IBAN Confirmation API Service
IBAN, the “International Bank Account Number,” is a standard international numbering system developed by the International Organization for Standardization to identify bank accounts. The IBAN unifies the number of digits for all numbers of banking accounts, with slight variations from one country to another, which facilitates the operation and processing of banking transfers through electronic systems. IBAN facilitates the straight-through-processing of remittances and deposits by identifying the beneficiary account number accurately and quickly. It also enables the sending bank to verify the beneficiary’s account number to avoid return transfers of wrong account numbers. In Jordan, the IBAN is 30 digits long and consists of two digits for the country code (JO), two check digits, and four digits for the Bank Identifier Code (BIC), followed by four digits for the bank’s branch and the customer account number.
In 2022, JoPACC (Jordan Payments and Clearing Company) launched the IBAN Confirmation Service, which can be used for different payment systems that consider the IBAN a payment address, such as CliQ, ACH (Automated Clearing House), and RTGS (Real Time Gross Settlement). The IBAN Confirmation Service is deployed on the JoPACC API Gateway and allows payment senders to verify and ensure that payments are routed to the correct beneficiary. For example, clients of banks and mPSPs (Mobile Payment Service Providers) can validate the name of the recipients using their IBANs before completing any transfers or payments. The service also permits financial institutions to know whether the account associated with the IBAN is active or not prior to initiating the payment.
The IBAN Confirmation service aims to reduce the rejection rate of payments on different systems. In addition, it minimizes the chances of sending a transfer to the incorrect recipient, ensuring smoother transfers. When a user opts to make a transfer using an IBAN, their account, whether a mobile wallet or a bank account, displays the name of the IBAN owner for the sender to check it before completing the transfer. It is essential to point out that the customers’ data privacy is protected and preserved, as the name of the IBAN owner can be displayed using the service only if their bank has obtained the customer’s consent before enabling any inquiry of their IBAN.
Furthermore, to ensure that the service is not misused and that IBANs are not inquired randomly, an additional layer of security verification has been put in place, where the service requires the last four digits of the beneficiary’s mobile number or their national number. These unique identifiers enhance safety and prevent sensitive information from reaching unauthorized persons. Another feature worth highlighting is that corporate entities can use the service through their bank or mPSP. This service currently allows the verification of individual accounts. Institutions and corporate companies that make regular payments to bank accounts can immensely benefit from this service to ensure that transfers reach their correct destination.
The service is so far offered by Cairo Amman Bank, Bank of Jordan, Invest Bank, and Ahli Bank.