What is IBAN and How IBAN Works For Money Transfers

Introduction

An IBAN, or International Bank Account Number, is a unique identifier used to make international money transfers easier and safer. It helps ensure that payments are sent to the correct bank account, reducing the chances of mistakes. The IBAN consists of a series of letters and numbers, which include country codes, bank details, and specific account information.

Using an IBAN makes cross-border transactions more reliable. It provides a clear and standardized way for banks worldwide to process payments, ensuring that the money goes to the right place without unnecessary delays. When sending money internationally, having the correct IBAN is essential to avoid errors or issues with the transfer.
This guide will explain how the IBAN works, how to find your IBAN and the benefits it offers when making secure payments. Whether you’re sending money to a friend, paying for goods, or making business transactions, understanding IBAN can help you make safer and more efficient transfers.

What is an IBAN?

IBAN, or International Bank Account Number, is a special code used to identify bank accounts for international money transfers. It helps make sure that the money you send goes to the right bank account, even if it’s in another country.

The IBAN is made up of letters and numbers. It includes a country code, the bank’s details, and the account number. This code makes it easier and safer for banks to process payments, reducing the chances of errors.

When you want to send money to someone in another country, you will need their IBAN to make sure the payment reaches them correctly. It’s an important tool for international transactions, helping money move smoothly across borders.

How Does International Bank Account Number Work?

The International Bank Account Number (IBAN) consists of a country code (two-letter). The number is then followed by two digits. It ends with 35 alphanumeric characters called BBAN (Basic Bank Account Number). Each banking association decides its BBAN for a specific country’s accounts. The IBAN helps in sending wire or interbank transfers.

Important: The USA and Canada are two major countries that do not use IBAN. Yet, they grant the system and process payments.

What is IBAN? It is a standardized way to identify bank accounts across national borders, facilitating international transactions.

Example of IBAN

An example of an IBAN is:
GB29 NWBK 6016 1331 9268 19

This IBAN is for a bank in the UK. Here’s what each part means:

GB: Country code (United Kingdom)
29: Check digits (used to verify the IBAN’s accuracy)
NWBK: Bank identifier (National Westminster Bank)
6016 1331 9268 19: The actual account number.

Each country has a different format for its IBAN, but all IBANs follow a similar structure to ensure they can be read and used internationally.

Why Was IBAN Created?

The purpose of an IBAN is to reduce banking errors. It also helps in verifying cross-border transfers by reducing the following:

Rejected Payments
Delayed Transfers
Bank Charges and Fees

All in all, the IBAN system plays an important role in simplifying money transfers. Besides your account number, it includes all information about the account holder, including:

Account Holder’s Bank
Account Holder’s Country
Other Account Details

What is SWIFT/BIC Code?

A SWIFT/BIC code is a unique identifier used by banks to send money internationally. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, while BIC stands for Bank Identifier Code. Both terms refer to the same thing, and they are used to identify a specific bank or financial institution when making cross-border payments.

The SWIFT/BIC code helps ensure that the money you send reaches the correct bank. It typically consists of 8 to 11 characters:

The first 4 letters represent the bank’s name.
The next 2 letters represent the country.
The following 2 letters identify the location or city of the bank.
The last 3 digits (optional) refer to a specific branch of the bank.

For example, the SWIFT/BIC code for a bank might look like this: DEUTDEFF

DEUT: Bank name (Deutsche Bank)
DE: Country code (Germany)
FF: Location code (Frankfurt)

SWIFT/BIC codes are essential for ensuring secure and accurate international transfers.

Comparison b/w IBAN and SWIFT/BIC Code

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. IBAN and SWIFT Codes are two renowned methods of verifying bank accounts.

A SWIFT code is typically used to identify the bank during a cross-border transaction. In comparison, the International Bank Account Number (IBAN) helps identify the account holder. What is IBAN? It is a unique code assigned to each bank account, making international payments secure and efficient.

Businesses can register to get a BIC number without registering with a SWIFT network. The BIC (Bank Identifier Code) is another way of identifying a bank when sending money internationally, ensuring the transaction reaches the correct institution.

Difference Between an IBAN Account and a Digital Wallet?

A digital wallet is a financial app that you can use to store your funds online. Digital wallets are helpful for online shopping, money transfers, and gift cards.

A digital wallet helps you in going cashless. This means that you no longer need to carry cash or cards.

Some of the worldwide used digital wallets include:

Apply Pay
Google Pay
Pay Pal
Cash App
Samsung Wallet
Stripe

A digital wallet can help you store money and payment options. Yet, the convenience offered by bank accounts allows you to do more with your money.

With IBAN, you can conveniently transfer money, pay bills, and deposit checks.

Transfer Money from a Digital Wallet to an IBAN

Almost all digital wallets, including TangoPay, allow you to send money to an IBAN, making cross-border transactions fast and secure. Whether you’re paying for services, sending funds to a family member abroad, or conducting business, digital wallets are an easy way to transfer money.

To transfer your funds to a bank account, first, open your digital wallet. Next, locate the option to send money or make a transfer. You will need to enter the International Bank Account Number (IBAN) of the recipient. The IBAN is a unique code that identifies a specific bank account, ensuring the payment reaches the right place. What is IBAN? It is a standardized international code used to identify accounts in banks around the world, making the transfer process smoother and more reliable.

Once you enter the recipient’s IBAN, double-check the details to ensure accuracy. Then, enter the amount you want to send and confirm the transaction. The money will be transferred from your digital wallet to the recipient’s bank account linked to that IBAN.With the help of apps like TangoPay, sending money to an International Bank Account Number is as simple as a few taps on your phone. This method allows you to securely send funds across borders, helping you complete international transactions quickly and with confidence.

TangoPay – Seamless Money Transfer

TangoPay offers a seamless and secure solution for money transfers, ensuring hassle-free transactions with zero fees. Here’s what makes TangoPay the ideal choice for your money transfer needs:

User-Friendly Interface: TangoPay is designed to be simple and intuitive, making it easy for you to send money without any complications. Whether you’re transferring funds to friends, family, or businesses, the app ensures a smooth process.
Send Money to IBANs: With TangoPay, you can easily send money to an International Bank Account Number (IBAN), making cross-border transactions fast and straightforward.
Zero Fees: TangoPay stands out with its zero-fee policy, ensuring you can send money without worrying about additional charges. Enjoy the convenience of making transfers without hidden costs.
Top-Tier Security: TangoPay takes security seriously, implementing advanced encryption and security protocols to ensure your financial data is always safe. You can confidently make transactions knowing your information is protected.
Fast Transfers: Whether you’re sending money locally or internationally, TangoPay ensures quick transfers, often in real-time, so your recipient gets their funds without delay.
24/7 Customer Support: TangoPay provides around-the-clock customer support, so if you encounter any issues, help is always just a click away.

Conclusion

In conclusion, the International Bank Account Number (IBAN) is essential for international transactions. It ensures that your money transfers are safe and easy by providing clear and accurate account details. By understanding how IBAN works, you can send money worldwide without any hassle.

Ready to send money quickly and securely? TangoPay makes it simple with zero fees. Download the app today and start transferring money to any IBAN in just a few clicks!

Frequently Asked Questions

What is the IBAN Number?

IBAN stands for International Bank Account Number. It’s a standardised format used worldwide to identify bank accounts uniquely. The IBAN includes essential information like the country code, bank identifier, branch identifier (if applicable), and the account number itself.

How can I find my IBAN number?

You can find your IBAN number on your bank statement, usually near your account details. It’s also available through online banking platforms, where you can view your account information or by contacting your bank directly.

What is IBAN in a bank account?

The IBAN in a bank account serves as a globally recognised identifier for the specific account. It helps ensure accurate international transactions by providing crucial information about the account and its location.

How do I find my UK IBAN number?

To find your UK IBAN number, you can check your bank statement or log in to your online banking account. It’s typically mentioned alongside your account details. If you’re unable to find it, contact your bank’s customer service. They can provide your IBAN over the phone or via email after verification.