If you have ever sent money overseas via a bank transfer then you have probably already come across an IBAN number. Most bank accounts have them, but they’re only used when you are facilitating an international bank transfer.
You may have heard of an IBAN number used in regards to banking, but what is an IBAN number? IBAN is an acronym for International Bank Account Number. It is a number used for identification with regards to international payments. You can use an IBAN Number when either making or receiving payments to or from other countries. Though IBAN Numbers are required and provide the required information, you may be additionally asked for your account number and sort code.
How To Find IBAN Number
IBAN Numbers are generally to be found easily in the top right-hand corner of your bank account statement. Additionally, many banks offer an IBAN Number generator within their online banking apps. If in doubt, contact your bank to ensure you have the correct number.
Payments made using incorrect IBAN Numbers will be returned or cause delays. Online tools are available to verify an IBAN Number is currently active and correct. If you have access to online banking then you can often find your IBAN Number by logging in to your account and viewing account details. However, if you can’t find your IBAN Number then getting in touch with the customer service team for your bank account will usually be able to point you in the right direction.
Why Do Banks Need to Use an IBAN Number?
Banks use IBAN Numbers to enable automatic payment processing for international money transfers. Using an IBAN Number reduces the time taken to make a transfer of funds to another country, or to receive funds from a foreign country. Using an IBAN Number also ensures the lowest risks of a mistake happening during the process.
The numbers themselves are a code that contains the key information required to complete the transfer. This information includes the country to which the money is destined, the account number of the beneficiary. It also details the name of the bank and the specific branch which holds the account.
When Do You Need an IBAN Number?
If you’re sending money to a bank account that is based in a different country to yours then you’ll need an IBAN Number to make this happen. An IBAN Number is required if you wish to make a payment using SEPA Credit Transfer (SCT).
SEPA is a Europe wide credit transfer scheme that has replaced both cross-border and domestic Euro credit transfers within SEPA (Single Euro Payments Area) countries. This is a banking system used to harmonise the methods used for cashless euro payments and transfers across Europe.
SEPA makes it possible for European consumers, businesses, and governments to make and receive credit transfers and use the direct debit system with the same rules applying to each country. The countries that currently use the system are the 28 EU member states, the members of the European Free Trade Association, namely, Liechtenstein, Iceland, Switzerland, and Norway – and additionally Monaco and San Marino. All SEPA payments are made in Euros.
How is an IBAN Number Generated?
An IBAN Number can be divided into several parts, each of which provides specific different information.
Here is an example of an IBAN Number – GB 24 BUKB 909090 41442444
- GB – The first 2 letters are a country code, in this instance, GB, standing for Great Britain
- 24 – The following 2 digits are an internal check code that is calculated by banks for internal checks to verify the IBAN Number does not contain any mistakes.
- BUKB – These four letters are your Bank Identifier Code (BIC), and every bank is designated by a unique BIC. In this example, BUKB is the BIC for Barclays Bank. The BIC code, also referred to as a SWIFT code, enables overseas banks to identify the bank.
- 909090 – The next 6 numbers after the BIC are your bank’s sort code, for branch identification.
- 41442444 – The final numbers are your account number. The length of which varies from country to country.
How To Use an IBAN Number
To transfer money abroad, on top of the recipient’s IBAN Number you will need their name and address as well as the name and address of the bank receiving the funds. If the payment is not in Euros, you will need the receiving bank’s BIC code.
Once you have these, you will need to choose a money transfer provider. These vary in cost quite considerably. Both fees and exchange rates between providers vary. Choosing a dedicated money transfer service can prove to be more cost-effective than a high street bank, but it is always worth checking both for the lowest fees and best exchange rates.
When you have found your IBAN, your next step is to make your international money transfer. If your transfer is urgent, take note of the times taken by different providers as these can vary. From a customer’s perspective, try reading reviews for different providers, you can generally find these on Google or Trustpilot.
Sending Money Abroad
When it comes to sending money abroad the good news is that there are many different ways to make this happen. You’ll need an IBAN Number in order to transfer money via a bank account, but you should also consider options such as PayPal, Cryptocurrency and even international money transfers. These all work in different ways and as such, you should make sure that you do some research first to enable you to choose the right option for your bank transfer needs.
In fact, if you are likely to be sending money abroad in the future then researching these options now and making sure that you know the IBAN Number you need means that when the time comes, life is made as easy as possible for you – and that your international bank transfer is completed as soon as possible.