Ben Todd | Jun 2, 2017 | 1
What is a SWIFT code?
What is a SWIFT code? It is a code that identifies banks. There are domestic and international money networks all over the world, and there are thousands upon thousands of bank branches and online banks. The SWIFT code identifies which bank is which.
What Is A Swift Code Used For?
It is a bank identifier that allows communication, information transfer and money transfer between banks and between other institutions. In the US, a SWIFT code is often required if you wish to send money abroad. Instead of giving the address of the bank that holds a certain account, you give its SWIFT code.
What Is A SWIFT Code?
A SWIFT code contains between 8 and 11 characters, and if you are sending money to an account overseas, then you will have to give a SWIFT code. In the image below, you can see how the SWIFT code is made up. As you can see, there is a bank code, country code and location code.
A Rose By Any Other Name
You may not have heard of a SWIFT code before, even if you have sent money overseas, and that may be because the SWIFT code was called something else. Here are a few other names for a SWIFT code.
- BIC – Bank Identifier Code
- NCC – National Clearing Code
- CHIPS – Clearing House Inter-Bank Payment System
- BSC – Bank Sort Code
- IFSC – Indian Financial System Code
- IBAN – International Bank Account Number
- SWIFTBIC – SWIFT network Bank Identified Code
Sending Money To Accounts Overseas
If you are sending money overseas using something such as PayPal or Transferwise Borderless, then you should not need a SWIFT code. If you are sending money to a foreign bank account, then you will need the SWIFT code of the recipient.
It Doesn’t Replace Your Account Number Or Bank Code
Your SWIFT code does not replace your bank information; you still have to give your account number, name and all the rest of it. The SWIFT code is something extra that is required when money is being sent abroad. If you have to pay a bill to a company that is situated in another country, then they may also ask for your SWIFT code. In addition, if you are conduction SEPA credit transfers (SCT) in/through Europe, then you will still need your SWIFT code or the SWIFT code of the recipient.
What Is A SWIFT Code And Who Uses Them?
The word SWIFT is used because the codes are used on the SWIFT network. The “SWIFT” in the SWIFT network stands for “Society for Worldwide Interbank Financial Telecommunications.”
It is a standard system that exists in most countries and allows the easy movement of money. Many countries agreed to use this one system and to use it as a standard so that moving money would be easier. What types of institutions use the SWIFT network these days?
- Clearing Houses
- Securities Dealers
- Corporate Business Houses
- Asset Management Companies
- Foreign Exchange and Money Brokers
- Brokerage Institutes and Trading Houses
- Treasury Market Participants and Service Providers