Corporate & Institutional
International Bank Account Number - IBAN
The European Union Banking community has made considerable progress consolidating the various infrastructures that support payments across all European Union countries. First, a single currency, the Euro was introduced, replacing individual currencies such as the Deutsche Mark and the French Franc. Now, progress continues with the consolidation of payment platforms used in each Euro country into a Pan-European payment system. As part of this integration effort a single account structure to identify account owners within the European Union has been adopted. This account structure is commonly known as an International Bank Account Number or IBAN.
If your organization conducts business with corporations located in the European Union (EU), you may have already been asked to remit payment for goods and services to their banking provider, and were supplied a term called an IBAN to direct the payment to your counterparty.

If your account is housed at PNC in the U.S. and you are making a payment to a supplier who owns an account at a financial institution located in the European Economic Area, then you are not obligated to supply an IBAN as part of the remittance information of the wire transfer. However, asking your beneficiary for their IBAN and using it in your funds transfer instruction will help to avoid posting delays or delays in notification of receipt at the receiving financial institution.

The following set of Frequently Asked Questions is designed to:

  • Outline the goals and purpose of the IBAN
  • Describe its impact to you as a payment remitter

Q. What is an IBAN?
A. IBAN stands for International Bank Account Number. It is assigned to account owners of banks within the European Union and serves as an account identifier. The IBAN identifies a beneficiary's bank account and includes specific information the receiving bank will use to automatically apply funds. The IBAN is used exclusively within the European Economic Area. All banks within this region have been mandated to assign and issue an IBAN to uniquely identify their respective clients. This is being driven by the larger objective of the Single European Payment Area (SEPA) to address cross-border payments in the European Union. Banks outside of the European Union have not adopted this standard and are not obligated to issue IBAN numbers to their clients.

Q. Why was the IBAN introduced?
A. The IBAN was conceived by the European Committee for Banking Standards and introduced to increase the rate of straight-through processing (STP) and lower the cost of financial messages and transactions between financial institutions within the European Union in order to:

  • Consolidate distinct currencies into a single base currency (EURO).
  • Facilitate the formation of a Single European Payment Area (SEPA).
  • Enable the integration of multiple low value payment systems utilized in various European Economic Area countries.

Q. When is an IBAN used?
A. An IBAN is used to identify a beneficiary of a payment where the beneficiary's account is housed at a financial institution within the European Economic Area. It is used in combination with the European Bank's SWIFT Bank Identifier Code (BIC) to properly route and apply funds.
An IBAN must be supplied when the following payment conditions apply:

  • A payment denominated in Euro originates from a party that owns an account with a European Union financial institution, and
  • The payment will settle to a counter party?s account with a European Union Financial Institution.

Q. Who will be required to use IBANs?
A. The requirement is mandated for payment origination that is cross border in the European Economic Area. Payments originating outside this region, in areas such as North America or Asia, are not mandated to include an IBAN.

Q. Will IBANs be issued in the United States?
A. Account owners of U.S. Dollar denominated or Multicurrency Demand Deposit Accounts domiciled within the U.S. will not be assigned an IBAN as they are not assigned nor required outside of the European Union.
While not required, it is recommended that you provide an IBAN, along with your payment instructions, to PNC when making payments into Europe from your PNC Account. The IBAN may be supplied by your counter party for example on an invoice.

If you would like further information regarding IBANs, please visit the following resources:

Click here to review the PNC General Disclosure.