The International Bank Account Number also referred to as IBAN, is a system designed for identifying bank accounts of several account holders all around the national borders. It may also be referred to as the numbering system that is globally accepted for the identification of international bank accounts.
It is a universal number that contains a maximum of 22 alphanumeric characters within the European Union and 34 alphanumeric characters outside the European Union which makes it easy for tracking the transfer of funds to and from anywhere in the world. It is a crucial aspect in the exchange of currency either sending or receiving globally because it is linked directly to your bank account.
The length of the IBAN comprises of a maximum 34 alphanumeric characters but it can be as short as 15 alphanumeric characters [like the case of Norway] and up to 31 alphanumeric characters [like the case of Malta]. Every country determines what its IBAN will look like but all International Bank Account Numbers are restricted to characters between 0-9 and A-Z.
Note that the international bank account number is not a substitute for your bank account but it only makes it easy for you to recognize international transfers.
Background Of International Bank Account Number
Before IBAN came into operation when there were different ineffective approaches previously applied by countries for their international transactions which resulted in a whole lot of confusion, basic routing information was usually missing when payments are made because of the differences in routing codes, account numbers, bank codes, and branches were misinterpreted and sometimes omitted when payments are being processed.
In 1997, the European Committee for Banking Standards (ECBS) started operating the IBAN system for the easy process of cross-border money transactions with the European Union, and then it began to gain a populace all across Europe in the 2000s. Due to its efficiency, it has since expanded to all parts of the world so much that many countries have adopted the system.
Structure Of International Bank Account Number
The details below form the International Bank Account Number.
Two characters representing the code that belongs to a particular country.
Two characters are used to check for errors on account numbers.
Four characters bank code
Six characters sort code of the bank branch
Eight characters of the account number.
How To Generate/ Verify Your IBAN
Are you having a challenge tracking your IBAN or do you need to verify your IBAN, there are online IBAN calculators that have been set up to ease you of that challenge. All you need to do is provide your sort code, home country, and your bank account and in a split of seconds, the calculator will come up with your IBAN.
Importance Of IBAN
Identification Of Bank Accounts
As a result of the various available bank codes, account numbers, routing codes, and bank branches codes, IBAN was formed to make it easy to access and identify several bank accounts across every country.
Prevention Of Errors
Both international and domestic transaction errors are prevented because the IBAN includes the recipients’ bank account number, the local bank’s code, and the code of the country where the bank is in operation. This coded security, therefore, helps to minimize the occurrence of errors since the necessary information is in place and well programmed.
Reduces Costs
Since the operations of IBAN, the cost of transferring money to other countries has been reduced including other financial transactions between countries.
Speed Up Transfer
The rate at which recipients have their money credited into their account has improved unlike when the traditional methods were in operation where it may take a couple of days before the money is received of which some transactions may not even be completed where errors are committed.
For Setting Up Wire Transfer
The transfer of funds electronically to other countries requires that you include the recipients’ IBAN along with the BIC or SWIFT of the recipient’s financial institution.
How To Carry Out IBAN Payments
For you to make payments using IBAN, the following details will be required;
Name and address of the beneficiary
The International Bank Account Number of the beneficiary.
The address and name of the bank to receive the funds.
How To Find My Sorting Code
Here are the steps to getting your sort code.
At the right-hand side of your card, you will see the 8-digit number( which is your account number).
Check out the 3 pairs of numbers that are being separated by dashes just to the left before your account number. There you can see your sorting code.
Countries That Use IBAN
Over 65 countries make use of IBAN globally. Most of the European countries have adopted the IBAN standard except for Canada and the USA, although their payments process is in line with the IBAN’s requirements. Other countries like Cyprus. Serbia, Germany, the British Virgin Islands, and many more have implemented IBAN for their international transactions.
List of some of these countries and their codes includes;
Country: Bulgaria
IBAN length: 22
Country code: BG
Country: Burundi
IBAN length: 16
Country code: BI
Country: Sweden
IBAN length: 24
Country code: SE
Country: Spain
IBAN length: 24
Country code: ES
Country: Vatican City
IBAN length: 22
Country code: VA
Country: United Arab Emirates
IBAN length: 23
Country code: AE
Country: Turkey
IBAN length: 26
Country code: TR
Country: Serbia
IBAN length: 22
Country code: RS
Country: Mali
IBAN length: 28
Country code: ML
Country: Malta
IBAN length: 31
Country code: MT
Country: Lebanon
IBAN length: 28
Country code: LB
Country: Jordan
IBAN length: 30
Country code: JO
Country: Jersey
IBAN length: 22
Country code: JE
Country: Israel
IBAN length: 23
Country code: IL
Country: Ivory Coast
IBAN length: 28
Country code: CI
Country: Greece
IBAN length: 27
Country code: GR
Country: Greenland
IBAN length: 18
Country code: GL
Country: France
IBAN length: 27
Country code: FR
Country: Egypt
IBAN length: 27
Country code: EG
Country: Congo
IBAN length: 27
Country code: CG
Country: Cameroon
IBAN length: 27
Country code: CM
Country: Belgium
IBAN length: 16
Country code: BE
Country: Benin
IBAN length: 28
Country code: BJ
Country: Angola
IBAN length: 25
Country code: AO
Country: Albania
IBAN length: 28
Country code: AL
IBAN versus SWIFT Codes
For every international transaction, two major means of identifying bank accounts are via the SWIFT ( Society for Worldwide interbank financial telecommunication) code and IBAN(International Bank Account Number) code. These two codes are essential for the smooth process of international transactions because the SWIFT code helps to identify the receiving bank while the IBAN is used to identify the receiving account.
