International Bank Account Numbers (IBANs) are standardized numbers that play a key role in overseas banking. They identify bank accounts so that international financial transfers can be completed quickly and accurately.
Here, you’ll learn more about IBANs, how they work, and how they differ from other banking numbers.
What Is an International Bank Account Number (IBAN)?
An International Bank Account Number, or IBAN, is a one-of-a-kind identifier that banks use to refer to a specific bank account in any of 80+ countries around the world. In turn, banks use that info to quickly move money between accounts in different countries.
While IBANs are useful in sending and receiving funds, they aren’t used for withdrawing funds or for transferring ownership of accounts.
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How Does an IBAN Work?
An IBAN is a standardized numbering system that includes up to 34 alphanumeric characters to identify accounts for transactions. While the length of an IBAN varies by country, the sequence remains the same to ensure proper routing:
• Country code (two letters)
• Check digits (two digits); this validates the routing numbers and accounts. It is sometimes referred to as a control code.
• Basic Bank Account Number (BBAN); this is an alphanumeric sequence that’s up to 28 characters long and represents a country-specific bank account number (which could represent different types of bank accounts, such as checking or savings).
While the format is standardized around the globe, the length of the code varies depending on the country.
It’s worthwhile to note that when using an IBAN to send or receive payments, there might be a processing fee or commission on the transfer.
IBANs are very much a part of the daily financial flow today. You may not have had international transactions in mind when you took the time to open a bank account, but they are becoming quite common. For instance, you might do business with a vendor overseas or shop online from a company based on another continent.
IBAN Example
Here is an invented example of an IBAN:
• GB 28 2021 6126 1431 9576 17
This would be for a UK bank. It begins with GB for “Great Britain” and has 22 characters.
Here are other examples:
Albania: AL 35 2021 1109 0000 0000 01234567
Denmark: DK 95 2000 0123 4567 89
Spain: ES 7921 0008 1361 01234 56789
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IBAN vs. SWIFT Code
BBoth IBANs and SWIFT codes (aka Society of Worldwide Interbank Financial Telecommunications) are globally recognized and accepted banking transfer identifiers. They play a part in making sure a transfer goes through successfully, and they help keep international finance running smoothly.
They are not, however, the same set of digits. The main difference between an IBAN and a SWIFT code lies in what they identify. Whereas a SWIFT code identifies the financial institution, the IBAN points to a specific bank account. Both work in tandem to help a transaction proceed.
To provide a bit more detail, here are a few other key differences between IBANs and SWIFT codes:
• While an IBAN works more to identify a bank, branch, and bank account numbers, SWIFT identifies a particular bank during a transaction.
• SWIFT Codes are issued by the Society of Worldwide Interbank Financial Telecommunications, which is a member-owned cooperative. The SWIFT banking system is a messaging network that enables financial institutions around the world to talk to one another securely. IBANs, on the other hand, are issued directly by the financial institutions.
• Whereas IBANs are alphanumeric codes that are up to 34 digits, SWIFT codes include alphanumeric code that’s either 8 or 11 characters.
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Do All Countries Use IBANs?
While more than 80 countries use IBANS, not every nation does. IBANs are generally used in the majority of banks in the Eurozone and other European countries. Parts of the Middle East, the Caribbean, and North Africa also use IBANs.
Some countries, such as Austria, Croatia, France, and the Netherlands make IBANs mandatory. Other countries don’t require the use of IBANs, but it is recommended. These include Albania, Brazil, Costa Rica, and the Virgin Islands.
Lastly, there are countries that don’t use IBANs. China, New Zealand, Canada, and the U.S. fall into this camp.
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When Is an IBAN Number Required?
An IBAN number is typically required for international banking transactions. It allows for the accurate transfer of funds between accounts in different countries.
If, say, you need to make a payment to a business in South America or you have bought an item at an auction in Europe, you would likely need the recipient’s IBAN to complete the transaction. With that information, the money could be moved from your checking account to the payee’s account.
How Do I Find an IBAN?
If IBANs are available in both the country you live in and in the recipient’s country, you can obtain an IBAN by reaching out to your bank or checking on your bank statement. The person you’d like to send or receive money from will also need to to get their IBAN by contacting their bank or looking at their bank statement.
If you live in the U.S. and need an IBAN to complete an international transaction, the payee will typically share their banking details for the transfer of funds, including their IBAN.
Worth noting: The IBAN website also has a handy tool to calculate your IBAN code based on your country, bank code, and account number.
The Takeaway
While the U.S. doesn’t use the IBAN (International Bank Account Number) system, when you are sending funds overseas, you’ll need the other party’s IBAN. This number contains vital information that will help the money get to the intended account in another country safely and quickly. In this way, IBANs play an important role in keeping international financial transactions flowing.
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FAQ
What is the IBAN number for the USA?
The U.S. does not identify bank accounts by IBANs. Instead, we use routing numbers and account numbers.
Is an IBAN the same as an account number?
An account number is specific to the individual and identifies their account, while an IBAN layers in more information. It’s an alphanumeric sequence that contains such information as an account number, along with a bank code, bank branch code, and location code.
How many digits are in an IBAN?
IBANs vary in length depending on the particular country. They can include up to 34 alphanumeric characters.
Which countries don’t use an IBAN?
Among the countries that don’t use IBANs are the U.S., Canada, China, and New Zealand. Additionally, there are some countries that suggest using IBANs, but don’t make it mandatory.
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