WHAT IS A SWIFT / BIC CODE?
A Swift Code is the standard format for Business Identifier Codes (BIC) and it's a unique identification code for banks and financial institutions globally. These codes are used when transferring money between banks, for international wire transfers or SEPA payments.
SWIFT code, BIC code, SWIFT ID or SWIFT - BIC (ISO 9362) is a standard format of Business Identifier Codes approved by the International Organization for Standardization (ISO). It is a unique identification code for both financial and non-financial institutions. The acronym SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. When assigned to a non-financial institution, the code may also be known as a Business Entity Identifier or BEI. These codes are used when transferring money between banks, particularly for international wire transfers, and also for the exchange of other messages between banks. The codes can sometimes be found on account statements.
The overlapping issue between ISO 9362 and ISO 13616 is discussed in the article International Bank Account Number (also called IBAN). The SWIFT network does not require a specific format for the transaction so the identification of accounts and transaction types is left to agreements of the transaction partners. In the process of the Single Euro Payments Area the European central banks have agreed on a common format based on IBAN and BIC including an XML-based transmission format for standardized transactions; the TARGET2 is a joint gross clearing system in the European Union that does not require the SWIFT network for transmission (see EBICS). The TARGET-directory lists all the BICs of the banks that are attached to the TARGET2-network being a subset of the SWIFT-directory of BICs.
Swift Code General Structure
The SWIFT code / BIC code is made up of 8 or 11 characters, broken down as follows:
- 4 letters: Institution Code or bank code.
- 2 letters: ISO 3166-1 alpha-2 country code
- 2 letters or digits: location code
- if the second character is "0", then it is typically a test BIC as opposed to a BIC used on the live network.
- if the second character is "1", then it denotes a passive participant in the SWIFT network
- if the second character is "2", then it typically indicates a reverse billing BIC, where the recipient pays for the message as opposed to the more usual mode whereby the sender pays for the message.
- 3 letters or digits: branch code, optional ('XXX' for primary office)
Where an 8-digit code is given, it may be assumed that it refers to the primary office.
When is a SWIFT code needed?
Whenever an international transfer is made, a SWIFT code is necessary. It is usually paired with an IBAN (International Bank Account Number). Once the transfer is completed, the bank that receives the money issues a ‘SWIFT message’, a confirmation that funds were received and contains the full information about the transfer.
If you need to transfer funds to pay a supplier abroad, for example, you will need to include a SWIFT code. Conversely, if a customer from abroad needs to send you payment, they will request your SWIFT.
It is therefore an important piece of information to include in an invoice if you have customers abroad. It makes payment faster because the customer will not need to request the information, and ensure that your transfer is secure.
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SWIFT Codes (BICs) of World’s Largest Banks
Swift code examples
- DEUT identifies Deutsche Bank
- DE is the country code for Germany
- FF is the code for Frankfurt
- NEDS identifies Nedbank
- ZA is the country code for South Africa
- JJ is the code for Johannesburg
- UNCR identifies Unicredit Banca
- IT is the country code for Italy
- 2B912 is the code for Venice.
Note that one bank can seem to have more than one bank identifier in a given country for separation purposes. Bank of East Asia separates its representative branch in the US and its US-based operations for local customers into BEASUS33xxx (following the code used in its home country) and BEAKUS33xxx respectively. This differs from its local mainland China operations which are also BEASCNxxxxx following Hong Kong rather than having a separate identifier code.
SWIFT / BIC Codes for World’s Largest Economies based on Gross Domestic Product
The countries below are the 30th largest economies based on their Gross Domestic Product financial indicator according to the list provided by International Monetary Fund (estimate) (2012).
For professional swift code services see swift.com which has been designated as the BIC registration authority.