An IBAN code is an internationally-recognized system of bank accounts, which has been accepted to reduce the risks involved during money transfers.
IBAN code and codes in various banks are not only used to recognize the branch of the bank and reduce risks involved during money transfers, but are also used by banks to initiate communication for cross-border transactions.
An IBAN code is a thirty-four-digit code, which consists of alphanumeric characters. These alphanumeric characters in the code are used to recognize the bank, the domestic bank, the location codes, etc. for the bank. An example of an IBAN code- GB15MIDL40051512345678.
The IBAN code also consists of check digits or check codes, which allow to check the integrity of the code or account before the transfer has been made.
These codes find their use in payments made across the world but are more common in the European Union (EU). IBAN codes can be used by anyone who wishes to make a payment or receive a payment across the world. However, if one does not quote an IBAN code for payments initiated in the EU, the person may need to pay extra fees.
An individual should give his/her IBAN details as required to make payments, and businesses should state their IBAN details on all of their invoices to avoid the payment of extra fees, and to improve the efficiency of their business.
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