IBAN: Everything You Need to Know About Direct Transfers Between Accounts

Understanding What IBAN Is

The IBAN (International Bank Account Number) functions as a standardized identifier for bank accounts in virtually all countries. Created to simplify financial transactions between different institutions and countries, the system became mandatory in Ukraine starting in 2019, significantly transforming users’ experience with domestic and international payments.

Unlike a regular account number, the IBAN is a structured code that drastically reduces the chance of errors in transfers. Its international standardization ensures that any transaction is processed reliably, regardless of the distance between the payer and the payee.

How the IBAN Structure Works

The IBAN code consists of 29 characters that carry specific information about the financial institution and the account holder:

• UA represents the international country code (Ukraine in this case)
• Two check digits act as a validation system, detecting digital errors before the transaction is processed
• Bank identifier code indicates exactly which financial institution manages the account
• Unique account number differentiates each client within the bank

A practical example of a Ukrainian IBAN looks like this: UA1234567890123456789012345678.

Who Can Use and How to Generate an IBAN

The IBAN generation system varies depending on the type of person:

For individuals, the RNOKPP code with 10 digits (previously called TIN) is used, which functions as a unique identifier for the individual. For legal entities, the EDRPOU code with 8 digits is employed. Both identifiers are essential to ensure that funds are routed correctly and reach the right holder.

Executing a P2P Transaction via IBAN

P2P (peer-to-peer) transactions represent person-to-person transfers made directly between accounts, without intermediaries. Follow these steps:

1. Obtain the recipient’s IBAN - You can find it in the banking app or request it directly from the recipient. Most banks make this information easily available.

2. Validate every detail - Before confirming any transaction, carefully review each character of the IBAN. A single mistake can result in credit to the wrong account.

3. Include the payment description - This field is crucial for the bank to understand the purpose of the transaction. You can specify “order payment,” “contract reference,” or “service fee,” for example.

4. Process through the banking app - Most Ukrainian institutions offer mobile apps that allow IBAN transfers quickly and intuitively.

Speed and Reliability of Transactions

The modern electronic payment system allows IBAN transfers between 1h30 and 22h30, with credits usually occurring within an hour during this period. Banks continue processing transactions even on weekends, offering significant flexibility.

The main advantages of this system include:

Error reduction - The structure of the IBAN and its check digits drastically minimize mistakes, making transfers much safer.

Fast processing - Online mode completes transfers within up to an hour, especially benefiting domestic and international operations.

What to Do If the Transfer Takes Longer

If the payment is not credited within an hour, it is recommended to wait until the bank’s clearing period ends, as the transaction may still be being processed. Any persistent doubts warrant a consultation with your financial institution’s support.

Understanding what IBAN is and how to use it properly transforms the banking transfer experience, turning operations that were complex into simple and reliable processes.