What is an IBAN Number and How it Differs With SWIFT

If you want to send money internationally from your bank, you have likely been asked to provide certain numbers. Two of the most common ones are SWIFT and IBAN numbers. These numbers help your local bank to initiate payments to the actual person or company you are sending to. This article explains what is an IBAN number, how it differs with SWIFT, and how to validate the number.
What is IBAN number - iban germany example

What is IBAN Number?

What is IBAN? IBAN stands for the International Bank Account Number (IBAN). This is a number that is used to identify bank accounts across different countries. Its goal is to simplify the process, reduce errors, and ensure that money reaches the intended person or company.

The idea of creating the IBAN was initiated by the European Committee of Banking Standards (ECBS) with the goal of easing money transfer across the European Union. It was then adopted by other countries especially those in the Middle East and Caribbean.

Is there a US IBAN number? Banks in the United States and Canada do not use the IBAN number.

IBAN Number Example

The IBAN format cannot be more than 34 alphanumeric characters that include the country code, two check digits, and a number that has the domestic account number, branch, and the routing information. The check digit is important in the verification of the check by the local bank.

Examples of IBAN numbers for Belgium and United Kingdom are BE71 0961 2345 6769 and GB98 MIDL 0700 9312 3456 78 respectively. German IBAN example is DE89 3704 0044 0532 0130 00. Banks confirm the IBAN number by converting it into an integer and performing a mod-97 operation. If the number is valid, the remainder is equal to 1.

What is IBAN discrimination?: IBAN discrimination is when a bank or company doesn’t accept your IBAN because it’s not from the same country in which the bank or company is based.

IBAN vs SWIFT Number

Is IBAN the same as SWIFT? There is often a confusion when it comes to SWIFT vs IBAN. The main difference between IBAN and SWIFT is that while IBAN’s goal is to identify a particular account, SWIFT is used to recognize banks.

The name SWIFT stands for Society for Worldwide Interbank Financial Telecommunication and is headquartered in Switzerland. The number has four main parts, which are a four-letter bank code, a two-letter country code, a two-digit location code, and a two-digit branch code.  For example, the SWIFT number for JP Morgan Chase Bank is CHASUS33.

In reality, a SWIFT number works as follows. If a Citi Bank customer in the US wants to send money to a friend who has a bank account in Italy, she will need to have the SWIFT number of the friend’s bank. Citi will then send the payment transfer SWIFT message to the friend’s bank using the SWIFT’s secure network. After receiving the message, the bank will clear the funds to the friend. Most banks around the world have a SWIFT number.

IBAN vs Account Number

As pointed out earlier, IBAN is a code used to identify individual bank accounts for a cross-border transfer while a bank account are numbers used to identify a specific bank account. Account number is usually the last 8 – 12 digits of on the IBAN number.

Using the IBAN Checker

When sending funds to a person or a company, it is important to validate whether the number is accurate. To do this, there are many free web and mobile platforms that allow you to check and validate the number. For example, using the IBAN website, the following result was generated.
Source: IBAN

IBAN Countries List 2021

The following countries the use of IBAN is mandatory.

CountryIBAN lengthCountry code
Andorra24AD
Austria20AT
Bahrain22BH
Belgium16BE
Bosnia-Hercegovina20BA
Bulgaria22BG
Croatia21HR
Cyprus28CY
Czech Republic24CZ
Denmark18DK
Estonia20EE
Faeroe Islands18FO
Finland18FI
France27FR
Georgia22GE
Germany22DE
Gibraltar23GI
Great Britain22GB
Greece27GR
Greenland18GL
Guernsey22GB
Hungary28HU
Iceland26IS
Ireland22IE
Isle of Man22GB
Isle of Man22IM
Italy27IT
Jersey22GB
Jersey22JE
Jordan30JO
Kazakhstan20KZ
Kuwait30KW
Latvia21LV
Lebanon28LB
Liechtenstein21LI
Lithuania20LT
Luxembourg20LU
Macedonia19MK
Malta31MT
Moldova24MD
Monaco27MC
Montenegro22ME
Netherlands18NL
Norway15NO
Palestinian Territory29PS
Poland28PL
Portugal25PT
Qatar29QA
Romania24RO
San Marino27SM
Saudi Arabia24SA
Slovakia24SK
Slovenia19SI
Spain24ES
Sweden24SE
Switzerland21CH
Tunisia24TN
Turkey26TR
United Arab Emirates23AE

The use of IBAN in the following countries is recommended.

CountryIBAN lengthCountry code
Albania28AL
Azerbaijan28AZ
Belarus28BY
Brazil29BR
Costa Rica21CR
Dominican Republic28DO
Guatemala28GT
Iraq23IQ
Iran26IR
Israel23IL
Kazakhstan20KZ
Kosovo20XK
Kuwait30KW
Mauritania27MR
Mauritius30MU
Pakistan24PK
São Tomé and Príncipe25ST
Serbia22RS
Seychelles31SC
St Lucia32LC
Ukraine29UA
Vatican City State22VA
Virgin Islands24VG
East-Timor23TL

Final Thoughts on IBAN vs SWIFT

International trade and globalization have led to the need for faster and accurate international money transfer systems. Because of technology and international cooperation, it now takes a few hours to have money sent from one country to another. This has simplified the money transfer system that used to take days and weeks.

IBAN and SWIFT numbers are very important when making international transactions. They have made the process faster and safer. They are a proof of what the world can achieve through cooperation and standards.

 

There’s also a company called Iban Wallet, which is something completely different: Iban Wallet is a modern peer-to-peer lending company that helps individuals and businesses make money by lending to pre-qualified borrowers.

Vincent is a writer with an interest in finance, business, technology and health niche. He holds a Bachelors degree in Applied Statistics with computing. Read more about Vincent and see our complete editorial team at FiFi.