An International Bank Account Number (IBAN) is a standard international numbering system developed to identify an overseas bank account. It is an internationally agreed upon system of identifying bank accounts across national borders to facilitate the communication and processing of cross-border transactions with a reduced risk of transcription errors. An IBAN uniquely identifies the account of a customer at a financial institution. The IBAN system was designed to simplify the transfer of money overseas, but it is also used in some countries for domestic transfers as well.
An IBAN number contains a two-letter country identification code, two check digits, and up to 30 characters for the Basic Bank Account Number (BBAN) . Each country decides the BBAN format to cater to its national standard for domestic payments. The number starts with a two-digit country code, then two numbers, followed by several more alphanumeric characters. Note that an IBAN does not replace a banks own account numbering, as it’s only meant to provide additional information that helps in identifying overseas payments.
IBANs can only be used to send or receive funds, and they can’t be used for other purposes such as identifying the account holder or providing account balance information. The IBAN system has been implemented by most European countries and numerous countries in other parts of the world, mainly in the Middle East and the Caribbean. As of July 2023, 86 countries were using the IBAN numbering system.
