A business that makes international transactions — such as purchases, leases, investments, or supplies and materials — calls for an IBAN. Your IBAN ensures that the account numbers for international financial transactions are safe, accurate, and processed successfully.
You (and your bank) will need it for conducting international transfers quickly and securely — but how do you know you have one, and where do you find it? Here’s everything you need to know about your business IBAN number, including how to get one, whether your bank has one, and how to find yours.
What is an international bank account number (IBAN)?
An international bank account number (also referred to as IBAN or IBAN number) is a unique code used to identify a specific bank account to make payments on an international scale. It consists of 34 letters and digits representing a specific bank code for safe and quick cross-border payments.
These specific characters help an international bank identify which beneficiary bank, country, and individual bank account is the recipient of the cross-border wire transfers. It’s also used as a verification method to ensure that the transaction details are correct.
Since IBAN was created to reduce errors when handling cross-border payments and diminish transfer delays and associated bank fees, it uses an internationally-recognized format that financial institutions use to identify payments worldwide.
Here’s the typical structure of an IBAN number:
The IBAN format contains unique identifiers based on the specific financial institution and country you send money abroad to. As you can see, the first two characters represent the two-letter country code. These codes generally correlate with country abbreviations — for example, Greece’s country code is “GR,” and France’s is “FR.”
The IBAN format is followed by two-check digits and up to 34 alphanumeric characters, also known as the basic bank account number (BBAN). The specific bank determines these as per the country’s financial standards.
How does transferring with an IBAN number work?
When you make any international payment, the receiving bank checks the numbers and letters of your IBAN bank code against the bank’s payment system.
Once the IBAN check is done and the bank code characters have been validated against their database, the bank confirms the transaction’s authenticity, and the payment is processed successfully.
Quick tip: Don’t forget that each IBAN transaction incurs a processing fee for the sender and, possibly, the recipient.
What happens if you provide the wrong IBAN number?
It’s important to point out that you can only use the IBAN to receive international payments (not to withdraw money). Any transaction made is only valid if you know the corresponding beneficiary’s IBAN.
If the IBAN has been entered incorrectly, the payment will be rejected and sent back to the sender. This failsafe is essential for every transaction, but it quickly becomes problematic if you have to make multiple international payments or send a lot of money that gets rejected.
In cases like these, you’ll need to provide the correct IBAN to process the payment and will likely be charged a corresponding banking fee for rejected payments.
Is IBAN the same as a bank account number?
IBAN and bank account numbers are different: A bank account number is a unique set of numbers used to identify an individual account and the account owner. Your IBAN is additional information that helps international banks or financial institutions identify your specific account for an international money transfer.
Who uses international bank account numbers?
The international bank account number was developed in 1997 to allow people and businesses within the European Union to send money to other countries.
IBAN has since been adopted by the European Committee for Banking Standards, with more than 75 participating countries in Europe, the Middle East, North Africa, and the Caribbean.
However, not everybody uses IBAN: Some notable exceptions are the United States, Australia, China, Japan, and Canada, which rely on the Society for Worldwide Interbank Financial Telecommunication, also known as the SWIFT system.
I’m in the U.S. Do I still need to worry about international bank account numbers?
As a U.S. business owner, you should still know how IBANs work: Although the U.S. does not use IBAN, U.S. banks do recognize and process IBAN payments when dealing with international transactions.
For instance, U.S. banks use ABA (American Bankers Association) routing numbers to process payments for domestic transfers via ACH payments and SWIFT codes for international ones. But if you send money internationally to a country that participates in IBAN, you automatically participate in the IBAN system to help identify bank accounts.
IBAN vs. SWIFT/BIC codes: What’s the difference?
There are a few things you should know right off the bat when it comes to IBAN and SWIFT/BIC codes: Firstly, SWIFT and BIC (which stands for Bank Identifier Code or Business Identifier Code) are used interchangeably.
Secondly, the common ground between IBAN and SWIFT/BIC is that both are recognized methods set by the International Organization for Standardization (ISO) for bank account identification.
But the main difference lies in their process of identifying the individual bank accounts involved in a money transfer — among other aspects:
- Account vs. bank identification: The IBAN code identifies the individual bank account involved in the international bank transfer, while a SWIFT code identifies the specific bank.
- Format: While the IBAN format typically contains up to 34 characters, the SWIFT codes similarly have a mix of letters and numbers but up to 8 or 11 characters.
- Usage: IBAN is primarily used to make international bank transfers, and SWIFT/BIC codes are used by many financial institutions such as brokers or dealers, asset management companies, or foreign exchange.
- Origin: The SWIFT system was created for international banking transactions decades before IBANs were developed. An important distinction is that IBAN codes are not set by a central organization like the SWIFT codes are: The banks issue IBAN codes directly under a format developed in the IBAN Register.
- Extra information: You will typically need an IBAN to send money abroad. Still, there are many cases when you might also need the SWIFT code on top of the IBAN. The bank can pinpoint the recipient’s specific account details and bank by having both numbers. This minimizes any possibility of financial transaction errors.
- Supported countries: Not all banks or countries use IBAN, so the SWIFT code is the method to rely on when sending money to non-IBAN countries like Canada or the U.S.
Learn more about SWIFT/BIC codes here.
How do I find my IBAN number?
Using the correct IBAN number when sending money abroad is key: Always check to ensure that the valid IBAN has been entered before making international payments.
As mentioned before, you won’t have an IBAN number if you only have a U.S.-based bank account. But if you have a business presence in a country that does use the IBAN system — for example, if you have a store in Ireland and opened an account at a local bank there — then you have an IBAN.
You can find your correct IBAN number in the following ways:
Option #1: Check your credit or debit card
This option will vary because some countries don’t display their IBANs on business credit or debit cards. However, if yours does, then your credit or debit card is a good place to look for your IBAN code.
Option #2: Find it on your bank statement
You can find your bank account details in your online or paper bank statement. The international bank account number is typically located in the top-right corner, below your sort code and the bank account number.
If you have an online banking app (which most banks offer now), you can simply log in, download your latest statement, and check there.
Option #3: Use online tools
If none of the methods above have worked — or you want an alternative method — you can always use an online IBAN calculator.
Option #4: Request it directly from your bank
In most cases, your best bet for finding your IBAN is to go straight to the source: Contact your bank directly to provide it. Remember that you may need to give some identity verification, like your social security number or government ID number.
Reduce manual processes to help you connect with customers
IBAN makes it possible to make an international transaction safely and securely, so participating businesses need to understand how the IBAN system applies to them.
Managing all your payment-related processes can be time-consuming and leave your business prone to errors. And in the worst cases, you might get charged for using the wrong IBAN or making payments more than once by accident.
There is a solution: BILL helps you streamline all your domestic and international accounts payable workflows designed to handle payments to more than 130 countries. Reduce double-data entries struggles, complex processes for controlling payments, or high currency exchange rates when paying vendors.
Find out how we can help you pay less, save more, and never keep vendors waiting when doing business abroad.
