IBAN

What Is an IBAN?

An International Bank Account Number, known simply as an 'IBAN', is a standardized, internationally recognized code used to identify a specific bank account owned by a person or organization.

A crucial part of transferring and processing a currency exchange and sending money both domestically and abroad — IBANs are used to identify both the specific bank and the bank account number of a recipient.

In short, this means that the IBAN linked to your bank account allows you to make and receive faster and easier international transactions globally — all done securely and transparently.

IBAN: Background and Scope

The IBAN system had its origins with the European Committee for Banking Standards (ECBS) in 1997and gradually became the norm across Europe over the course of the 2000s.

Today, IBANs are mainly used within the European Union, where they're by far and away the most used and familiar way of providing one's banking details. However, IBANs are by no means exclusively used in the EU and have been widely adopted across large parts of the globe.

For example, outside of Europe, many countries in Africa, the Middle East, and South and Central America participate in the IBAN system, including Brazil, Turkey, Saudi Arabia, and Morocco.

What Does An IBAN Look Like?

While not entirely consistent from country to country, IBANs can be roughly divided into three essential parts, each with its own function and use:

The first two characters in an IBAN are letters. These are used to specify the country in which the bank account is located.

In the example above, 'IT' is the Alpha-2 ISO 3166 international standard code used to represent Italy. (A full list of these codes can be found on the official IBAN website).

The next two characters that make up an IBAN are known as 'check digits'. This pair of numbers plays a key role in determining whether the IBAN in question is valid.

In the world of international banking, these check digits are particularly useful for figuring out whether an IBAN was typed in incorrectly, for example.

The remainder of the IBAN varies considerably depending on which country it comes from. A string of numbers (and sometimes letters) up to 30 characters in length, this part of the IBAN is tasked with identifying the specific branch and bank account number of the recipient.

Depending on the country in question, it can contain various bank and bank account identifiers. However, the two most commonly found numbers in the last digits of the IBAN are the national bank code and the account number.

In the case of the Italian IBAN above, while the remaining string of digits does include both the national bank code and the account number, they also have a 'check character' and a branch code — two numbers that are specific to Italian IBANs.

Note: The example IBAN used above is fictitious. These numbers can be checked for validity using the IBAN checker on IBAN's official website.

Finding Your IBAN Number

Locating your IBAN is a fairly straightforward process. While the exact steps and names of precise features may differ slightly from bank to bank, in general, all you'll need to do to find your IBAN is the following:

• Sign in securely to your internet banking profile;
• Locate the bank account whose IBAN you're looking for;
• Look for the IBAN. If it's not displayed directly on the account overview, click on the bank account itself, and it will more than likely be shown there.

If your IBAN still does not display after following the steps above, we’d advise that you contact your bank directly to inquire about it. Bear in mind that, if you have a Maestro card, your IBAN should also be displayed there, so be sure to check your physical bank card too.

IBAN Discrimination

In the EU, it is illegal for merchants to refuse the payout or receipt of funds based on an IBAN's origin. This is known as IBAN discrimination and is barred under Regulation No. 260/2012 of the EU.

For example, if an employer in Ireland were to refuse to pay a salary to an employee because their bank account had a German IBAN, this would be illegal. To find out more about IBAN discrimination and what to do if you happen to fall victim to it, see our guide here.

Photo by Thomas Lefebvre on Unsplash