What are main advantages of IBAN vs SWIFT?

[rainy]

What are main advantages of a bank account with IBAN versus a one with SWIFT + account number?

 

[Sols]

For non-SEPA transactions, there is no difference between SWIFT + IBAN and SWIFT + account number. Other than that it's slightly more difficult to have a typo in an IBAN if you are using a bank/financial institution that performs IBAN validation.

The benefit of IBAN is if you transact within SEPA (Single Euro Payments Area). Transactions within SEPA are almost always faster and cheaper than SWIFT, in some cases free and/or instant.

 

[troubled soul]

SWIFT CODES​

SWIFT codes are also known as SWIFT BICs – you’ll need one if you’re sending or receiving money internationally.

IBAN​

If you’re sending or receiving money from Europe and a few other territories, you’ll also need an IBAN.

Routing Number​

If you’re sending or receiving money from the US you’ll need a routing number rather than an IBAN, but will still need a SWIFT code.

Description	Where you can find it	Example
SWIFT	A SWIFT number is an alphanumeric number containing information that identifies a bank and branch. It can be eight or 11 characters long, depending on which bank office it refers to.	Bank statement, Online banking system, Inquire in the bank	NFBKUS33
IBAN	An IBAN number is an alphanumeric number containing information that identifies a bank, country and account number. With lengths fixed by country, IBAN codes can be up to 34 characters.	Bank statement, Online banking system	GB 29 NWBK 601613 31926819

 

[rainy]

​

For non-SEPA transactions, there is no difference between SWIFT + IBAN and SWIFT + account number. Other than that it's slightly more difficult to have a typo in an IBAN if you are using a bank/financial institution that performs IBAN validation.

The benefit of IBAN is if you transact within SEPA (Single Euro Payments Area). Transactions within SEPA are almost always faster and cheaper than SWIFT, in some cases free and/or instant.

for non-SEPA transcactions, as for speed and fees that sender pays, are these the same as for a SWIFT transcaction?

 

[rainy]

Also, TW, recently, posted a news where it said "Egyptian banks now has IBAN". But so what? Egypt isn't in the EU. How will IBAN benefit the Egyptian banks? What could be done more effecently, or done easier, with IBAN compared to SWIFT, except validation of IBAN numbers or avoiding possible typos in SWIFT codes?

 

[Sols]

for non-SEPA transcactions, as for speed and fees that sender pays, are these the same as for a SWIFT transcaction?

There is no speed difference inherent to the usage of IBAN vs Account Number for a SWIFT transaction.

Also, TW, recently, posted a news where it said "Egyptian banks now has IBAN". But so what? Egypt isn't in the EU.

There are many countries outside of EU that have decided to switch to or at least implement an IBAN standard, such as Brazil, Costa Rica, BVI, UAE.

How will IBAN benefit the Egyptian banks? What could be done more effecently, or done easier, with IBAN compared to SWIFT, except validation of IBAN numbers or avoiding possible typos in SWIFT codes?

That's about it.

I wouldn't completely disregard the value of IBAN validation, though. Incorrectly typed account numbers incur significant costs and headaches for businesses all the time, and is less likely to happen with IBAN.

 

[fshore]

IBAN is basically account number + SWIFT/BIC code in a single number.

 

[Sols]

IBAN is basically account number + SWIFT/BIC code in a single number.

A lot of institutions still ask for SWIFT/BIC to go along with the IBAN, especially for non-SEPA transactions, even if the BIC can be inferred from the IBAN.

 

[rainy]

TW estimates that a payment, once sent, will hit my turkish account, which has IBAN, in 10 minutes. In TRY. Is that due to IBAN? Or is it specific to how TW works in Turkey?

 

[Sols]

That probably has more to do with Wise having access to domestic banks in Turkey and processing the payment as a domestic transaction on your behalf.

 

[extremedox101]

Egypt isn't in the EU. How will IBAN benefit the Egyptian banks? What could be done more effecently, or done easier, with IBAN compared to SWIFT, except validation of IBAN numbers or avoiding possible typos in SWIFT codes?

it's just tech for these countries but it wont be counted as sepa .

 

[mrpayments]

TW is a special case as its an EMI (non-bank) that has managed to get indirect Target2 clearing via the National Bank of Belgium so it doesn't rely on a another Credit Institution for SWIFT for EUR. Will be great to see what they do with TIPS over the next few years.