The International Bank Account Number (IBAN) is a globally recognised system for uniquely identifying bank accounts.
An IBAN is a code of up to 34 characters, consisting of letters and numbers. This standard was developed to simplify and ensure the accuracy of international bank transfers.
History of IBAN
IBAN was introduced in the late 1990s to standardise bank transactions, initially within the European Union. In 2007, SWIFT company became the official registrar of the standard. By 2013, the IBAN system was in use across 62 countries, reducing errors in cross-border money transfers to less than 0.1% of the total volume of payments.
As of mid-2024, 88 countries had adopted the IBAN system. Notably, the United States and Canada remain the largest countries that do not use IBAN in their banking practices.
IBAN: the meaning of the characters
The IBAN is a flexible and user-friendly format designed to minimise recording errors. Each character in the code carries specific information:
- Country code: the first two letters represent the country (e.g., PL for Poland, AL for Albania, etc.).
- Check digits: two digits calculated according to the ISO 7064 standard to verify the code’s accuracy.
- Bank code: three digits identifying a specific bank.
- Branch code: the next four digits refer to the specific bank branch.
- Basic bank account number (BBAN): a code identifying the individual bank account within the financial institution.
An example of an IBAN is: AT483200000012345864 (Austria), CZ5508000000001234567899 (Czech Republic).
An IBAN is required only for receiving payments. To send money, you must obtain the recipient’s IBAN.
