IBAN-only bank transfers start today

The new money-transfer system for all European companies, organizations and persons is coming into effect today. Single European Payments Area (SEPA) requires money transfers to be performed with longer, 18-number code international bank account numbers, or IBAN numbers, De Volkskrant reports.

According to De Nederlandsche Bank (DNB), however, some 20,000 smaller organizations are not prepared for this new system. The Bank states that without an IBAN, automatic debits will no longer work, and bank transfers could be delayed.

There is also a financial risk for the 200 to 300 businesses that process thousands of transactions every month, the DNB warns.

Among private account holders, 94 percent of Dutch consumers are familiar with IBAN codes. Research from seniors-organization ANBO only half of the elderly are prepared to switch, however.

Because IBAN works internationally, businesses no longer need to hold separate accounts per European country. This means that nine million bank accounts can be scrapped. The introduction of SEPA will save almost €22 billion, according to analysts from accountants-bureau PwC at the request of the European Commission.