IBAN: Its Function and Use in P2P Transactions

Understanding IBAN and Its Application in Peer-to-Peer Payments

The International Bank Account Number, known as IBAN, is a globally standardized system for identifying bank accounts. This system facilitates secure and efficient monetary transfers between financial entities and countries. Since 2019, Ukraine has adopted IBAN as a mandatory standard, significantly simplifying national and international banking operations.

Structure and Composition of the IBAN

A typical IBAN consists of 29 characters that encode essential data about the banking entity and the account holder. Its structure is broken down as follows:

• Country code (, for example, UA for Ukraine)
• Control digits to prevent input errors
• Identifier code of the receiving bank
• Unique account number at the specific banking institution

For illustration, a Ukrainian IBAN could be presented as follows: UA9876543210987654321098765432.

Generation of IBAN for Individuals and Companies

The creation of an IBAN involves the use of specific codes:

• For individuals, a 10-digit code similar to the old NIF is used.
• For legal entities, an 8-digit code comparable to the CIF is used.

These identifiers ensure the uniqueness of the customer and the correct receipt of funds.

Procedure for Making P2P Transfers with IBAN

Peer-to-peer transactions (P2P) allow for the direct movement of money between individual accounts. Here is a guide to carry out this type of operation using the IBAN:

1. Obtain the recipient's IBAN, usually available in the banking app or directly from the beneficiary.

2. Meticulously verify the accuracy of the entered IBAN, as a single mistake could result in an incorrect transfer.

3. Specify the purpose of the transaction, which helps the bank to appropriately categorize the operation.

4. Make the payment through the chosen banking platform, whether mobile or ATM.

Benefits of the IBAN System

The implementation of the IBAN has brought various advantages:

Enhanced security: The IBAN structure minimizes the possibility of errors in transfers.

Fast processing: In online mode, transactions are usually completed within an hour.

Operating Hours: IBAN transactions are available from 01:30 to 22:30, including weekends.

Troubleshooting Transfers

If a transaction does not reflect immediately, it is advisable to wait until the end of the banking day. If the issue persists, it is recommended to contact your financial institution's customer service.

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