What are IBAN accounts?
IBAN or International Bank Account Number is basically having a global bank account. It is created internationally to identify the bank accounts across national borders and overseas countries. This is an important account because whenever you make an international payment, it is compulsory to have the IBAN. It contains both a bank account number and an identification code for the bank itself. As a matter of fact, IBAN is a unique code that easily identifies a beneficiary’s bank account for the purpose, round the globe. It is not a new account number, only an upgraded version of the digital system of your current account.
The IBAN consists of an alphabetical country code, which is followed by two digits, and then up to 35 characters of the bank account number. An IBAN is used to uniquely and properly identify or recognize a customer’s bank account across the world. Today, more than 54 countries are using IBAN accounts and mostly the counties of the European Union, UAE, Kuwait, Saudi Arabia, Germany, and more are the participants.
Significant Features of using IBAN accounts
• An IBAN is a Straight Through Processing or STP of Electronic Payments system. This system minimizes delays and extra costs related to account numbers.
• The implementation of IBAN will bring more efficiency in the process of remittance-related transactions. It serves to cut the risk of transcription errors.
• The IBAN accounts facilitate with quicker processing of your fund’s transfer.
• Normally, banks are required an accurate IBAN at the time of a fund transfer and they check only the IBAN is correct or not to make the funds transfer. This establishes the operation of funds transfers from one place of the world to another easier as well as more immediate. It is used for sending and receiving both local and international funds transfers.
• You don’t have to pay any additional charge while using IBAN, only you have to pay normal transaction processing fees.
• Now, it is easier for IBAN customers to perform their fund transfers because of the online banking facility. It reduces the monetary value and enhances operational efficiency.
The Purpose of using International Bank Account Number or IBAN accounts
International Bank Account Number is essential for the purpose of receiving as well as sending an electronic payment from the bank. You can receive and send an electronic payment internationally or overseas and also locally when you have a correct and accurate IBAN. If you want to send electronic payment through IBAN to another country, it is possible only when that country has adopted the IBAN facility. This means both the parties must have the International Bank Account Number or IBAN accounts to have successful fund transfer transactions.
The consequence of using improper IBAN
Due to any error or misunderstanding, you have given incorrect and forget to give the IBAN information, a certain amount of charge is applied by the receiving bank and your IMT may be rejected. The amount of charge will be deducted from your payment or else chargeback. Thus, always check your IBAN properly before making a fund transfer transaction. If you wish to have an IBAN account, then go for it because it is easy to create and also a great help for fund transfer across the world smoothly.