The International Bank Account Number (IBAN) is a system internationally agreed upon to identify bank accounts across national borders. Its primary purpose is to facilitate the processing of cross-border transactions. The IBAN is a unique identifier that helps to minimize errors in money transfer processes.
What is “IBAN”?
IBAN stands for International Bank Account Number. It is used to identify individual bank accounts for international transactions, ensuring that payments are sent to the correct account. The IBAN system is utilized by most European countries and many countries outside Europe, making it a crucial component of the global financial system. The IBAN consists of up to 34 alphanumeric characters, including a country code, two check digits, and a long and detailed bank account number that includes the bank and branch identification[1][2].
More information about “IBAN”
The structure of an IBAN is globally agreed upon and standardized, which includes the country code, check digits, and the Basic Bank Account Number (BBAN). The BBAN part of the IBAN varies by country and typically includes the domestic bank account number, branch identifier, and potential routing information. The length of an IBAN can vary between countries; for example, in Germany, it is 22 characters long, while in Malta, it can be up to 31 characters[5][6]. The IBAN system is overseen by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which maintains the IBAN registry[1].
Related to “IBAN”
Here are some additional terms that are related to IBAN:
- SWIFT/BIC Codes: A system used alongside IBAN for international bank transactions, identifying specific banks globally.
- BBAN (Basic Bank Account Number): The part of an IBAN that represents the individual account number and bank branch for domestic transactions.
- SEPA (Single Euro Payments Area): A European Union initiative that uses IBAN to simplify bank transfers in euros.
The introduction of the IBAN system has significantly improved the efficiency and security of international payments, reducing the risk of errors in the transmission of cross-border transactions.