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International Bank Account Number - Explained

What is an International Bank Account Number?

Written by Jason Gordon

Updated at April 17th, 2022

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Table of Contents

What is an International Bank Account Number?How Do International Bank Account Numbers Work?

What is an International Bank Account Number?

An IBAN or International Bank Account Number is necessary to identify your bank account if you wish to send money to a foreign country within the EU. But what is an IBAN? The European Banking System developed the IBAN as a standard way of numbering and identifying bank accounts from other countries.

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How Do International Bank Account Numbers Work?

Contrary to what most people believe, having an IBAN does not mean that the code replaces the bank account number given by your banking institution. In fact, an IBAN simply offers a way for other people to identify payment and payment sources that are made from a foreign country. The IBAN has a certain format that is characterized by a two-letter country code followed by two check digits. It then has alphanumeric characters that can be as long as 30 characters. These 30 characters after the check digits is known as the Basic Bank Account Number (BBAN). The BBAN is unique to each country as the banking system in a country chooses the BBAN that they use for their bank accounts. It is, however, worth noting that the IBAN standard is mostly used in European countries but its popularity has been on the rise. Some examples of countries that use the IBAN system include:

  • Albania: AL35202111090000000001234567
  • Cyprus: CY21002001950000357001234567
  • Kuwait: KW81CBKU0000000000001234560101
  • Luxembourg: LU120010001234567891
  • Norway: NO8330001234567

One of the main reasons for the formation of the IBAN standard is the different standards of identifying bank accounts in each country. Since there are different variation in account numbers, routing codes, bank branches and even codes that represents the banks, it was easy to misinterpret as well as omit information when processing payments. The need to integrate al this information brought about the need for the IBAN. Following these logistical challenges, the International Organization for Standardization published the ISO 13616:1997 in 1997 to align the process. While this was the start of developing the IBAN, the European Committee for Banking Standards believed that it was impossible to work with the 1997 ISO version. This made them publish a smaller version that was later replaced by ISO 13616:2003. However, the current ISO standards were revised in 2007. It mainly provided that IBAN elements should be uniform to allow data processing in finance as well as other industries. These revised standard did not outline how internal procedures such as file organization, language and media storage should be conducted.

international bank account number iban

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