Home SWIFT/BIC Codes What is a SWIFT code?

What is a SWIFT code?

Chances are, if you have ever made an international money transfer, you will have seen or heard the term SWIFT code come up at some point; but what exactly does it refer to? When will you need to use one? How do you find one? We will address these questions and more on this page.

Updated: 06/05/2021
Read time: 5 minutes
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What is a SWIFT code?

SWIFT codes are used all over the world to identify the bank or financial institution involved in an international money transfer. A SWIFT code will be made up of 8 to 11 characters and provides crucial details such as the address, branch number and destination country of the associated remittance.

What does SWIFT mean?

SWIFT is an acronym for Society for Worldwide Interbank Financial Telecommunication and the association was invented to resolve common financial and commercial problems, by overcoming obstacles related to cross-border payments.

In 1973 the secure global network was established, designed to used as a streamlined platform for sending and receiving information about financial transactions. Headquartered in Belgium, the network went live in 1977 and continues to be used by more than 200 countries to this day.

How does the SWIFT network function? 

In the early days of SWIFT, back in the 1970s, the network consisted of a messaging platform with its own set of standards, a computer system used to authenticate and transport messages, and a bespoke linguistic system to facilitate secure and automatic transmission.

Since then, the messaging services have continued to develop and expand: online forums have been set up to help troubleshoot common operational issues, a dedicated customer support team was introduced and as an organisation, SWIFT have been pursuing new and exciting digital avenues. 

Who uses SWIFT codes?

The SWIFT network has gradually expanded over the years, with a reported 10 million messages sent via the SWIFT network in 1979, compared to more than 5.6 billion messages transmitted in 2014. 

The SWIFT network is utilised by more than 11,000 institutions of the following kind:

  • Banks
  • Foreign exchange companies
  • Money brokers
  • Clearing house
  • Depositories
  • Brokering institutes
  • Trading houses
  • Asset management businesses

Where can I find a SWIFT code?

Your SWIFT code can be found in the following places:

  • Bank statements
  • Online banking account
  • By contacting your bank 

What is the difference between a SWIFT code and BIC?

BIC stands for Business Identifier Code and it is often interchangeably used with the term SWIFT code. It replaced the original acronym Bank Identifier Code, to reflect the number of non-bank financial services. Both codes serve the same purpose, but it is worth noting that different countries and territories use different terms, so while your bank may have referred to it as a SWIFT code, the receiving bank may refer to it as a BIC. 

How does SWIFT make a profit?

SWIFT is a global cooperative which is owned by its members; these members are categorised based on share ownership. Prospective members are required to pay a one-time joining fee as well as additional annual fees determined by their membership. 

In addition to this, SWIFT charges financial institutions by the volume, length and type of messages sent via the SWIFT network. This, in turn, has a knock-on effect for customers, who can incur high International Bank Transfer Fees.

When will I need to use a SWIFT code?

SWIFT codes are used to process the sending of money between bank accounts in different countries. You will be asked to provide a SWIFT code required for money transfers such as an international wire transfer or a SEPA payment.

FAQs

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April Summers

April is a journalist and full-time content writer for MoneyTransfers.com. Over the last decade she has written for a number of different online and print publications. Having lived overseas in Canada and Vietnam, April hopes to see more of the world as soon as possible, with Japan at the top of her travel list. As a former expat, April has first-hand experience of managing finances from overseas. She enjoys writing about forex trends and the future of banking.

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