IBAN Code: Definition, How to Check and Differences

Last updated on March 4th, 2025 at 11:15 am

Hello, Easypeople! Have you all heard that one of the key factors in managing cross-border transactions is understanding the IBAN (International Bank Account Number)? Today, we’ll discuss IBAN: what it is, its format, why it’s important, and how it differs from the SWIFT code. Stay tuned!

What is an IBAN Code?

List of contents

1 What is an IBAN Code?
2 IBAN Code Format
3 Advantages of the IBAN Code
4 Difference Between IBAN and SWIFT Code
- 4.1 Does Indonesia Have IBAN?

The IBAN Code stands for International Bank Account Number, which is a globally used code to uniquely identify a bank account.

The IBAN Code consists of an alphanumeric combination that includes key information such as the country code, bank code, bank branch code, and account number. This code is essential for international financial transactions, ensuring that funds are transferred correctly to the intended destination. IBAN Code is especially required for money transfers to countries in Europe and some other regions.

IBAN Code Format

The IBAN Code format varies depending on the country and financial institution. However, generally, the IBAN Code follows a standard format consisting of an alphanumeric combination. Here’s an example of a common format for IBAN Codes:

Country Code + Check Digits + Bank Code + Branch Code + Account Number

Country code (Country Code): Two letters representing the country code according to ISO 3166-1 alpha-2.
Check Digits: (Check Digits)Two numeric digits used to verify the authenticity of the IBAN.
Bank Code (Bank Code): A unique identifier for the recipient’s bank.
Branch Code (Branch Code/Sort Code)Identifies the recipient’s bank branch (if required).
Nomor Rekening (Account Number)The recipient’s bank account number.

The total length of an IBAN Code and the positioning of each component can vary depending on the country. For example, IBAN Codes for European countries typically range from 20 to 34 characters in length.

Advantages of the IBAN Code

The IBAN Code offers several advantages, making it an important standard in international financial transactions:

International Standardization : It is a global standard to facilitate cross-border transactions.
Error Reduction : The inclusion of check digits reduces the risk of errors during the transaction process.
Efficient Automation : Simplifies the automation process within banking systems.
Quick Identification The country code and bank code allow for fast identification of the bank account.
Information Transparency : Combines important information into a single string, making it easy to interpret.
SEPA Compatibility : Works well with the unified payment system in the Eurozone (SEPA).

With these benefits, the IBAN Code helps streamline and optimize the process of international financial transactions, improving accuracy, efficiency, and security.

Read Also: How to Transfer Money Abroad

Difference Between IBAN and SWIFT Code

IBAN (International Bank Account Number) and SWIFT (Society for Worldwide Interbank Financial Telecommunication) Code are two crucial identification systems used in international financial transactions.

IBAN is used to identify individual accounts involved in international transactions, with a format of 22-30 alphanumeric characters that include the country code, bank code, branch code (if applicable), and account number. On the other hand, the SWIFT Code is used to identify a specific bank during international transactions, with an alphanumeric code whose length may vary.

IBAN is primarily used for sending money abroad, especially in countries that use the IBAN system. Meanwhile, the SWIFT Code is used for a wide range of transactions, both financial and non-financial, around the world. The use of IBAN is more common in European countries, while the SWIFT Code is widely used globally.

Essentially, IBAN focuses on identifying individual accounts, while the SWIFT Code is more related to identifying the bank or financial institution in international transactions. Both systems play a crucial role in ensuring smooth and secure global financial transactions.

Does Indonesia Have IBAN?

No, Indonesia does not use the IBAN (International Bank Account Number) as a system for identifying bank accounts. IBAN is more commonly used in most European countries and some other countries outside Europe.

In Indonesia, the system for identifying bank accounts typically uses various internal identification methods issued by banks and national financial authorities. One common form of identification is the bank code (usually a four-digit code) and the national account number provided by the bank to account holders.

So, if you’re making transactions to or from Indonesia, you won’t need to use IBAN. Instead, you’ll use the identification system that is generally applied within the country.