Frequently Asked Questions about IBAN
  • An International Bank Account Number (IBAN) is a standardized format for displaying unique account information when making an international money transfer. The purpose of the IBAN is to reduce errors and improve validation of cross border payments. Allowing up to 34 alphanumeric characters, an IBAN consists of a two-digit country code, two check digits, and a Basic Bank Account Number (BBAN) that contains specific bank and account details. Each country is responsible for its own BBAN structure and SWIFT is the official registrar of the national IBAN formats.
  • The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is an international organization that provides a global network for financial institutions to communicate securely and effectively. SWIFT focuses on the standardization of payment orders and is the official registrar of IBANs and SWIFT/BIC Codes.
  • A SWIFT Code, also known as a Business Identifier Code (BIC), is an 8 to 11-character standardized international code that uniquely identifies a financial institution. The purpose of a BIC is to ensure a payment is routed to the proper bank, particularly for international transfers. A BIC consists of a four-letter bank code, a two-letter country code and a two-digit code that indicates the location of its head office. The last three characters are optional if the bank wants to specify a particular branch. SWIFT is also the BIC registration authority.
  • A check digit is added into an account number as a way to verify whether the information provided can possibly be true. It allows for a quick mathematical calculation that ensures there are no missing or extra digits, or transposition errors. A check digit will not ensure you have the proper account number for the intended recipient, it will only validate that such an account actually exists. The destination bank is responsible for calculating the check digits, as well as providing the IBAN.
  • An IBAN and BIC are required to send money to countries that have an approved IBAN format. Some payment providers will request the sender provides both pieces of information whereas others will only ask for an IBAN because they can calculate the BIC on the sender’s behalf. The money transfer recipient should get this information from their bank since it generates the IBAN. Both the IBAN and BIC can usually be found on a bank statement.
  • Initially developed to facilitate payments across the European Union, it has since been adopted by most European countries as well as many countries in the Middle East and the Caribbean. North American, Australasian, and Asian countries do not use the IBAN for money transfers unless sending a payment to a country that has adopted the IBAN. See the countries listed in the SWIFT IBAN Registry in the IBAN Country List.
  • The IBAN is not yet universally adopted. Account numbers, routing numbers, and SWIFT Codes may be required when sending an international money transfer to some countries.
  • The Single Euro Payments Area (SEPA) was formed to facilitate cross border euro transfers within the European Union (EU) and European Free Trade Association (EFTA). SEPA makes it possible to manage all euro payments within the SEPA region from a single bank account. Although still able to charge a transfer fee for SEPA payments, banks are not permitted to make deductions from the amount transferred.
  • Yes, a recipient’s IBAN is needed for all SEPA payments because it still serves as the unique account identifier. Both the IBAN and BIC are currently required for cross border SEPA transfers but many countries will be transitioning to the ‘IBAN Only’ rule starting in February, 2016.