Both old fashioned and modern online banks use phrase IBAN. What exactly is it? Here’s a short explanation.
Abbreviation IBAN stands for international bank account number, it’s a mandatory international account number format. It helps to deposit transferred money into recipients account. This format is used in whole European Union both in international and local money transfers.
IBAN’s history started in 1997 after account number standard ISO 13616:1997 was approved. It is a XXI century’s standard for account format both in developed and developing markets.
So how does it work? Everything’s quite simple, actually. If you are expecting money from abroad, you have to give sender your IBAN bank account number, which is used in case of international transactions. Therefore, having an IBAN number means that its owner can receive money from all the countries of the world, which use IBAN numbering system. Currently there are 69 of those.
IBAN is defined by certain rules, which can not change. For example, IBAN number would be wrong if there would be no country code ie LT, LV, GB, etc. in its beginning. Those first two symbols help international banking systems to define where to transfer money and check if account number is correct. All IBAN numbers are unique.
IBAN is the main identification in international transactions. It means that international banking systems identify receivers only by that number. Therefore, if you are transferring money, you can make a mistake while typing receiver’s name or surname. But no mistake can be made while giving an IBAN number.
If you open a payment account in MisterTango, you will also get a European IBAN number for international and local transactions, just as in your regular bricks and mortar bank. Oh, and did we mention that you can do it in 5 minutes? That is way faster than in regular bank and everything’s done online!