Glossary

The Complete Guide to IBAN Numbers

Domestic banks have routing and account numbers to identify accounts, which are necessary for processing. They’re like phone numbers in that they are unique identifiers. You might not realize that phone numbers have country codes as you don’t use them on domestic calls, but they are there. Bank accounts are no different. That’s why IBAN numbers are needed.

It’s hardly a complicated topic, but there are a few things you need to know about IBAN numbers if you plan on sending international wire transfers. This knowledge is common in the European Union but less so in the United States, where IBAN numbers are not used. Our hope is that this guide will answer any questions you have on the subject.

What is an IBAN number?

An IBAN number starts with a two-digit code to signify which country the account is opened in. Those digits are followed by a two number check identifier, then a string of alphanumeric characters that are the account number. These numbers tell banks and payment processors where to send or receive funds for international financial transactions.

IBAN numbers are not used in place of account numbers - they are simply identifiers for international wire transfers. IBAN numbers were originally used in the European Union, Hungary, Lichtenstein, Norway, and Sweden, and today the system has been adopted in seventy-five countries around the world, but not in the United States.

Each participating country uses a slightly different format. The string after the identifiers can be up to thirty-five characters, with some as short as nine or ten characters. If you’re in the United States and want to wire money overseas, you can request an IBAN number to send it to. If you’re receiving funds, the sender will need an ABA and SWIFT code to send money to you.

How International Bank Account Numbers Work

The alphanumeric characters that follow the country code and check identifier are called the basic bank account number (BBAN). This number is not the same as a regular bank account number, as it was created for a different purpose. Banking customers performing domestic transactions don’t need to use it – they can revert to their regular account number.

IBAN numbers are used for interbank transfers and wiring money from one bank to another. When sending money internationally, ask the recipient if their country uses IBAN and confirm their IBAN number before sending the wire. This will give you the ability to track the transaction and confirm receipt of your funds on the other end.

IBAN should not be confused with the SWIFT Network, which is a member-owned messaging system used by banks for international transactions. SWIFT requires the opening of a Nostro account at the receiving institution for funds to be transferred. IBAN is a numbering system to identify sending and receiving accounts for wire transfers.

Requirements for an International Bank Account Number

Consumers and businesses with a bank account in a country that utilizes the IBAN protocol already have an international bank account number. Look for it on your monthly statements or contact someone at your bank to find out what it is. Remember, if you’re in the United States, you don’t have an IBAN number. We’ll cover options for that scenario below.

If your bank is closed and you need the IBAN number right away, search online for calculators where you can get your IBAN by submitting your standard account number. There may also be a website from your bank where you can look up your IBAN number. You might even want to start with this step to avoid having to search a document or make phone calls.

For those sending money, contact the recipient and ask them for their IBAN number. If your recipient is inside the United States, you’ll need an ABA number and SWIFT code. Once either of these is obtained, double-check the numbers with the recipient to make sure they are correct. It’s important to note that funds will not get there if any of the numbers are wrong.

When is an IBAN Number required?

IBAN numbers are mandatory inside the European Economic Area (EU), but not in the UK or several other countries where IBAN is used for international wire transfers. Since IBAN numbers can also be used for domestic interbank transfers, you may want to investigate whether you’ve been assigned an IBAN number. If not, request one from the bank.

The United Kingdom (UK) adopted IBAN in April of 2021 and uses it for domestic and international transfers. With European borders constantly shifting, this may become a more widely adopted policy, so having an IBAN number handy would be beneficial to you if you live anywhere in or around the EU. There are also certain South American countries that use it.

As of right now, you don’t need an IBAN number in most countries to do domestic wire transfers, but that could change. The United States has the SWIFT Network and Western Union for individuals who want to do wire transfers outside of the standard banking system. Other countries have this too, but IBAN is more popular for business transactions.

Differences between IBAN and SWIFT/BIC codes

We’ve mentioned SWIFT several times already. The Society for Worldwide Interbank Telecommunications (SWIFT) was established in 1973 and has over 10,000 institutional members. It’s not a wire transfer system. SWIFT is a messaging system that banks use to send transactional instructions to transfer money. That’s not the same as IBAN transfers.

International transactions facilitated by the SWIFT Network utilize SWIFT Codes for identifying and tracking those transactions. These are eight-to-eleven-digit numbers, not to be confused with IBAN numbers that are assigned when SWIFT messages are implemented at the recipient bank. They are also known as Bank Identification Codes (BIC).

You can recognize a BIC code by its format. Unlike an IBAN number, which starts with a two-digit country code, a BIC Code begins with a four-character bank identifier, followed by a two-character country code, a two-character location code, and a three-character branch code, which is optional since some banks don’t use one.

Another difference between SWIFT and IBAN is that IBAN is used for actual wire transfers. With the SWIFT Network, the bank receiving the fund request already has the money deposited in a “Nostro” account that’s set up by the sending institution. Each of the banks in their network already have this in place for network partners.

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