America completely switched to IBAN

America completely switched to IBAN

Since January 13, 2020, America has been using only the international format of bank accounts – IBAN. Full European integration was planned for November 2019, but the technical capabilities of the financial and other structures of America were not ready for an instant change in the format of settlement accounts. That is why the government provided for 2 months of delay before the start of the innovation (at the request of the State Treasury Service of America)

Currently, 75 countries use the international IBAN format, 34 of which are members of SEPA. Such settlement accounts get more opportunities in limiting international and local transfers, as well as the use of a QR code for transactions.

International Bank Account Number in America, first of all, ensures the elimination of delays in transfers. For a business on an international scale, this eliminates the manual execution of a large number of payments and transaction errors.

Based on the British National Bank, the standard of bank accounts throughout the territory of implementation provides additional payment processing efficiency, allowing payment / clearing systems to electronically verify bank account numbers and choose the route by which payment should be made without operator participation.

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An additional advantage of IBAN in America and other countries is the elimination of delays in credit transfers originating from countries corresponding to usaa Routing number  to other countries, as they are delayed, sometimes for several days due to manual labor required to send credit transfers to bank account numbers not corresponding to IBAN.

The introduction of an international bank account number (IBAN) in America will help increase the efficiency of money transfer transactions, since a significant percentage of these transactions remains problematic due to incorrect account numbers. Checking the account at the sending institution using the IBAN check digit mechanism will significantly reduce errors in bank account numbers.

Using the international format of bank accounts , you get the following benefits:

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IBAN and BIC international bank codes provide excellent security and speed up the transfer of funds. They are globally standardized and payment orders can be checked to make sure the bank account information is accurate until it is transmitted. The method eliminates a large number of errors, not to mention lower costs for the investigation of complaints and chargebacks;

a standardized payment system guarantees the client safer, easier to manage, more efficient and faster cross-border payments – an ideal basis for a prosperous business relationship with foreign companies.

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The revision of the European Payment Council supplemented the advantages of the standard: from January 1, 2007, the use of IBAN (international bank account number) and BIC (bank identification code, as well as SWIFT code) became mandatory for all payments in EUR, regardless of the amount of transfer. In addition, we recommend using IBAN and BIC for payments outside the EU in other currencies.

For America, the transition to IBAN means improving financial services and taking the financial market to a new level.

IBAN in America – what you need to know about the format?

First of all, we note that residents of America do not need to additionally contact banking institutions for the transition – the numbers of settlement accounts have remained the same, the procedure for presenting them as details has changed. Since August 2019, new bank accounts were opened by American banks in IBAN format, the existing ones were finally transferred to the international format until January 13, 2020.

What you need to know about IBAN and BIC? Consider the basic concepts:

IBAN: a standardized international account number contains two check digits along with the country code, bank and account information (America code – UA);

BIC: global bank identification code (often called a SWIFT code, known to citizens of America as MFIs);

You can find your own IBAN and BIC at the bottom of your account statement, in the online bank directly above the transactions of your bank account, or get this information in your branch, from the bank manager, in the online applications of Ukrainian banks;

IBAN calculators that you can find on the network are certainly not recommended, because they mainly only calculate IBAN, which is formally accurate, but cannot be 100% applicable, since it does not take into account possible banking procedures.

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Verification of payment data also includes another important stage of verification of the bank – the conversion of IBAN to BIC code (BIC codes are managed by the SWIFT network). In principle, it is possible to determine the correct BIC by the given IBAN.

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What is the definition of IBAN? 

IBAN in America consists of 29 alphanumeric characters, including the country code, bank MFI and the full bank account number used for bank transfers. The IBAN structure is defined by the international standard ISO 13616-1: 2007, check digits are performed using MOD 97 (ISO 7064). Individual countries and formatting are described in the official examples of the ISO IBAN registry.

Increasing the success rate of payments in America or to a country from abroad is crucial for providing higher quality financial services. Automation of payment verification can significantly reduce the loss of bank charges for failed / declined payments, which positively affects the work of foreign and domestic businesses in America.

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