With the rise of the gig economy and digital nomad lifestyle, accessible, fast and secure cross-border payments have become a vital part of the financial services offerings provided by traditional and digital banks. To make sure that international transactions meet the growing user demands, banks need a unified bank account identification system that accelerates payment processing by reducing the risk of transaction errors and data transmission details. It is for that purpose that the International Organisation for Standardisation (ISO) developed the IBAN system, which is now adopted in more than 70 countries around the world. This article reveals what an IBAN is, who can open an IBAN account and how to do it online from anywhere.
IBAN, or International Bank Account Number, is a unique code assigned to your account to verify transaction details before sending funds to a foreign bank. It contains up to 34 letters and digits and consists of several sections, each conveying important information about your account to banks:
Made up of these pieces of data, an IBAN is used exclusively for cross-border transfers, allowing overseas banks to identify both the sender’s and recipient’s accounts and ensure smooth, quick and secure delivery of funds without errors or delays. How does it work? When you try to send money internationally, the bank’s payment system processes your IBAN and that of the recipient, checking the letters and digits against its database. If there’s a match, the system confirms the transaction, and funds are transferred between accounts.
Although the IBAN system was initially designed to simplify payments between banks in the Eurozone, it has been eventually adopted in more than 70 countries around the globe. Whereas it is not always required for domestic money transfers, an IBAN is a must-have for international transactions between countries that support the system. With digital technology taking over the world, you can now skip the trip to a branch and open your IBAN account online. Or can you not? Let’s figure out who can open a virtual IBAN account in Europe.
Overall, online IBAN accounts are available to both residents and non-residents of European countries, but account providers may impose certain eligibility requirements for their customers. For example, apart from your ID, you may be requested to provide proof of address (your rental contract or utility bills), your residence permit and even your local tax number. These criteria deprive non-residents of the opportunity to open an IBAN account, but there is a way out. Some fintech companies offer solutions tailored to non-residents. However, they may charge unfairly high fees for money transfers or account maintenance, so it’s worth taking a closer look at the fee structure to avoid getting into trouble. Yet, this option can work for a non-resident, until they obtain residency in their new country.
If you don’t fancy wasting your time in the queue at the bank branch, follow these simple steps to open your online IBAN account.
We can safely say that an IBAN account is offered by all banks in Europe plus a variety of neobanks and fintech companies. And this is good news for you as you have a wide range of options to choose from. Explore and compare the available offers paying extra attention to the documents required for Know Your Customer (KYC) verification, account maintenance and money transfer fees, a minimum opening deposit, and bonuses and benefits for new customers. If you intend to skip the bank offices as much as possible or even consider just digital-only solutions, choose a few providers and try contacting their customer support to make sure it is accessible and responsive.
Once you’ve decided on a provider, download their mobile app and sign up. Typically, you are required to enter your email address or phone number and then confirm it using a verification code that will be sent to you via email or SMS. After that, you will be asked to set a password and create a PIN to quickly log into the app. You can also enable facial or fingerprint recognition for additional protection, if available.
At the next stage, you should provide the required personal data and documents to open an IBAN account. Carefully check the accuracy of all the information you enter – it is crucial when it comes to financial services with your money involved. In addition, typos and incorrect data may result in your application being rejected. Have your EU valid ID, proof of address and any other documents ready, and take high-quality photos in good lighting so that the information could be easily read. Submit everything for review and for a decision. This process usually takes a few minutes.
KYC is the important process of verifying the customer’s identity when opening an account with a financial institution. It aims to combat money laundering, tax evasion and other serious financial crimes. Sometimes a customer may not pass the KYC check at the first attempt due to incorrect data or poor-quality photos of documents. If your KYC has been rejected, be patient and try again. As long as your documents are in order, you will succeed.
Hurrah, you have passed KYC verification, and your IBAN account has been opened! All that remains is to top it up via a direct deposit, bank transfer or debit card. After that, you can send money to any country that uses IBANs and receive transfers from your family, friends or customers. You can also open a virtual or physical debit card linked to your IBAN account and start making purchases online and in stores.
With CFPS, you can open an IBAN account online in just a few minutes. All you need is a valid EU identity document, such as a passport or residence permit, and proof of address in a European country. We don’t charge fees for account maintenance and transfers between CFPS users. With your CFPS account, you can quickly send money to and receive it from any accounts in the Eurozone and beyond via SEPA and SWIFT. Plus, you can open free virtual and physical Mastercard debit cards linked to your IBAN account and use them to shop online and in-store.
An IBAN, short for International Bank Account Number, is a unique set of letters and digits assigned to your account for overseas banks to identify it when you make cross-border transactions. IBAN contains data about your bank location and account number that facilitates the verification process and enables quick and secure international payments.
Depending on your account provider, you can find your IBAN on your debit card, at the top of your bank statement or in your banking app with your other account details. Alternatively, you can request your IBAN directly at your bank.
Today many banks give their customers an opportunity to open an IBAN account online without queues and excessive paperwork. In the CFPS all-in-one money app, the IBAN account opening process takes just a few minutes and requires only two documents to complete KYC verification.
The IBAN system has been specifically designed to deliver international transfers reliably and securely, with minimal errors and delays in the process. IBANs can only be used for transfers between accounts, not for withdrawing cash or making purchases.
An IBAN and a SWIFT code convey different information. A SWIFT code is used to identify the bank and its branch during an international transfer, while an IBAN identifies a sender’s or recipient’s individual account. The SWIFT code is required for making overseas transactions outside Europe, whereas IBANs can be used for both domestic and international payments.
Even though the IBAN system has been widely implemented around the world, it is not yet used, for example, in the USA, New Zealand, Indonesia, Japan and other countries. To send money to a non-IBAN country, you should indicate the bank account number in the national format adopted there.
International transfers using IBANs can take between one and five business days depending on the system used (e. g. SWIFT or SEPA). In certain cases, money can be transferred immediately after the confirmation, for example, if both sender and recipient’s accounts are SEPA Instant Credit registered.