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What is IBAN

The term IBAN, short for International Bank Account Number, refers to a globally recognised standard for identifying bank accounts.

IBAN definition

IBAN, or International Bank Account Number, is a standardised alphanumeric code assigned to a specific bank account. It serves as a unique identifier when conducting international transactions, streamlining the process of transferring funds across borders. Essentially, if you’re engaging in cross-border transactions, having an IBAN is a prerequisite.

Using IBAN and BIC

In the realm of international transactions, both the IBAN and the Bank Identifier Code (BIC) or SWIFT code are commonly required. While the BIC (Bank Identifier Code) or SWIFT code is utilised to identify a specific bank in global transfers, the IBAN is exclusively employed for bank transfers. It’s essential to recognize that the BIC (or SWIFT) code has a broader application and is necessary for various international financial dealings.

Finding IBAN

When making payments to an IBAN, there is flexibility in transferring funds either in the recipient’s currency or converting them to Australian dollars. This flexibility is particularly useful when dealing with invoices received in foreign currencies like EURO. However, when opting to pay in Australian dollars, it’s crucial to consider potential currency differences.