Initiatives such as SEPA (Single Euro Payments Area) and the move to global standardisation using ISO2022 XML have led to the adoption of the International Bank Account Number (IBAN).
Here are five things you might not know about the IBAN:
1. There is more to an IBAN than an account number
The IBAN is an ISO standard for representing bank, branch codes and account numbers in a form which is standard across countries. This is what a typical IBAN looks like:
the IBAN consists of an ISO country code which specifies where the account is located and two check digits which help to identify transcription errors, the remaining information varies by country but includes an indicator of whether alphabetic characters may be used, the length of the IBAN and account information such as bank code and account number.
2. We won’t be running out of IBANs!
With so many characters making up an IBAN there are virtually limitless possible combinations. While the format of an IBAN is standard, country specific aspects aren’t standardised; for example IBANs vary in length from 15 characters up to 32 and as previously mentioned some will include alphabetic characters while others won’t.
3. Malta is currently the country that uses the most characters in its IBAN – 31.
A typical Maltese IBAN account number would look like:
MT84 MALT 0110 0001 2345 MTLC AST0 01S
It is very closely followed by Jordan and Qatar – both countries have 30 and 29 characters in their IBAN respectively. Interestingly – the shortest IBAN codes are in Norway – just 15 characters.
4. IBAN has replaced all account numbers in the euro zone
This is true, and in many countries, IBAN has now effectively replaced domestic bank account data, such as account number and sort code. However, other countries, like the UK, have kept their original bank account number systems as well as introducing the IBAN formatting in parallel.
5. IBAN conversion is not just for banks to worry about
A number of countries have adopted IBAN, including, with the advent of SEPA, the whole euro zone for ACH transactions in euros. Many other countries are seeing the benefits of using a single format for all their payments data. In the meantime some corporates are independently standardising their payments function on IBAN, frequently as part of a migration to the ISO20022 XML format for their payment files or to standardise the way account information is held in their business applications.
Learn more about bank account data validation and conversion clicking here and downloading your free copy of Does Valid Bank Account Data Matter?