Nowadays, having an IBAN is pretty standard, especially within European countries. Still, some might wonder, why IBAN codes are so long, or why were they created, if SWIFT codes were already a thing.
This article will cover these questions, and also explain how to send money to somebody’s IBAN, if you are new to that. So, buckle up and let’s go!
What’s an IBAN number
An International Bank Account Number (IBAN) was established in 1997 by the European Committee for Banking Standards to make money transfers safer and more convenient. IBAN can consist of 34 characters maximum, and the length varies from country to country. Yes, dealing with such a great number does not seem easy at first, but let’s dive into what it stands for.
Here’s an example of how a standard IBAN looks like – EE38 2200 2210 2014 XXXX.
1. An IBAN starts with two letters that show an ISO code of the country. For example, GB stands for Great Britain, HU – for Hungary, EE – for Estonia, and so on.
2. The two digits next to an ISO code are check digits – an essential part of an IBAN that allows detecting if there are any errors. You see, this number is calculated through the MOD97 algorithm, in which the rest of IBAN digits are used. Thus, if you referred to an incorrect IBAN, the checking figures will help to spot that during the validation process.
The next part of an IBAN is a Basic Bank Account Number (BBAN), a bank account number specific for every country. It consists of a bank code, a branch code, and an account number.
3. A bank code is a set of digits representing a banking institution, where you opened an IBAN. The length of it differs and can contain both numbers and letters. For instance, bank code “2100” stands for Spanish CaixaBank, and “BKEN” is a Bank of England. A lengthy “3704 0044” code is for the German Commerzbank. A code “22” used in our example stands for Swedbank.
4. Then follows a branch/settle code, by which you can identify the banking branch which holds the account. Not all IBANs contain this code. Here the code is “00”.
5. The rest of your IBAN is an account number, which can also contain letters. In our case, its 2210 2014 XXXX.
Please note that in some cases, the IBAN ends with a second set of check digits, for instance, for French account users. You also can check what your IBAN consists of online on sites like this.
All in all, IBAN is used as a more precise method of detecting if the transaction details are correct. Thanks to the implementation of IBANs, the errors that occur during international money transfers reduced to under 0,1% of total payments.
Which countries use IBAN codes
Though IBANs were originally meant to be used within the European Union, they were successfully embraced by additional countries.
Right now, there are 77 countries and territories listed in the IBAN registry.
These are 27 members of the EU, and Andorra, United Arab Emirates, Albania, Azerbaijan, Bosnia and Herzegovina, Bahrain, Brazil, Republic of Belarus, Switzerland, Costa Rica, Dominican Republic, Egypt, Faroe Islands, Georgia, Gibraltar, Greenland, Guatemala, Croatia, Israel, Iraq, Iceland, Jordan, Kuwait, Kazakhstan, Lebanon, Saint Lucia, Liechtenstein, Monaco, Moldova, Montenegro, Macedonia, Mauritania, Mauritius, Norway, Pakistan, State of Palestine, Qatar, Serbia, Saudi Arabia, Seychelles, San Marino, Sao Tome and Principe, El Salvador, Timor-Leste, Tunisia, Turkey, Ukraine, Vatican City State, Virgin Islands, Kosovo.
Knowing your International Bank Account Number is crucial for SEPA payments. Check out our article “What are SEPA Transfers and how to make them” for a full list of SEPA zone countries.
Do you need an IBAN to transfer money?
International Bank Account Number is necessary for cross-border payments within Europe and to other countries.
Also, in most cases, the SWIFT code is required for these transfers. Keep in mind, that American and Canadian banks don’t use IBANs, so knowing a SWIFT code is essential if you want to send paments over there.
SWIFT was established in 1973 to transfer information for performing banking operations, including international transactions. Right now, SWIFT is used globally in over 200 countries.
SWIFT code, also known as a Bank Identifier Code (BIC), – is a set of 8 to 11 characters used for the identification of a specific bank in cross-border transactions. As we’ve established before, to avoid errors, IBAN contains a lot more information about a money transfer operation, and then SWIFT does, while SWIFT covers the bank identification. However, usually, you still need both to make an international transaction to another IBAN.
How do I send money to an IBAN?
As was established before, to send money to another IBAN, you need to know a person’s IBAN and BIC and fill in these numbers when transferring funds. You also may be required to enter the beneficiary’s name and address, as well as payment description.
To make SEPA transfers through Genome, you need to know the beneficiary’s name, IBAN, and SWIFT/BIC. If money is sent before 15:55, the funds will reach the receiver the same day. If not – arrive on the next business day. Note that funds are not credited to the payee’s account during the weekend and holidays, the list of which you can find here.
Where to find your IBAN and SWIFT/BIC?
Typically, you can look up this information in a personal cabinet of your bank or through a banking app.
If you use Genome, all the banking data is available to you in just three clicks:
– Sign in Genome;
– When on your dashboard, roll open the “Account details” tab, which is situated right underneath your balance.
And there you have it – all the necessary information is stored in one place, just like all Genome’s accounts and services can be managed from a single online dashboard.
With Genome, you can have multiple IBANs, open personal, business and merchant accounts, exchange currencies, and transfer money abroad. The onboarding is easy and takes place completely online. Feel free to contact our support team via email or talk to us directly through a chat on Genome’s website, if you have any questions.