A SWIFT/BIC Code is an international bank code used to identify a specific bank and its branch during a money transfer.
They are made up of 8 or 11 characters, including letters and numbers.
Banks use these codes to send and receive money securely and quickly between different institutions. Banks may also use these codes for other types of transactions, such as processing payments, setting up direct debits, and more.
BIC and SWIFT codes are essential terminologies you should be acquainted with if you are sending or receiving cross-border payments.
To put it simply, BIC and SWIFT codes are unique codes that identify each and every bank for the purpose of international payments.
Financial institutions worldwide use this system to ensure all international telegraphic transfers meet regulatory requirements and the highest standards as well as quick processing times.
Knowing where to find and how to use a SWIFT/BIC is indispensable and will prevent you from making costly mistakes.
Typically, sending money abroad with the wrong BIC/SWIFT will cause your funds to be lost somewhere in the international banking network, and getting your hands back on them could take anywhere between a few days to several weeks.
Your search for an explanation of what SWIFT codes are and how they work ends here. In this article, we'll cover everything you need to know about SWIFT and BIC codes — what they're used for, where to find them, and much more!
💡 Tip: You can also watch our video that explains BIC and SWIFT codes in 2 minutes
What is a SWIFT code?
Let’s begin by getting a bit of background information.
SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication.
An organization set up in 1973, whose purpose is to enable banks and other financial institutions to process international payments securely between themselves.
The SWIFT network has more than 10,000 members located in 212 countries, making it the largest international payment network worldwide.
Members of the SWIFT network use SWIFT codes to send money securely between accounts that are located in different countries.
Each SWIFT code consists of standardized information your bank needs to make sure that your money reaches the bank account of your beneficiary safely.
A good analogy to understand the utility of SWIFT codes is to think of zip/postal codes in an address.
If this international postal code is incorrect or missing, any letter sent to this address will never arrive.
The same thing applies if your money is transferred using the wrong SWIFT code.
What does a SWIFT code look like?
SWIFT codes may be constituted of only a few letters and numbers, but they tell banks within the SWIFT network everything they need to know to execute international payments correctly.
SWIFT Code identifies facilitating international transfers and is often used when sending money internationally.
These codes all follow the same format, they are 8 or 11 characters long. It can be found on your bank statements.
As demonstrated here, we used different colours to define the combination of letters within a SWIFT code:
- AAAA – 4-character bank code that looks like a shortened version of the bank’s name.
- BB – 2-character country code specifying the bank's country.
- CC – 2-character location code expressing where the bank’s head office is located.
- DDD – 3-character branch code (optional) representing the branch code is an optional addition that can supplement the main 8-character SWIFT.
Your transfer will be directed and channelled through the relevant bank’s head office if you leave the branch code off.
💡Did You Know: In this example, we can see our own Statrys SWIFT/BIC Code: STYSHKHH
What is a BIC code?
A BIC code is exactly the same as a SWIFT code.
Using the term SWIFT code is actually somewhat inaccurate as what we call a SWIFT code is, in reality, a BIC code.
Again, let’s have a look at some background information that will help us better understand why BIC and SWIFT are the same things.
When the SWIFT network was established, its members determined it was necessary to identify each of them in a standardized manner to facilitate international payments.
And to achieve that goal, they created the Bank Identifier Code, which is most commonly known by its abbreviated form “BIC”.
So essentially, SWIFT, the organization, technically appoints a BIC to each bank member of the SWIFT network
As the SWIFT network has kept on growing, their invention, i.e. the BIC, eventually gets referred to by the name of the organization, i.e. SWIFT.
So, don’t get confused by BIC and SWIFT as they mean the same thing and can be used interchangeably.
In many cases, you will see the same code referred to as BIC, SWIFT, BIC/SWIFT code, SWIFT/BIC code, or SWIFT ID.
Where can you find BIC and SWIFT codes?
To make things easy, banks include your BIC/SWIFT code on your account statements, both online and offline.
If you are searching for a SWIFT code to send money to someone else, the simplest way to retrieve their SWIFT code is by using an online SWIFT/BIC tool.
Put in details such as the country, bank, and location, and then the online SWIFT code tool will identify the correct one for you.
To be 100% safe, triple-check the code you have found with the recipient.
You can use one of these trustworthy SWIFT/BIC tools to do your search:
When do you use a BIC/SWIFT code?
You will need a SWIFT/BIC code each time you receive money internationally or make international transactions to ensure the funds will reach their destination safely and timely.
So, you should keep the SWIFT/BIC code of your bank account handy so you may give it, with other bank account details, to the persons you are expecting payment from.
Vice versa, you should always ask your recipients to provide their SWIFT/BIC code before you instruct payment to them.
Keep in mind that fees and foreign currency exchange rates will apply to any transfers made using the SWIFT/BIC network.
One of the drawbacks of using this system is that it is often difficult to know exactly what these costs are at the time you place the transfer.
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