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SWIFT Payment: What Is BIC/SWIFT Codes and How It Works?

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A SWIFT transfer is a message that has enclosed payment instructions from a payer or sending bank (Bank A) to a receiving bank (Bank B).

SWIFT is the acronym for the Society for Worldwide Interbank Financial Telecommunications network.

A BIC code, also known as a Bank Identifier Code, Business Identifier Code is a unique code that identifies a specific bank or financial institution in the global banking system.

BIC and SWIFT codes are often used interchangeably to refer to the same thing. Both BIC and SWIFT codes serve as unique identifiers for banks and financial institutions in the global banking system

Making international payments has become easier than ever before, thanks to the availability of various financial institutions such as Statrys offering SWIFT payments as a reliable cross-border payment option.

SWIFT being a global provider of cross-border payments, played a pivotal role in facilitating these transactions. In this article, we will explain what a SWIFT payment is, explore its functionality, and look at some of the fees associated with this type of transfer.

What Does “SWIFT” Mean?

SWIFT is the acronym for the Society for Worldwide Interbank Financial Telecommunications Network.

In simple terms, the SWIFT network is a member-owned system made up of banks and financial institutions worldwide for financial messages and transactions.

The easiest way to understand what the SWIFT network is comes down to understanding its history and why it was created in the first place.

What Is a SWIFT Transfer?

SWIFT transfers are synonymous with SWIFT payments. But sometimes you will come across financial institutions that refer to SWIFT transfers as telegraphic transfers (TT) or international wire payments.

A SWIFT transfer is a message that has enclosed payment instructions from a payer or sending bank (Bank A) to a receiving bank (Bank B).

In financial terms, a payment order from an issuing bank to the remitting bank, where a beneficiary will be receiving the wire transfer into their account. Bank A will be in a different country from Bank B.

However, not all SWIFT transfers are as straightforward as this, because one unique feature of SWIFT transfers is that sometimes, more than two SWIFT member banks are involved in completing a transfer.

These extra SWIFT member banks involved are known as intermediary banks or correspondent banks. For any given SWIFT transfer, anywhere from 2-5 SWIFT member banks across the world can be involved in moving funds to their destination.

This can affect the costs of a transfer and timeframes for the transfer, but we will go through this later.

Let’s now go through the process of SWIFT payments from the set-up, and what happens during, and upon completion of a SWIFT payment.

How Does a SWIFT Transfer/Payment Work?

A SWIFT transfer at the time of set-up is a payment order (message) requested by the sending bank to the receiving bank.

SWIFT requests are usually made on behalf of a personal banking or business customer looking to send money abroad, either in their denominated local currency or into the denominated currency of the country the funds are being received in.

The actual process of sending money from point A to point B is a back-end process facilitated separately by the member banks involved in any given transfer, but first, let’s see what is needed to facilitate a SWIFT transfer.

What Do You Need to Facilitate a SWIFT Transfer?

There are a few pieces of information you'll need to start a SWIFT transfer. They consist of:

  1. Recipient's bank details: You will need to provide the recipient's bank name, address, SWIFT code, and account number. This information is necessary to ensure that the funds are correctly routed to the recipient's account.
  2. Payment amount: You will need to specify the amount of money you wish to send in the designated currency. It's important to double-check the exchange rate and any associated fees to ensure that you are sending the correct amount.
  3. Purpose of payment: You briefly are required to provide a brief description of the payment such as a loan repayment or a purchase. For compliance and regulatory purposes, this information is necessary.
  4. Personal identification: Depending on the bank's policies, you may be required to provide identification documents, such as a passport or driver's license.
  5. Adequate funds: You will need to have sufficient funds in your account to cover the payment amount and any associated fees.
  6. Payment amount and currency: You will need to specify the amount of money you wish to send in the designated currency. It's important to double-check the exchange rate and any associated fees to ensure that you are sending the correct amount.

SWIFT transfers can be more expensive than other types of international payments, and you may be charged additional fees by intermediary banks.

💡Tip: Before initiating a SWIFT transfer, always check with your bank or financial institution to determine the total cost of the transaction.

What Is a SWIFT Code?

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

💡Tip: It's important to ensure that the SWIFT code provided is accurate, as mistakes in the code can result in bank transfers taking longer or even the rejection of the transfer.

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.

SWIFT codes are made up of 8 or 11 characters and are formatted as follows:

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infographic of SWIFT code
  • AAAA - The first 4 characters represent the bank or institution code.
  • BB - The next 2 characters represent the country code where the bank is located.
  • CC - The next 2 characters represent the location code, which can be either a city code or a branch code.
  • DDD - The final 3 characters (optional) represent the branch code of the bank.

What Is a BIC Code?

A BIC code is exactly the same as a SWIFT code.

Also known as a Bank Identifier Code, Business Identifier Code, or SWIFT code, is a unique code that identifies a specific bank or financial institution in the global banking system.

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

Here are some common SWIFT/BIC codes in Hong Kong:

  • Standard Chartered – SCBLHKHH
  • Bank of China – BKCHHKHH
  • Bank of East Asia – BEASHKHH
infographic of Statrys SWIFT code

💡Did You Know: In this example, we can see our own Statrys SWIFT/BIC Code: STYSHKHH

Central banks and other financial institutions identify international payments using BIC codes, including SWIFT payments. 

It's important to note that BIC codes can be subject to change, so it's always a good idea to double-check the code with the recipient before initiating a financial transaction.

How Do I Find My BIC Code?

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 SWIFT/BIC tools to verify your codes:

Is BIC the Same as a SWIFT Code?

Technically there is a difference between BIC and SWIFT codes but they are often used interchangeably in the context of international financial transactions. Both BIC and SWIFT codes serve as unique identifiers for banks and financial institutions in the global banking system.

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.

How Is Money Moved Using the Swift Network?

So, now that we know about the SWIFT messaging system, what does this mean for the actual movement of money using the SWIFT system?

Yes, it is true that no physical money exchanges hands with an initial SWIFT message. The actual movement of money happens later through mirroring ledgers or mirroring accounts known as Nostro/Vostro accounts.

The Use of Nostro/Vostro Accounts in Swift Payments

Nostro/Vostro accounts are used when one bank has money deposited in an account opened with another bank for the purpose of executing international transactions. 

What is a Nostro Account?

The Nostro account is the term used by the bank holding money in the account. This is essentially the sending institution requesting a transfer to be made.

What is Vostro Account?

 The Vostro account is the term used by the bank having the account opened in their books but in the denominated currency of the sending bank.

 A direct SWIFT transfer is only possible if the sending and receiving bank have a direct commercial relationship, aka the banks will have Nostro/Vostro accounts set up ready for receiving transfers.

⚠️Important: But what happens when there isn’t a direct commercial relationship between Bank A and B? This is where those intermediary banks enter the equation.

Let’s look at this commercial/no commercial relationship through two different transfer scenario examples.  

Scenario A – Direct commercial relationship between SWIFT member banks A & B

A US client that banks with Bank of America want to pay USD 15,000 to your bank account that is with DBS in Hong Kong. Both banks are members of the SWIFT community, which means payment will be processed using a SWIFT message.

In this scenario, both banks have a direct commercial relationship via a Nostro / Vostro account. This means:

  • A SWIFT message issued by Bank of A will be directly addressed to Bank B, located in a different country, meaning the funds will be transferred directly between the two banks

sepa nostro vostro

Scenario B – No direct commercial relationship between SWIFT member banks A & B

  • In this case, SWIFT will determine how to pass the SWIFT message to successive banks which all have Nostro / Vostro accounts with one another. This will be through using 1 or a series of intermediary banks (also known as correspondent banks) that handle the transfer along its route to its destination. 

Bank transfer with an Intermediary bank

As you can appreciate, the more intermediary banks engaged in the transaction, the higher the fees will be deducted from the paid amount, the longer the payment will take to be credited to an account, and finally the higher the risk to have the SWIFT message lost. On that note, let’s look at the fees.

How Much Are the Fees for Swift Transfers?

Whether or not a SWIFT transfer is direct or goes through correspondent banks to its destination, SWIFT transfers always have associated fees.

Fees are mainly attributed to bank handling for facilitating a SWIFT message, as in the details outlining sending a transfer and receiving a transfer. If more banks are involved, more handling fees are incurred.

Sometimes it is possible to pay anywhere from upwards of $10 to $50 USD for SWIFT financial transactions.

Secondly, fees also come from foreign currency exchange margins derived from the banks involved in a SWIFT transaction.

As SWIFT transfers are cross-border, they need to be converted from the denominated currency of the sending country to the denominated currency in the receiving country.

Who Pays for the Swift Fees?

This is where the second set of codes comes in handy to know when making a SWIFT international transfer. These SWIFT codes dictate who is responsible for paying the fees associated with the transfer. The sender chooses this when setting up the transfer. These codes are: 

  • OUR = means you the sender are responsible for all SWIFT-related banking charges (up-front and incurred later)
  • BEN = The beneficiary or the recipient is responsible for all SWIFT banking charges. These fees will be deducted from the amount received.
  • SHA = the costs are shared as the sender pays the outgoing fees, and the recipient pays the receiving fees and any correspondent fees.

Finally, there can also be fees incurred if you need to trace, investigate, recover, or cancel a SWIFT transfer after it is initiated. These fees will vary between banks.

💡Tip: Statrys offer MT103 documents for free while for many other financial institutions, you will have to pay some fees.

How Long Do Swift Payments Take?

SWIFT Transfers normally take anywhere from 1-5 business days.

However, delays are common and can happen because of national holidays in either country of a transfer, incorrect SWIFT/BIC codes or other banking details, if intermediary banks are involved or system outages on rare occasions. This can push out transfer times to a few weeks in extreme cases.

One of the benefits of SWIFT is that a transfer is traceable along its network, so if you are finding that a transfer is taking longer than expected, it is possible to organize a transfer status.


For more than 40 years, SWIFT has been the leading provider of secure financial messaging services, so using the SWIFT system to make your international transfers might be the most convenient option for you.

As you grow your business and expand into new markets, you'll want to make cross-border transactions as easy as possible.

With Statrys's multi-currency account, you can send and receive payments from around the world in 11 different currencies—making it easy for you to streamline your international transfers and save time and money.


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