Why account formats differ
Every country built its domestic banking system on its own terms long before cross-border payments became routine. The result is a patchwork. The UK identifies a branch by a six-digit sort code. The United States uses a nine-digit routing number. Canada combines an institution number with a branch transit number. Much of Europe, and many countries beyond it, adopted the IBAN to give accounts a single international format.
When you pay internationally, you need to supply the details in the form the beneficiary's bank expects, plus a way for the international network to find that bank. That usually means an account identifier and a bank identifier together. Getting either wrong can send the payment back, or in the worst case to the wrong account.
How an IBAN is built
The International Bank Account Number is defined by an ISO standard. It identifies a specific account at a specific institution in a specific country. It does not by itself identify the bank on the SWIFT network, although the bank code is usually embedded inside it.
Every IBAN has the same opening structure:
- Country code. Two letters for the country where the account is held, such as DE for Germany, GB for the United Kingdom or CY for Cyprus.
- Check digits. Two digits calculated from the rest of the IBAN. They let software detect most typing errors before a payment is sent.
- Basic Bank Account Number (BBAN). The domestic part, which varies by country. It usually includes a bank code, often a branch code, and the account number.
The total length is fixed for each country but differs between countries. A German IBAN is 22 characters. A UK IBAN is also 22 characters. Some countries use longer formats of up to 34 characters. When printed, IBANs are often split into groups of four for readability, but the spaces are not part of the number and should be left out when you enter it electronically.
Here is an illustrative structure for a UK IBAN, using made-up digits: GB, then two check digits, then a four-letter bank code, then the six-digit sort code, then the eight-digit account number. So the sort code and account number a UK supplier gives you for domestic payments are both inside their IBAN.
What the check digits do and do not prove
The check digits are calculated using a modulo 97 algorithm. If one digit is mistyped, or two adjacent digits are swapped, the calculation almost always fails and a validation tool will reject the IBAN. That catches a large share of keying errors before they cost anything.
A valid IBAN only proves the number is well formed. It does not prove that the account exists, that it is open, or that it belongs to the person you intend to pay. A fraudster's IBAN is perfectly valid. So is a real IBAN that belongs to a different company. Passing a format check should never replace confirming the details with the beneficiary through a trusted channel.
What a BIC is
The Business Identifier Code, often still called a SWIFT code, identifies a financial institution. It is 8 or 11 characters long.
- Four letters identifying the institution.
- Two letters for the country.
- Two characters for the location.
- An optional three-character branch code. Where it is left off, or written as XXX, it refers to the institution's primary office.
The BIC tells the network which bank to send the message to. The IBAN or account number tells that bank which account to credit. For SEPA payments within Europe, the IBAN alone is generally enough because the bank can be derived from it. For SWIFT wires, you should always give both.
A common mistake is to use a BIC that belongs to the right bank but the wrong entity. Large banking groups have separate BICs for different countries and sometimes for different legal entities in the same country. Use the BIC the beneficiary's bank gives for incoming international payments, which is often printed on their account statements.
United Kingdom: sort code and account number
Domestic UK payments use a six-digit sort code, usually written in three pairs such as 12-34-56, and an eight-digit account number. The sort code identifies the bank and branch. Some older accounts have numbers shorter than eight digits, and the bank will tell the customer how to pad them.
For an international payment to a UK account, provide the IBAN and BIC. If the beneficiary has given you only a sort code and account number, ask them for the IBAN rather than trying to construct it yourself. UK banks also run Confirmation of Payee for domestic payments, which checks the name against the account before a payment is sent. That service applies to domestic transfers within the UK, so an incoming international wire will not have had the same check, which makes it all the more important to get the name right.
United States: ABA routing and account number
US banks are identified domestically by a nine-digit ABA routing number, sometimes called a routing transit number. The last digit is a check digit. Account numbers vary in length from bank to bank and have no national format.
The detail that trips people up is that a bank can have different routing numbers for different purposes. The routing number printed on a cheque, used for ACH transfers, is not always the same as the one for incoming domestic wires. For an international payment you also need the bank's BIC, and the beneficiary's bank may ask that wires come in through a specific correspondent. Ask the beneficiary for their bank's international wire instructions as a single document. It saves guesswork.
The United States does not use IBANs. If a payment form insists on an IBAN for a US beneficiary, the account number goes in that field, and the routing number and BIC are supplied separately.
Canada: institution, transit and account numbers
Canadian accounts are identified by three numbers:
- A three-digit institution number identifying the bank.
- A five-digit branch transit number identifying the branch.
- An account number, usually seven to twelve digits depending on the bank.
For electronic payments these are sometimes combined into a routing format that starts with a zero, followed by the institution number and the transit number. On a cheque, the transit and institution numbers appear in the opposite order. Mixing up the formats is a frequent error for payers outside Canada.
Canada does not use IBANs either. An international wire to a Canadian account needs the beneficiary bank's BIC, the institution and transit numbers, and the account number. Some Canadian banks also ask that the transit and institution numbers appear in a specific field of the payment message. The beneficiary's bank can confirm what it wants.
Other formats you will meet
Beyond these, a few other patterns come up often in business payments.
- Australia uses a six-digit BSB number with the account number.
- India uses an IFSC code to identify the branch.
- Hong Kong uses a three-digit bank code, a three-digit branch code and the account number, with no IBAN.
- Mainland China accounts do not use IBANs. Some payments need the bank's CNAPS code, and beneficiary names are often required in the exact form registered with the bank.
Where you are not sure of a format, ask the beneficiary for a bank letter or a screenshot of their account details page from online banking. A clear source document is worth more than a list of numbers typed into an email.
Common errors and how to avoid them
In operations, the same handful of mistakes account for most problems with bank details.
- Name mismatch. Paying "ABC Trading" when the account is held by "ABC Trading Company Limited". Many banks will reject or query this.
- Wrong BIC for the country or entity. The payment reaches the right banking group in the wrong place.
- Constructed IBANs. Building an IBAN from a sort code and account number with an online tool. It may validate and still be wrong for that account.
- Currency mismatch. Sending dollars to an account that only holds euros, triggering a conversion at the receiving bank's rate.
- Stale details. Paying to an account the supplier closed after changing banks.
- Unverified changes. Accepting new bank details by email without a call to a known contact. This is the core of most invoice redirection fraud.
Good practice is simple: collect bank details once, from a document, verify them by phone with a known contact, store them in one place, and treat any change as a new beneficiary that needs the same checks. The guide to payment returns and recalls explains what happens when details are wrong.
Managing beneficiary records over time
Bank details are not a one-time task. Suppliers change banks, companies merge, accounts are closed and banking groups reorganise their identifiers. A beneficiary list that was accurate two years ago will have errors in it today.
- Keep a single master record for each beneficiary, with the source document attached and the date the details were last confirmed.
- Record who verified the details and how, for example by a call to a named contact on a number taken from an earlier contract.
- Deactivate beneficiaries you no longer pay. A dormant record is one more thing that can be edited without anyone noticing.
- Review returned payments for patterns. Two returns from the same bank in a month may mean the bank has changed its identifier or routing instructions.
- Limit who can edit records and log every change, so that a quiet alteration of an account number is visible afterwards.
None of this needs special software. A disciplined process around a shared, access-controlled list catches most problems before they reach a payment.
General information
This article is general information about account and bank identifiers and is not legal or regulatory advice. Formats are set by national banking authorities and can change. If you are setting up beneficiaries for regular wires, the CCYFX onboarding page explains what we ask for and why.
