What is an IBAN?
IBAN is an abbreviation and stands for "International Bank Account Number". It uniquely identifies an account with a bank and has been obligatory for payments within Germany and the Single Euro Payments Area (SEPA) since 1 February 2016.
IBAN replaces the previous account number and was introduced to standardize and simplify payment transactions between countries. The new rules apply to domestic and cross-border SEPA credit transfers and direct debits in euros.
Bank transfer was carried out using the account number and bank sort code (BLZ) before the IBAN implementation. In contrast, IBAN offers a decisive advantage: due to the check digit included, input errors and number twists can be recognized during input and reacted to accordingly.
IBAN and BIC international bank codes accelerate the transfer of funds via SEPA and provide enhanced security. Validation of check digits can significantly reduce the problems caused by incorrect account numbers. The global standard for payment orders helps to determine whether the bank account information is correct before it is transferred. This avoids errors and accelerates the transfer of funds.