BIC and SWIFT codes are essential terminology to be acquainted with if you are sending or receiving cross-border payments. To put it simply, they are unique codes that identify each and every bank for the purpose of international payments.
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, plus the fees charged by your bank to assist you in this operation (account for a USD50 minimum spend for this).
Below you will find everything you need to know about SWIFT/BIC codes.
You can also watch our video:
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 organisation 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 move money securely between accounts that are located in different countries. Each SWIFT code consists of standardised 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 code 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.
These codes all follow the same format, they are 8 or 11 characters long.
Demonstrated here, we used different colours to define the combination of letters within a SWIFT code:
The last 3 digits representing the branch code are 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.
What is a BIC code?
BIC code is exactly the same as 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 thing.
When the SWIFT network was established, their members determined it was necessary to identify each of them in a standardised manner to facilitate international payments. And to achieve that goal, they created the Bank Identifier Code, which is most commonly known as its abbreviated form “BIC”. So essentially, SWIFT, the organisation, 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 get referred to by the name of the organisation, i.e. SWIFT. The same way Kleenex, Escalator and Thermos were originally the name of companies and have become generic terms to refer to the products they invented.
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.
For more information about the BIC code, refer to this guide provided by SWIFT.
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 or make a cross-border payment 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 exchange rates will apply on 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.
Using Statrys for your overseas payment will give you full transparency on applicable fees and exchange rates and can get you savings compared to your usual bank.
Before making an international transfer, check our international payment guide for more details as you may need additional bank codes for some countries.
About the author
Jonathan Cusimano is Head of FX at Statrys. With nearly a decade of experience in banking and Fintech, Jonathan has advised and assisted many SMEs in their FX hedging and treasury management strategies.