IBAN stands for International Bank Account Number. 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. It is a standard international numbering system developed to identify an overseas bank account. The IBAN system was originally adopted by the European Committee for Banking Standards (ECBS) and since 1997 as the international standard ISO 13616 under the International Organization for Standardization (ISO) . The current version is ISO 13616:2020, which indicates the Society for Worldwide Interbank Financial Telecommunication (SWIFT) as the formal registrar.
An IBAN number is a type of bank code. It starts with a two-digit country code, followed by two numbers, and several more alphanumeric characters. The number includes different numeric identifiers, such as a bank account number and country code, that serve to convey the correct bank and bank account to international banks. Each set of characters in an IBAN provides information on the account to verify it during the transaction. IBANs can only be used to send or receive funds and cannot be used for other purposes.
The IBAN system was designed to simplify the transfer of money overseas, but it is also used in some countries for domestic transfers. Initially developed to facilitate payments within the European Union, it 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.
