How to Get IBAN Number

IBAN is International Bank Account Number. That is an international bank account number, created according to the ISO standard 13616. Officially this standard is supported by the Society for Worldwide Interbank Financial Telecommunications well-known as SWIFT.

The immense amount of cross-border financial operations made it necessary to unify and standardize banking procedures. For that purpose, a special system of labeling details was developed.

While initially this code was meant to simplify and speed up the process of payment settlement only within the borders of the European Union (EU) and EEA countries, recently it has also begun to be implemented outside of those mentioned above-for example, Kazakhstan, Belarus, Ukraine, Moldova, Georgia, Azerbaijan, United Arab Emirates, etc.

The IBAN will give you immediate identification of the country in which it is issued, the financial institution/bank, and the payees or beneficiaries of any currency.

Most states determine the length independently, but the total number of characters shouldn’t be more than 34 capital Latin letters and digits.

First: the letter marker of the state in which is located the financial and credit institution of the beneficiary – one or two characters;

Next pair of symbols: unique control number, calculated from the rest of the IBAN symbols;

Then the first four characters of BIC: identification code.

The rest of the IBAN may contain additional data in varying sequence, which varies from state to state:

• Bank branch prefix,
• Customer account number,
• His type,
• Balancing account number,
• Currency,
• Check characters.

Thanks to this information, money transfer operator may quickly and correctly find a recipient.

For better readability, it is usually written with spaces after each group of four characters. The IBAN of France for example, contains 27 characters and has the form:

FRkkk bbbb bggg ggcc cccc cccc cxx

where

• FR is the ISO code of the state,
• kk – check number figures,
• bbbbb is the national code of the bank,
• ggggggg is the branch identifier,
• ccccccccccccccccccccccccc – account number,
• xx – check characters.

And this is what the French IBAN looks like with the variables substituted:

FR14 2004 1010 0505 0001 3M02 606

This is just an example, each bank account is unique.

Important: In payment documents IBAN is always entered without spaces and extraneous symbols.

Some participant’s IBANs in the system do not carry verification numbers but have other details that other country’s code possibly may not carry. For instance, sending money to Iceland involves the owner’s national identification number, and to Guatemala, it involves the account type.

What is the IBAN number for?

Since 2007, EU financial organizations have had the right to refuse receipt if there is no IBAN-code in the payment order. Moreover, in case of a return of a transaction, banks can take some commission for such a return – and this is widely used.

The international format simplifies filling out the documents – less information is required, it accelerates and cuts the cost of processing payments, and eliminates the possibility of an incorrect accreditation of funds.

History of IBAN creation

The history of the IBAN – International Bank Account Number – starts in the early 1990s and is part of a broad desire to unify and simplify international financial transactions.

IBAN has been a major driver of simplification and acceleration in international payments, and its existence has substantially reduced the possibility of mistakes or delays. That is why it has become the significant component of the global financial infrastructure, enabling a closer integration and co-operation of banks and countries from all over the world.

Format of IBAN

The IBAN format consists of as many as 34 characters: a two-letter country code, two check digits, and the main account number. For example, for the account in Germany, the IBAN format would look something like this: DE89370400440532013000.

In which countries IBAN is used

The International Bank Account Number, or shortly called IBAN, is widely used in many countries of the world, basically in Europe, and partly outside it. Herein, the main regions and countries where IBAN is actively used are reviewed below:

Europe: The IBAN has been adopted by virtually all countries in Europe. In this respect, it includes all the states of the European Union and the European Economic Area such as Germany, France, Italy, Spain, the UK, to mention a few, and the Scandinavian countries. In this respect, IBAN forms part of the Single Euro Payment Area-SEPA standard within which this code is applied to every type of transaction.

Middle East and North Africa: Most countries in this part of the world have also adapted IBAN, which includes Saudi Arabia, UAE, Qatar, Lebanon, and Tunisia, among many others.

Other regions: Other countries outside Europe and the Middle East that use IBAN include Kazakhstan, Mauritius, and Seychelles.

Please note that from time to time, the list of countries using IBAN may be revised-either for new members who join the standard or countries changing their banking systems. Not all the countries have fully implemented the IBAN, but some use it partially when generating certain types of transactions or sometimes with some financial institutions.

It is, therefore, recommended checking such data with countries using IBAN with international financial organizations, including SWIFT, but also with the concerned national banks and financial regulators of the country in question.

What is IBAN

IBAN – International Bank Account Number, international account number of the recipient of funds and consists of the following elements in sequence:

• The two-letter country code (used capital letters of the Latin alphabet) where the bank or branch where the beneficiary’s account is located;
• Two benchmarks;
• Main account number of the beneficiary: up to 30 characters – a continuous sequence of letters and figures without separators. The length of the main bank account number is fixed for each country. The main bank account number includes the identification code of the bank or branch where the beneficiary’s account is opened.

Important! When payment is sent in favour of recipients whose account is opened in credit institutions of the European Union, United Arab Emirates or other countries that use accounts in IBAN format, it is obligatory to specify IBAN. In the case of a non-specified/wrongly specified recipient’s IBAN or the recipient’s account number not being in IBAN format, the application for transfer in foreign currency will be executed. However, here the Bank will not be liable for the likely return of payment by the beneficiary’s bank and withholding of an extra commission from the transfer amount by third party banks.

How a financial company can give to its customer an individual IBAN number

While assuring security and ease of use, here are a few main ways whereby a financial services firm can offer unique IBAN numbers to its customers:

In fact, for a financial organization to be able to provide each customer with an individual IBAN, it presupposes operation in accordance with regulatory requirements, highly developed technological infrastructure, and reliable customer support. It means that the reliability, security, and comfort of executing international payments and other financial operations are warranted for the users.

What is an IBAN needed for?

First, IBAN helps reduce the possibility of error in the international transmission of money. With such a precise structure, comprising a country code, check digits, and very specific details on the account, it greatly reduces the chance of a transfer of funds to another account other than intended.

Second, the IBAN speeds up the payment process, as through an IBAN number, banks can conduct automatic validity checks in advance before the actual processing of transactions. This saves time spent on manual verification of data and the possibility of refunds due to errors in detail.

Consequentially, IBAN consolidates uniform standards among banks and facilitates work between banks operating in different countries. It is especially important within the European Economic Area, where active use of IBAN allows for efficient and reliable cross-border payments.

Note that IBAN itself cannot guarantee full security of any transaction but rather forms one significant part of the entire international protection of payments. Other aspects that involve security would include the protection of credentials and the verification of reputation for the receiving bank.

A new account structure cuts the risks described heretofore and permits verification of the correctness of a number in advance of performing any transaction. The speed and accuracy of operations increase in two ways:

1. By introducing technologies that are working without human intervention. This opportunity is provided by the system of straight-through processing.
2. Considering joining an already existing global system for settlement and payments.

Both cases require new software that is not compatible with old banking standards, including 13-digit numbered accounts.

The new system is particularly favourable for the following:

• Banks
• Enterprises which have habitual work with counterparties of the European Union and other countries which have adopted IBAN
• Organisations expecting foreign investments – not only because payments towards them will be easier and faster but also because the cash circulation system will be clearer to foreigners.

To sum up, IBAN forms a part of the mainstay of the international financial system. It standardizes international payments and reduces errors in them, with quickened processing. This makes cross-border financial transactions fast and secure.