IIBAN or Internet IBAN (International Bank Account Number) provides a mechanism for the identification of internet connected financial endpoints.
IIBAN is decentralized, internet-focused extension of the European Union's successful International Bank Account Number (IBAN) standard.
Status: Multiple published drafts.
Features Unique to IIBAN
- Short and fixed length
An IIBAN is only 16 characters long. For example:
In addition, a European Committee for Banking Standards (ECBS) compliant human-friendly format is also defined to aid in transcription. In
this way, IIBAN differs from its parent IBAN standard, which does not encourage ECBS-compliant human identifiers.
AA11 0011 123Z 5678
- Single case
IIBAN only allows single case letters. This reduces ambiguity by discouraging the use of lower case presentation that may result in ambiguity (the letter 'l' and the number '1'), and makes the standard more accessible in parts of the world that do not normally make extensive use of the Roman alphabet. In this way, IIBAN differs from its parent IBAN standard, which for presumably historic reasons allows the specification of both upper and lower case letters as part of an account identifier.
- Democratic namespace allocation.
Traditional financial networks require recognition of a nation state in order to acquire a two letter ISO country code. Following this recognition, they also require the establishment of a formally registered banking entity within the country in question. In practice, it is often extremely difficult for new businesses or individuals to obtain the right to issue accounts under such an identifier, and these are the only accounts that will be recognized by other banks. IIBAN encourages the democratic allocation of account issuing rights to any applying party and therefore encourages financial innovation. In this way, IIBAN differs from its parent IBAN standard, which fails to segregate traditional regulatory concerns for financial service provider oversight from the ability for newcomers and innovators to issue accounts.
- Transcription error correction
IIBAN provides a transcription error correction path that is very effective.
Features Inherited from IBAN
- Transcription error detection
A two digit compulsory checksum algorithm allows systems to detect transcription errors and prompt the user for a correction before creating potentially expensive transaction level manual intervention and support requirements.
- Simple interoperability
Because the IBAN standard is based upon fixed length identifiers associated with a limited number of 'country'-level prefixes, and because IIBAN assumes the AA 'country'-level prefix for the internet, technical barriers to the integration of IIBAN in to existing systems that support IBAN are reduced.
End users who are familiar with the IBAN standard (Europe, some other countries) will be comfortable with the structure of the IIBAN. This reduces novelty and friction of uptake.
The Structure of an IIBAN
An IIBAN is made up from the same components as the European Union's successful ISO1383 IBAN standard: country, checksum and account specifier. Similar to bank identification within the IBAN system, to facilitate the democratic allocation of segments of the IIBAN address space to the global community of innovators, IIBAN includes and institution identifier as part of the account standard. These segments can be seen as the individual sections of a human format IIBAN:
IIBAN adopts the nominal country of AA to represent 'The Internet'.
IIBAN inherits the two digital checksum from the IBAN standard. In the example, this is 11.
IIBAN makes use of a four digit institution identifier to aid in the distribution of portions of the IIBAN namespace. In the example, the institution is 0011.
- Institution-local Account
The remnant six characters of an IIBAN make up the institution-local account specifier. In the example, this is 123Z5678.
IIBAN for Innovators
If your business maintains partner or customer balances, provides market or currency exchange services or holding accounts for private or generally traded financial instruments, currencies or assets, then you can benefit from IIBAN.
- Standardized financial endpoint identification
The use of IIBAN means that customers in Europe and an increasing number of other countries are already familiar with your identifier format.
- Transcription error detection
Easily detect and suggest corrections for erroneous input - before it raises costly support issues requiring manual intervention.
- Integration potential
With an increasing number of financial systems adopting the IBAN standard, IIBAN puts you in an excellent position for integration with third party financial service providers and settlement services.
- Outlive specific settlement networks
By switching your primary account identifier from one that is linked to the settlement network(s) upon which your customers are performing transactions, you ensure that your systems (and customers!) can outlive any specific settlement network.
The php-iban project supports the validation of IIBAN, including transcription error recovery.