provide dedicated IBAN accounts with a wide variety of features. Here’s what you’ll gain access to by signing up for one of our IBAN accounts.
Benefit 1: Multi-Currency Support
With a Payset IBAN account, you can take advantage of our multi-currency features. You can convert between 38 forex currency pairs and hold up to 34 currencies at one time. Plus, you can send funds all around the world with our rapid transfer speeds and low fees.
Benefit 2: Prepaid Cards
Payset offers prepaid cards connected to your IBAN account so that you can spend your balance internationally. We offer virtual and physical cards, plus corporate cards that business executives and managers can share between their staff and employees.
Benefit 3: IBAN Alternatives
Though we provide IBAN accounts at Payset, we also support transfers made over other payment networks including SWIFT, SEPA, and CHAPS. Plus, transactions to and from other Payset users are free.
Refer to this page to see our complete list of supported payment options and associated rates.
Follow visit us to find out more.
Frequently asked questions
What is a multi-currency account/virtual IBAN?
A Payset multi-currency account allows you to receive money in 34 different currencies and send money in up to 38 currencies, all within the same account.
You can deposit and withdraw funds, convert currencies at competitive exchange rates, and hold your chosen currencies to capitalize on market movements.
A Payset multi-currency account allows startups and business owners to receive payments from clients virtually anywhere in the world and pay suppliers, staff, and contractors quickly and affordably in their chosen currency.
- Funds can be deposited and withdrawn from the account for a small fee.
- Account holders can send and receive money with other Payset users for free.
- Depending on your region, you can use various payment networks from your Payset account, including SWIFT, SEPA, ACH, Fedwire, Faster Payments, BACS, and CHAPS.
- Once you register an account, you will be provided with a Virtual IBAN (International Bank Account Number), which makes all of these transfers easy.
- We provide you with local payments and collections. For example, transactions in USD, EUR, CAD, and GBP are processed through the local payment networks, which is far cheaper and takes minutes as opposed to days
Are there limits on the amount of money I can send and receive?
No, there are no transaction limits on Payset multi-currency accounts.
However, higher-volume transactions may require additional anti-fraud verification. If you plan to make a large transaction, contact us in advance to avoid verification delays.
How is Payset regulated?
Payset is regulated as an authorized Electronic Money Institution by the UK Financial Conduct Authority. Our activities are also regulated by the Payment Services Regulation 2017 and the Electronic Money Regulation 2011 (SI 2011/99).
How do I add money to my account?
How do I send money from my account?
Once you have opened your verified IBAN account and added money to a balance, transferring funds is simple.
Simply log in into your account and add a beneficiary, then simply “make a transfer” in your preferred currency to that beneficiary.
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