Statrys Payment Platform Ecosystem

What's an IBAN Number & How Does it Work?

Jonathan Cusimano
Published: 07 May 2020


    An IBAN number is a unique code used to identify a specific bank account for the purpose of cross-border payments.

    Knowing your beneficiary’s IBAN is what you need to make sure your transnational payment arrives safely at its destination.

    If you have any doubt and instruct an international payment with the wrong IBAN, this payment will be rejected by the beneficiary bank.

    Your bank will also charge you a fee to retrieve it.

    Pinpointing the correct IBAN can save you both time and money in the long run.

    There's more to IBAN numbers than just this alone, so here's how it works.

    What is an IBAN?

    An International Bank Account Number, better known as an IBAN Number, is an international numbering system used to recognize bank accounts in relation to cross-border payments.

    Before it was created different standards for bank account identification across countries were confusing and the source of many errors for transactions.

    For countries that have applied IBAN, transaction errors have been reduced to under 0.1% of the total number of transfers.

    To give a little background on where the International Bank Account Number originates, it was initially implemented by the European Committee for Banking Standards (ECB) to overcome these international payment difficulties.

    Originally, the system was developed to facilitate the processing of cross-border money transfers within the EU.

    As it gradually gets adopted by banks beyond the EU, it was made an international standard under ISO 13616:1997.

    Currently, the scheme has been employed by most European countries and several other countries around the world, namely in the Middle East and the Caribbean.

    A full list of these countries is provided at the end of this article.

    Another 25 countries are currently conducting partial/experimental use of the IBAN system.

    Many major countries do not use the IBAN system, including the USA, Canada, Australia, China, Japan.

    However, all these countries recognize the system and process IBAN payments.

    How do you recognize an IBAN number?

    It is a series of up to 34 characters, including both letters and numbers.

    The International Bank Account Number is not the same as the bank account number.

    Actually, it includes the bank account number, plus some more characters that identify the country and bank you’re sending money to.

    The IBAN number contains:
    • Two-letter country identification code
    • Two check digits
    • Up to 30 characters for the Basic Bank Account Number (known as BBAN). The BBAN format is decided by each country to cater to its national standard for domestic payments.

    Let’s have a look at what an International Bank Account Number looks like at:

    A French IBAN Number format

    French IBAN Bank number Format

    A UK IBAN Number format

    UK bank code format

    What’s the difference between SWIFT/BIC codes & IBAN Numbers?

    SWIFT/BIC and IBAN are all internationally acknowledged banking standards used for cross-border payments.

    However, there are some key differences between those international transfer systems:

    • The SWIFT system was created before any initial attempts to homogenize international banking transfer through IBAN. Today, SWIFT is the largest international payment system worldwide.
    • The most significant difference lies in what they identify. Each IBAN pinpoints an individual account in a given bank in a given country. Each SWIFT/BIC code identifies a bank or a financial institution in an international transaction. Both information actually complements each other when a cross-border payment is made to a country participating in the International Bank Account Number system: proper routing of the transaction will be subject to providing correct SWIFT/BIC code and IBAN in the payment details.
    • Unlike BIC/SWIFT code, IBAN codes aren’t assigned by a central organization. They are directly issued by the banks according to a format described in the IBAN Register.
    • SWIFT/BIC codes contain a mix of numbers and letters, and they are always 8 or 11 characters.
    • As a result, the SWIFT/BIC code is always required to process a transaction and the International Bank Account Number information is provided to locate the beneficiary bank account in countries participating to the International Bank Account Number system.

    When it comes to international payments, SWIFT and BIC are used interchangeably.

    For more information on BIC and SWIFT codes, read this article.

    How to check the IBAN Number of your beneficiary

    If you have any doubt about the correctness of your beneficiary’s IBAN, take a few seconds to check this information.

    This will be a good use of your time as any payment instructions made using the wrong IBAN will cause the payment to be delayed and rejected.

    You can also expect your bank to charge a fee for the inaccurate payment.

    In case you only have part of your beneficiary’s IBAN, you may want to find out the missing pieces by using an IBAN calculator.

    We have tried this tool on multiple occasions, and it was reliable in providing the correct International Bank Account Number.

    However, we cannot guarantee it is always reliable so use it at your own risk.

    Obviously, the best way to check your beneficiary’s International Bank Account Number is to go to the source and ask the beneficiary himself.

    A good habit is to double-check the information.

    Believe it or not, it is pretty common for beneficiaries to provide their payment details with an invalid IBAN.

    To do so, you can use an IBAN checker that will help you flag any potential errors.

    And by the way, if you are looking for your own International Bank Account Number, you can locate it by signing into your online banking and checking your account details.

    Most of the banks also show it on your monthly bank statement.

    List of IBAN Numbers by Country

    CountryCodeSEPALengthAccount CheckBranchIBAN Example
    Bosnia and HerzegovinaBANo20✔✔BA393385804800211234
    Costa RicaCRNo22✔CR23015108410026012345
    Czech RepublicCZYes24✔CZ5508000000001234567899
    Dominican RepublicDONo28DO22ACAU00000000000123456789
    El SalvadorSVNo28SV43ACAT00000000000000123123
    Faroe IslandsFONo18✔FO9264600123456789
    Holy See (the)VAYes22VA59001123000012345678
    North MacedoniaMKNo19✔MK07200002785123453
    Saint LuciaLCNo32LC14BOSL123456789012345678901234
    San MarinoSMYes27✔✔SM76P0854009812123456789123
    Sao Tome and PrincipeSTNo25ST23000200000289355710148
    Saudi ArabiaSANo24SA4420000001234567891234
    Slovak RepublicSKYes24✔SK8975000000000012345671
    United Arab EmiratesAENo23AE460090000000123456789
    United KingdomGBYes22✔✔GB33BUKB20201555555555
    Virgin Islands, BritishVGNo24VG21PACG0000000123456789

    When is an IBAN Number required?

    IBAN is needed when you make a cross-border payment and the bank of your beneficiary is located in a country participating in the International Bank Account Number system.

    When instructing the payment, it must be entered in the field reserved for the beneficiary’s account number, without spaces.

    In addition to the IBAN number, you will need at the very least the following information to instruct the payment to your beneficiary:

    • The account name
    • SWIFT/BIC code

    Depending on your bank you may be requested additional information such as the beneficiary’s bank name, the bank address, and the beneficiary’s address.

    For more details about international payment, check our guide providing all the important information.

    Need to do business locally with a real IBAN number without a bank account? Check out our local currency account options.

    jonathan Statrys
    Jonathan Cusimano

    Jonathan Cusimano is Head of FX at Statrys. With nearly a decade of experience in banking and Fintech, Jonathan has advised and assisted many SMEs in their FX hedging and treasury management strategies.

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    Statrys Limited is licensed as a Money Service Operator (No. 19-02-02726) in Hong Kong. Statrys UK Limited is a Small Payment Institution (FRM: 911226) registered with the Financial Conduct Authority in the United Kingdom. Statrys UK Limited (FRM: 902805) is a registered agent of PayrNet Limited (FRM:900594), an Electronic Money Institution authorised by the Financial Conduct Authority in the United Kingdom under the Electronic Money Regulations 2011 for the issuing of electronic money. Trade financing services are offered by our partner, Velotrade Management Limited, regulated by the Securities and Futures Commission of Hong Kong (CE Ref #BJL007)