Genome’s team is back with yet another article that dives into different types of fraudulent financial situations that people and businesses can face. And this time, card-not-present fraud is on the agenda. Want to know how to avoid scams associated with card-not-present transactions? We gathered some tips below. What is a card-not-present transaction? Before we get to the fraud part, let us first explain what card-not-present transactions are in general. Card-not-present transactions (also known as CNP transactions) are the type of payments a person makes with their debit or credit card. Such payments happen remotely, meaning that the card and
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 Genome article will cover the above 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. Some counties have only 15 characters in their IBANs, while others have more than 20. 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. An IBAN number will always start from letters locating the country.
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 code is calculated through the MOD97 algorithm, in which the rest of the IBAN digits are used. Thus, if you referred to an incorrect number, 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, it’s 2210 2014 XXXX.
Please note that in some cases, the IBAN code 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.
What is the purpose of IBAN?
IBAN number 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.
In other words, the IBAN code is a map or a guideline to where the funds should be moved. Only imagine that there are no rules on how bank accounts all over the world should be formatted. It would be a total mess and, what is more, it’s quite unlikely that transfers would reach their destination accounts.
As we already discussed above, IBAN indicates such crucial information as a country, bank, and the very bank account number. All these pieces are gathered together when both instructing and receiving transactions so that payers and payees can transfer their money to the necessary bank accounts in different parts of the world.
Even though IBAN seems to be a complex code, it brings clarity and order into the vast network of international transfers and bank accounts. By providing the correct IBAN, you can be sure that your money will be settled just in the needed bank account (in case there are no other issues with financial providers).
What is the IBAN registry?
It’s a catalog of all countries that are using IBAN codes. You can download the document on the official SWIFT (Society for Worldwide Interbank Financial Telecommunications) website. On the first pages, you can find general information on what is IBAN number and its regulations.
The rest of the document consists of a detailed analysis of each country’s IBAN number. For example, you will find the length of both BBAN and IBAN, whether the country belongs to the SEPA zone and even the contact details of the national bank.
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 also:
- United Arab Emirates,
- Bosnia and Herzegovina,
- Republic of Belarus,
- Costa Rica,
- Dominican Republic,
- Faroe Islands,
- Saint Lucia,
- State of Palestine,
- San Marino,
- Sao Tome and Principe,
- El Salvador,
- Vatican City State,
- Saudi Arabia,
- Virgin Islands,
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.
Does the United States participate in the IBAN system?
The US does not use or issue IBAN numbers as of now. For domestic transfers, this country has routing numbers, and for cross-border ones – SWIFT codes.
How does an IBAN differ from a SWIFT code?
Both SWIFT and IBAN are the numbers that enable international transfers. Whether you’re moving funds in Europe or between any other countries, you will most likely need SWIFT. Keep in mind, that American and Canadian banks don’t use IBANs, so knowing a SWIFT code is essential if you want to send payments 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 or its branch in cross-border transactions. The last 3 digits in this code identify the branch. They can be also depicted as XXX or not to be there at all (then SWIFT code will only have 8 characters).
As we’ve established before, to avoid errors, IBAN contains a lot more information about a money transfer operation, while SWIFT covers bank identification. However, usually, you still need both to make an international transaction to another IBAN. These two numbers work in a pair to ensure smooth, speedy, and errorless cross-border transfers.
IBAN and BIC: what is the difference?
As it was mentioned earlier, SWIFT and BIC codes are the same and can be used interchangeably. But let’s dig a bit deeper to understand more why this code is so important and why it needs two names.
Telling the truth, the confusion comes from the wrong usage of terms. BIC (Bank Identifier Code) is actually the correct and initial name of the number we’re talking about. It is used in the SWIFT system to locate a specific bank or its branch. As the SWIFT network became so widespread, BIC is often called a SWIFT number, so that most people understand exactly what code is needed.
What Is the difference between IBAN and SEPA?
The full official name of the SEPA zone is the Single European Payment Area. This initiative came to life in the early 2000s to create a network for euro transfers. As the euro became the official currency for most European countries, the cross-border transactions between them had to become faster. However, not all EU countries became members of the SEPA area. Indeed, with time, some territories outside of Europe joined the list, which nowadays makes 36 members.
Learn more in Genome’s article: SEPA countries list 2021
SEPA transactions can be only made in euro currency and between the countries of the SEPA zone. The timeframe for such transfers is usually one working day, which is incredibly convenient and beneficial for those using SEPA services. There are a few schemes for such transactions:
- SCT (SEPA Credit Transfer)
- SDD (SEPA Direct Debit) – available only from 2018
- SCT Inst (SEPA Credit Transfer Instant) – takes up to 10 seconds
Credit transfer is a regular transaction when one person/business sends money to the payee. Direct Debit work in some other way. This type of transfer happens when a creditor withdraws funds from the bank account of a person/business (for example, rent payments). Such transactions can also be regular (monthly) and can only take place after the creditor and payee sign a mandate (agreement).
IBAN code, just like SWIFT/BIC numbers, is the required details to make a SEPA transaction. Thus, SEPA can be referred to as the type of transfer, SEPA area, or SEPA network. IBAN, in its turn, is just a number containing the information needed to instruct and receive different transactions (bank and account number, to be precise).
SEPA system is not the only network where IBAN is required to move funds. For instance, the IBAN code can also be used to make transfers within the SWIFT network.
Do you need an IBAN to transfer money?
International Bank Account Number is necessary for cross-border payments within Europe and to other countries. Currently, it’s not possible to send transactions having an IBAN only. Remember to ask for or provide BIC/SWIFT code as well both when making and receiving transfers.
However, there are some other options to move funds if you or the receiver do not have IBANs. One of them is e-wallets that do not require opening a conventional bank account. Some international transfer companies also provide such a service. You can even come to their branch with cash and send it over to the payee. If you’re curious to learn more about types of international transfers, visit our blog.
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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?
There are a few options of how to find an IBAN number and other account details. First of all, these numbers are always mentioned in official bank statements. Secondly, you can look up this information in your banking app. Thirdly, you can always contact your financial provider via customer support or go directly to the bank’s branch (if it’s convenient for you) to receive this information.
If you use Genome, all the data necessary is available to you in just three clicks:
– Click my.genome.eu link;
– Sign-in into 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 at email@example.com or talk to us directly through a chat on Genome’s website, if you have any questions.
How do I find out what my IBAN number is?
There are a few ways to check your IBAN number and make sure that it’s correct. Remember to do this each time before sending your information to payers to avoid any mistakes with instructing and receiving transfers to your bank account.
The first and most widespread way is to use your mobile banking service. Your IBAN should be available in the Account details section in the mobile/web application of your financial provider. No doubt that using a mobile app for this is a fast and effortless process because it only takes a few seconds.
Bank statements with all your account details are probably the most common way to share the information needed for making a transaction. These are the official documents with the bank’s stamp proving that you’re a holder of the particular bank account. Such paper contains your IBAN and SWIFT numbers, your full name, and other information related to your bank account. Some fintech companies offer such features as downloading necessary statements or sending them to an email address right from your account in mobile banking.
Finally, you can reach out to your financial provider to obtain information about your IBAN code. This can be done either by contacting them directly in any communication channel available (chat, email, phone call) or by visiting a branch in person. With this option, some banks have some waiting time for preparing official statements, so you’d need to ask for them beforehand.
What is an IBAN number example?
Typical IBAN looks like this: EE38 2200 2210 2014 XXXX. In this case, the number has 16 characters. However, the length of this code depends on the country. The maximum number of characters in IBAN can be 34. However, each IBAN starts with 2 uppercase letters locating the country of the bank. They are also called the country’s ISO code. EE – stands for Estonia.
What is the difference between IBAN and account number?
IBAN number consists of a few pieces of information, and bank account number is one of them. To be more precise, you can locate your bank account number in BBAN – it’s a part of IBAN that starts from the 5th character. Its components are a bank code, a branch code, and, the last one, an actual account number. The length of BBAN also differs from country to country and can include both digits and letters.
Are BIC and IBAN the same?
IBAN and BIC/SWIFT codes are two different numbers that hold essential pieces of information for making international money transfers. The role of IBAN is to provide data on one’s bank account. BIC number, in its turn – is responsible for the correct bank and branch codes.
BIC and IBAN cannot be used separately. They work as two keys for two different locks. You will not be able to instruct a transaction correctly without both of them.