With the growing business opportunities in the EU, International Bank Account Numbers (IBANs) are extensively used by new and established business owners to easily send and receive money within Europe and other countries. Since they offer an easy method for transferring money between countries, they are often the only thing needed to complete money transfers quickly. This has greatly contributed to the rapid growth of businesses and the ease of international trade.
The best thing about an EU IBAN is that it means you don't have to worry about moving to the EU to open an EU bank account! By choosing to open a account for your business with a financial provider that offers EUR IBANs, you can do business in the EU remotely making and taking payments like a local. In this blog, let’s get you acquainted with what exactly is an IBAN account and how you can easily get one for your business.
Why were IBAN Numbers created?
The EU IBAN (or EUR IBAN) was designed to ease international money transfers and enable business owners to run an international business with faster and easier access to funds. It was originally adopted to facilitate payments between Eurozone banks, but now it is used in 70+ countries.
IBANs are separate from your bank account number and sort code and contain a combination of the account holder's information, the country where your bank is and other bank-related details. Note that, an IBAN can only be used to make and receive payments and can't be used for any other purposes, like withdrawing money.
What's an EU IBAN Number?
An EU IBAN is a standard format for bank account numbers. It's used by banks in the European Union to identify bank accounts for the purposes of international payments. An EU IBAN consists of up to 34 characters, including the country code, two check digits, and the basic bank account number.
The first two characters are usually the country code, for example, SE stands for Sweden and CH for Switzerland. The next two digits are known for control checks that add an extra layer of security to your transactions. The rest of the characters are numbers and let you identify your bank account within that country's system, which is called Basic Bank Account Numbers (BBAN).
How do IBANs work?
When you are sending money to someone in another country, it’s important that you have their correct bank account number. If you don't, your money won’t reach its destination and the recipient won't be able to access it. With an IBAN, this isn't a problem as the system knows where your money needs to go and how much should be transferred. IBAN numbers are run through the payments system used by your bank and are not shared with other banks. Banks verify the numbers and letters through their database and then the system will approve your and the recipient's account information. If it gets approved, your transaction takes place.
How do you get an EU IBAN?
You can get an EU IBAN from any bank that offers banking services in the European Union. To get an EU IBAN, you'll need to go through the usual application process with banks or financial service providers.
Step 1: Choose a suitable service provider or a bank. If you are a small business owner, a high-risk business or a new business owner, there’s a possibility that you might face challenges when trying to open an account with traditional banks. That's when you can try financial service providers like wamo, N26, Payoneer. They are much faster and cheaper and provide a holistic financial solution for your business needs.
Step 2: Apply for your account and submit the required documents. Here are some of documents that providers usually ask for:
- Proof of address (utility bill, banking statement or a letter from the landlord confirming your address).
- Copy of your passport.
- Business registration documents (if you have them).
- Articles of association or similar documents
- A letter confirming your business purpose and the reason why you need an IBAN account (e.g., to receive payments from clients).
- A recent bank statement and reference letter
Step 3: Submit your documents and wait for the approval. This approval process might take 2-3 weeks before you can access your account.
What's the fastest way to get an EU IBAN?
We understand that you want to set up your business account with an EU IBAN as soon as possible. And with traditional banks, this process can sometimes take longer than expected. But, that does not mean you have to wait that long to start your business operations.
If you are looking for faster alternatives to acquiring an EU IBAN, there are, thankfully, other options available to you. One such option is wamo’s business account. wamo is an EMD agent of Railsbank and is regulated by the Bank of Lithuania and the Financial Conduct Authority (FCA). With wamo, registering for an account takes 10 minutes and you can open your business account with a EUR IBAN in as little as 24 hours by submitting your documents online. Built as a holistic financial management platform, wamo was designed to help eliminate the hassle and rejections faced by many entrepreneurs, new business owners and small business owners from traditional banks.
When you open an EU IBAN account with wamo, the process is pretty straightforward and enables you to make all Eurozone transactions through SEPA within seconds. Unlike traditional banks, the company's process is completely paperless and lets you manage all your financial aspects in a single place - all without stepping foot in the EU. All you need to do is download the app from Google Play or the App Store and complete your registration from the app in 10 minutes. Additionally, you can instantly connect with their customer support team to help you with your account management and any queries you might have.