Tracking IBAN payments is often not a straightforward process. Many banks do not provide this built-in functionality in their online banking services. In this article, we will explain what an IBAN payment is, whether it is possible to track it, whether it is a SWIFT or SEPA payment and what the difference is, how to trace the whole chain in international payments, and the reasons why an IBAN payment can get stuck.
What is an IBAN?
An IBAN is a unique identifier assigned to a bank account. It helps banks process payments accurately and efficiently by providing essential details about the account holder and the bank. The structure of an IBAN includes a country code, check digits, bank identifier, and account number. In most countries, an IBAN is almost equivalent to an account number, especially in the European Union. Some other countries, like the UK and Israel, are in a transition period, and you may have both an IBAN and an account number. You need to rely on the beneficiary's bank instructions, but if unsure, always use the IBAN instead of the regular account number for international payments.
What is IBAN Payment?
The term "IBAN Payment" doesn't clearly define how the funds were sent. For our goal—tracking and tracing a payment—this is very important. If you send euros across the EU, it is most likely a SEPA payment. A SEPA (Single Euro Payments Area) payment is a type of cross-border bank transfer that allows for easy, fast, and cost-effective euro transactions within the SEPA zone. SEPA was established by the European Union to simplify and harmonize payments across Europe.
An IBAN payment could also be within a country. For example, the UAE and Kazakhstan use IBAN as the primary identifier for accounts. So, if you send AED across the United Arab Emirates, you don't use any SEPA or other cross-border payment solutions. However, payments within a country rarely get lost and usually take no more than a couple of business days. If a delay or issue occurs, the sender should always address it with their bank, requesting a payment investigation.
Most international payments, if they are not in euros within the EU, are sent via SWIFT. Payments sent over SWIFT often pass through one or several correspondent banks, which are legally obliged to check the payments for sanctions evasion, anti-money laundering activities, and other compliance requirements.
How to Track IBAN Payments Sent over SWIFT?
Tracking IBAN payments sent over SWIFT involves several steps. Here’s a simplified guide to help you through the process:
- Obtain the UETR code of the transaction: Every international transaction comes with a reference number. Banks have decided at some point to standardize them to ensure they are unique across the entire chain. An example of a UETR code is: de2da6c9-18be-48d4-8053-867ed90a316a.
- Use Online Banking Platforms: Some banks offer online tracking tools. Log into your online banking account and navigate to the transaction history or tracking section.
- Contact Your Bank: If online tracking is not available, you can contact your bank’s customer service for assistance. Provide them with the transaction details and reference number. Ask specifically for SWIFT GPI Tracking services if bank provides them.
- Third-Party Tracking Services: There are several third-party services that offer IBAN Payment Tracking services. While they provide limited capabilities, sometimes they are the only source of data for the lost cross-border payment.
Why IBAN Payment was Delayed?
There are several reasons why IBAN payments could stuck. From our experience the most often are:
- wrong account details (IBAN)
- incorrect correspondent/intermediary bank information
- compliance procedures at the correspondent/intermediary bank
To avoid delays always double check the beneficiary details before sending the payment. If unsure, ask the beneficiary to double check with his bank. The beneficiary must ask his bank to recall the payment or adjust payment details if there was a mistake done. Sometimes it can take up to two months to return the payment with wrong IBAN / correspondent bank info.
If you are in the business of cross-border payments, you may try to manually place a faster correspondent bank. For example, JP Morgan Chase is known as the most straightforward for USD and Bank of America can hold payment for couple months without the real reason. You can order information about correspondents of the beneficiary banks here.
Always place a short but reasonable explanation for the payment in a payment details field. If you send yourself, you can put “OWN FUNDS TRANSFER”. If this is a transfer to your relative - “TRANSFER TO CLOSE FAMILY MEMBER”. If that's a payment for some goods or services, place invoice number, contract number and some details about nature of goods and services, for example: “LEGAL SERVICES, CNTRCT ABC 2024-07-01, INV ZXC 2024-07-01”.