What is an IBAN? — International Bank Account Number Explained
Definition
IBAN (International Bank Account Number) is an internationally agreed system of identifying bank accounts across national borders to facilitate the communication and processing of cross-border transactions. It was originally adopted by European banks and is now used in over 80 countries. An IBAN starts with a two-letter country code, followed by two check digits, and then the country-specific Basic Bank Account Number (BBAN) containing bank and account identifiers.
How It Works
An IBAN is up to 34 alphanumeric characters, though length varies by country (UK IBANs are 22 characters, German IBANs are 22 characters, French are 27). The check digits are calculated using MOD-97 arithmetic: move the country code and check digits to the end, replace letters with numbers (A=10, B=11, ..., Z=35), and compute the number modulo 97. A valid IBAN gives a result of 1. The BBAN portion contains the bank sort code, branch code, and account number in a country-specific format. In print, IBANs are often grouped in blocks of 4 for readability.
Common Use Cases
- ▸International wire transfers and SEPA credit transfers in Europe
- ▸Receiving payments from foreign customers in e-commerce and freelancing
- ▸Setting up direct debit mandates for cross-border subscriptions
- ▸Validating bank account data in payment processing applications
- ▸Generating test IBANs for payment integration development and testing
Example
German IBAN: DE89 3704 0044 0532 0130 00 │ │ │ │ └ bank code (37040044) │ └ account number (0532013000) └ country code + check digits (DE89) Check validation: MOD-97 of numeric representation = 1
Related Tools
FAQ
- What is the difference between IBAN and SWIFT/BIC?
- An IBAN identifies the specific bank account. A SWIFT code (also called BIC — Bank Identifier Code) identifies the specific bank and branch. International transfers typically require both: the IBAN for the account number and the SWIFT/BIC for routing to the correct bank.
- Are IBANs used in the United States?
- No. The US and Canada do not use IBANs. US international transfers use ABA routing numbers and account numbers along with SWIFT codes. When making transfers to/from US accounts, the sending bank handles the conversion between routing formats.
- What are the check digits in an IBAN for?
- The two check digits (positions 3-4) provide a basic integrity check using MOD-97 arithmetic. They catch common data entry errors like transposed digits. The check is not cryptographic — it catches accidental mistakes, not deliberate fraud.