About 56% of people report using online and mobile banking as their primary ways to manage their bank accounts.
If you’re doing business internationally, you’ve probably had to transfer money to vendors. That isn’t as simple as it seems. Banks charge a lot of money for an international transfer, but there is one way to transfer funds easily.
You’ll need to get a vendor’s IBAN number. What is an IBAN? Read on to learn what this number is in this IBAN guide.
What Is an IBAN?
IBAN means International Bank Account Number. It’s a standard set of numbers used by banks across Europe to make it easy to transfer funds from one bank to another across borders.
Banks in Europe tend to use IBANs the most, but this standard is an international standard. Banks in North Africa, the Middle East, and the Caribbean also use IBANs.
Banks created the standard to reduce errors, which turned into transfer delays. Payments would get rejected, and people would pay more in bank fees to make a simple transfer of funds.
IBANs have up to 34 characters to create a unique identifier for your bank account. The first two characters are the country code.
You’ll see ES for Spain and UK for banks in the United Kingdom. The next two numbers contain a check number.
The bank code and branch number of the bank are the next numbers, followed by your bank account number.
Is giving out your IBAN number safe, especially since your bank account number appears? They are and that’s because these codes get used for paying into your bank account.
A scammer would need to find more information about you, such as your date of birth, national ID number (Social Security, Codice Fiscale, DNI, etc.), and address.
Application of IBANs
How and when would you need an IBAN number? If you’re a business or individual based in Europe, this is the most common way to transfer funds.
A business that has customers across the continent would need an IBAN number to ensure the safe transfer of funds. A gaming software bank account with an IBAN number would give customers peace of mind.
IBAN vs. SWIFT
IBAN is one standard that’s used by banks. Another one banks outside of Europe use is SWIFT. SWIFT is an older standard created by banks.
It’s used to identify the banking institutions for transfers, where the IBAN goes deeper to identify your unique bank account.
Most banks still use SWIFT for international transfers across the world. If you’re located in the US and need to transfer funds to Europe, your bank will likely ask for the SWIFT code.
There are online banks such as Wise that let you transfer funds between one bank and another using an IBAN number. These services have lower fees because they’re online.
A Quick IBAN Guide
What is an IBAN? It’s a unique code that lets you transfer funds across borders. Even though it’s primarily used in Europe, its adoption grows across the world.
Now that you know more about international banking, you’ll want to know more about other business and financial tips. Head over to the home page for more helpful articles.