What is an IBAN? A complete guide

What is an IBAN?

An IBAN is a numerical code which makes it easy to instantly identify your bank account internationally. It’s used by banks all across the world, and follows a very specific (globally agreed on) order. This makes it simple for a bank in any country to quickly pick out where money is coming from and going to.

They don’t outright replace your domestic bank account number, but instead serve as an additional source of information during a transfer – providing information on your country of origin, and the exact branch the money is being transferred from.

While they are primarily used in Europe (where they originated), IBANs are recognised all over the world. North America, Australia, and New Zealand do not use IBANs as a primary source of identification (each having their own system in place), but will still process payments from European and other global accounts that operate with them.

Example of an IBAN

As we’ve discussed, an IBAN will follow a specific format. This consistency makes it easier for countries around the world to immediately identify what account money is being moved into or out of. Despite that, the amount of digits used will vary between countries (owing to domestic differences regarding the length of your regular bank account number).

The longest an IBAN can be is 34 characters. In the UK, an IBAN is likely to only be 22 characters in length. Here’s an example of what a British IBAN might look like:

• GB - Country code

• 13 - Check number

• ABCD - Bank identifier

• 12345678901234 - Account number

Here’s a handy guide to help better understand what each part of the number means:

• Country code. This two character code will tell the receiving bank where the transfer is coming from.

• Check number. This is an automated pair of digits, which is used by all banks to tell if a payment being made is valid or not.

• Bank identifier. This is the information which is used to determine what bank an account is linked to.

• Account number. This is your actual account number, which will sometimes also include your sort code. If it does, these will appear as the first six digits, with the account number following. The purpose of the sort code is to give further information about the specific branch money is coming from or going to.

Just as with regular bank account numbers, no two people will have the same IBAN.

Where can I find my IBAN?

It’s likely you won’t instantly know what your IBAN is. There are several ways you can quickly locate, or even calculate, yours. Here are some of the best methods:

• Your bank statement. Look at the top right hand corner of your statement. If you notice a number which follows the same pattern we discussed, this is likely to be your IBAN.

• An IBAN calculator tool. Some banks will provide an IBAN calculator tool online. If not, you can use a third-party resource to be provided with one.

• Ask your bank. If all else fails, turn to your bank. Get in direct contact with them and they should be able to provide you with your number. Be prepared to verify your identity if you follow this method.

You might even be able to work out what your exact IBAN is using the structure we’ve laid out above. That said, it’s important not to get it wrong, as this can cause a transfer to be cancelled.

If you decide to work it out on your own, or use any other method which leaves you unsure, you can use an IBAN verification tool to determine if it’s correct or not. This will let you know if the IBAN you’re trying to use exists or not.

How to find out someone else’s IBAN

The best way to find out someone else’s IBAN is to reach out directly to them and ask. This should alleviate the need to use any calculator tools, which are susceptible to errors if you input any of their data incorrectly.

Even once someone has provided you with their IBAN, it’s still smart to use a verification tool and double check that it’s correct. It’s unlikely that someone would give you a fake number, but it could be that they themselves have made an error in generating their own number.

What is the difference between a SWIFT code and an IBAN?

Both an IBAN and SWIFT code are an integral part of a successful international transfer. They work together, and the two are similar in nature, but with some key differences:

• Bank vs individual. The core difference between the two code systems is who they represent. While a SWIFT code is generated to identify a bank internationally, an IBAN is used to tell a foreign bank who an individual is. The two work together in unison to make sure money comes and goes to and from the right accounts.

• How they’re assigned. SWIFT codes are given to banks as part of a centralised organisation. SWIFT itself stands for the Society for Worldwide Interbank Financial Telecommunications. They assign codes to banks all across the world. An IBAN is given by a bank to a customer. They’ll take your account number, then format it to match with the IBAN register.

• Code make-up. We’ve already seen just how long an IBAN can be. By contrast, a SWIFT code is unlikely to ever be more than 8-to-11 characters in length.

• How they’re used. A SWIFT code is what’s required to process a transaction. An IBAN isn’t needed for this, but instead is used to locate a bank account in an international country – ensuring the transfer is deposited to the right place.

What happens if I get the IBAN number wrong on a transfer?

Owing to some possibility for error, there’s a chance you might make a transfer using an incorrect IBAN. It’s important to know what this means for your transfer.There are two possibilities which could happen if an error is made in inputting an IBAN:

1. You use a non-existent IBAN. If the number you send money to doesn’t exist, the transfer will bounce. This means it’s rejected, and the money is sent back to you. Depending on the system you’re using, this could result in a fee.

2. You use the wrong IBAN. It could be you send money to an account that exists, but it isn’t that of your intended recipient. This situation might be harder to spot, as the transaction will process seemingly without a hitch. If that happens, the payment can’t be reversed without the accidental recipient’s permission. If this is the case, you should contact your bank immediately.

IBAN number FAQs

We’ve covered a lot in this guide, but there might still be more you want to know. Make sure to read these IBAN FAQs for a deeper understanding of how this intricate banking identity code works.

Who uses IBANs?

There are currently 82 countries in the world on the IBAN registry. While primarily being used as an identifier in Europe, most continents have at least one country which finds itself on the list. If you want a full breakdown of all the nations which are included, you can check out this resource.

Remember, just because a country isn’t included on the IBAN registry, it doesn’t mean they don’t recognise and accept the system during international payments.

Why was IBAN created?

In short, IBAN was created to streamline the process of transferring money overseas – while also reducing the chance of an error being made during that transaction. There are a series of benefits to its introduction, including:

• Improving the verification process of cross-border payment

• Reducing the chance of an error being made

• Rejecting incorrect payments to avoid lengthy disputes

• Reducing and sometimes eliminating bank charges and fees

• Lowering the length of time it took for an overseas bank transfer

Introduced in 1997, this method of identifying bank accounts in an instant has proven a popular method throughout most of Europe.

How do I get an IBAN?

If you’re a member of a bank in an IBAN region, you can reach out directly and request an IBAN from your bank. Remember that this identification method is only used when receiving payments, and not when making withdrawals.

What do I need aside from my IBAN to send money abroad?

An IBAN is just one component in transferring money to an overseas account. Some of the other factors which you’ll probably need to have to hand include:

• The recipient’s full name and address

• The name and address of your recipient’s bank

• Their SWIFT code

• The total sum you need to transfer

You’ll also need to choose the currency you want the transfer to be converted into. This will usually involve conversion via a live algorithm.

Do you have a better understanding of what an IBAN is, and how it works? Make sure to turn to WorldRemit if you do decide to transfer money internationally. We’ll always offer competitive exchange rates, and some of the lowest transfer fees around. What’s more, your first three transfers are totally free of charge.

If you’d like to find out more about us and what we do, don’t hesitate to get in touch. We look forward to hearing from you.

This communication is intended for marketing purposes only and does not constitute or provide legal, tax, investment or financial planning related advice.