IBAN (International Bank Account Number)
An IBAN is a standardised international numbering system typically used to identify bank accounts across Europe. It simplifies cross-border payments by ensuring accurate routing of funds. EMI electronic money accounts can be created in a range of IBANs in order to optimise their acceptance and counter potential biases and restrictions in systems that penalise payments from specific regions. Within SEPA, an IBAN is always required regardless of the payment currency, however you do not need to include a BIC (Business Identifier Code) when making payments to countries within the SEPA region. A large and growing number of countries outside Europe also require IBAN usage or prefer it to the local alternative or Basic Bank Account Number (BBAN) as it is sometimes known. This can vary for each country but typically includes the domestic bank code, branch identifier, and account number – sometimes these countries may require a BIC as well.
Applications
E-commerce:
Reduces fraud in online card payments by verifying the cardholder's identity
E-commerce:
Reduces fraud in online card payments by verifying the cardholder's identity
Advantages
- Enhanced security: Reduces unauthorised transactions by verifying that the genuine account holder is authorising the payment
- Enhanced security: Reduces unauthorised transactions by verifying that the genuine account holder is authorising the payment
Challenges
- User Experience: Additional authentication steps can cause friction and increase checkout abandonment
- User Experience: Additional authentication steps can cause friction and increase checkout abandonment
