If your business transfers money with international customers or suppliers, then you have a BIC/SWIFT code.
Without this code, it would be nearly impossible to identify the payment's purpose or the recipient's or sender's identities — which is why all financial institutions require this code for international transactions.
However, most business owners aren’t completely familiar with this essential protective code — so here’s what you need to know.
What is a BIC/SWIFT code?
The first thing you need to understand about BIC/SWIFT codes is that you can use these terms:
- Independently (“SWIFT” or “BIC”),
- Interchangeably (“SWIFT and BIC codes”), and
- Cohesively (“BIC/SWIFT” or “SWIFT/BIC” code).
In other words, no matter what you call it, both names refer to the same thing.
When you have your own BIC (Bank Identifier Code or Business Identifier Code) number, your bank can identify other banks that are part of the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, which allows for a successful and verified transaction.
How BIC and SWIFT work together
While the SWIFT network is not responsible for transferring money, it does carry the transfer instructions between banks. Each transaction using the SWIFT network will incur a transaction and exchange fee for the corresponding transfer.
The SWIFT code is a string of characters identifying which banks and institutions are part of an international transfer. It answers who and where these financial institutions are so that your money goes to the correct international bank account number and recipient.
Think of the SWIFT code as a ZIP or postal code in a mailing address. If a letter or a number is missing, your mail will never arrive. Similarly, the correct identifying code means the money you send will land in the correct bank account.
Simply put, it’s a transfer of information reflecting which accounts should be debited and which accounts should be credited with a specified amount of money. Without this code, the corresponding bank would not know where to send the transfer money.
The SWIFT system over the years
As an international money transfer network that securely allows banks and other financial institutions to process payments globally, it’s no surprise that the SWIFT system has grown exponentially over the years.
But it had humble beginnings: SWIFT was founded in Switzerland by Carl Reuterskiöld in 1973. By 1979, the SWIFT system had a mere 239 members in 15 countries.
Today, SWIFT is accepted in 210 countries with more than 10,000 members and is overseen by the G-10 central banks (Germany, Italy, Japan, the Netherlands, Belgium, Canada, United States, Sweden, and Switzerland) and the European Central Bank, making it one of the most extensive international payment networks for financial institutions worldwide.
What do SWIFT/BIC codes look like?
The bank identifier code is used to tell banks everything they need to know about the international nature of a financial translation. It consists of 8 or 11 letters and numbers, which are typically arranged in the following format:
Let’s break down each of the four main components of the BIC number:
- Bank code: AAAA generally consists of four characters representing the bank’s name or unique code.
- Country code: BB stands for the specific country’s code.
- Location code: CC denotes the location of the bank’s head office or primary office.
- Branch code (optional): DDD typically has three characters, is optional and stands for supplementing information to the transaction that helps identify bank branches.
If you’re curious or in need of a SWIFT code, here’s a quick list of some of the prominent ones for major international banks:
- Bank of England (UK): BKENGB2LCON
- Deutsche Bank (Germany): DEUTDEFFXXX
- Scotiabank (Canada): NOSCCATTXXX
- Bank of America (USA): BOFAUS3N
Do all banks have a BIC/SWIFT code for international transactions?
No — some U.S. credit unions and small banks are not part of the SWIFT system.
But if you work with a small bank for your business, this isn’t a be-all-end-all: They might still be able to receive and send money internationally. This is because some work with larger banks within the SWIFT system.
In other words, larger banks are their intermediaries for all international transactions. You’ll want to double-check with your small bank or credit union to verify as some do not have an intermediary bank relationship.
Is the BIC/SWIFT code the same as the sort code?
The short answer is, “not exactly.”
BIC/SWIFT codes are specifically for sending and receiving money internationally, while sort codes are six-digit codes used for domestic transferring within the U.S. However, your sort code will also be present on any international payments.
Is the BIC/SWIFT code the same as the IBAN?
With a name like IBAN — which stands for International Bank Account Number — it’s easy to confuse it with the BIC/SWIFT codes. After all, they’re both international codes, right?
While the SWIFT code system and IBAN are used to identify international transactions among banks and institutions, they are not the same: The bank identifier code identifies the particular bank for the international transaction, while the IBAN identifies the individual account for the set transaction.
Where you can find your BIC/SWIFT code
Finding your BIC/SWIFT code is easy: if you send or receive money internationally, one is automatically assigned to you. If you don’t know where to find it, you can usually check one of three places: Your bank statement, an online BIC/SWIFT tool, or with your bank.
Method #1: Bank account statements
To make it as simple as possible, banks typically provide the SWIFT code on your bank account statement near your account and routing numbers. If you need your BIC/SWIFT code immediately, log into your online bank account and download a recent bank statement. You should find it in the same place you would on a physical copy.
Method #2: BIC/SWIFT tools
Can’t find it on your statement, or don’t have access to your online bank right now? There’s good news — you have other resources, such as the official online BIC Code Search.
You can easily input the bank details, country, and location to identify the correct SWIFT code. But be aware that a bank can have multiple SWIFT codes (usually one per branch), so be sure you’re using the right one.
Method #3: Contact your bank
If you can’t locate your BIC number or are unsure if you have the correct one, your best action plan is to contact your financial institution directly.
You can also quickly search and locate the SWIFT code on your bank’s website. You can find it in the Frequently Asked Questions (FAQ) section or by using the search box.
Cross-checking your BIC/SWIFT code
You might think, “So what if I input my code wrong? I’ll just redo it.” There are a couple of issues that faulty numerical input could trigger.
First, sending money with an incorrect or non-existent SWIFT/BIC code may cause your bank to reverse the transaction. This can quickly lead to problems: Besides triggering a longer wait time for funds sent and received, you’ll also incur a fee for the transaction.
Cross-checking your BIC/SWIFT codes can also help prevent losing money within your business. If your code is even one number off, there’s a chance it belongs to another account holder. And this means you may send your money to an unknown account and need to prove it was a mistake to get it back.
Always double-check your BIC/SWIFT code when sending payments abroad with what’s on your statements or bank account details. Here are two fool-proof ways to ensure you’re not making an irreparable mistake:
- Ensure there are no typos or errors in your code. BIC/SWIFT codes are 8 to 11 characters long, which doesn’t sound like a lot — but typing random letters and numbers can lead to an unforeseen typo. Try copying and pasting your BIC/SWIFT code from your online statement or online finder tool.
- Ensure you’re following the correct format. Your BIC/SWIFT code comes in a particular format: The bank code, the country code, the location code, and the branch code (if applicable). Don’t mix these numbers up because the order matters.
Simplify international money transfers with our hands-free accounting
You know how to find and use your BIC/SWIFT code, but if your business frequently works or sells internationally, you’ve probably noticed one glaring issue: Sending and receiving payments on a global scale can become a resource-heavy duty — on both the human and capital front.
That’s where BILL comes in. Our software solution has been designed to simplify all payment processes, including complex global transactions. Additionally, you can easily streamline your domestic and international payments with automated accounts payable and accounts receivable systems and convenient features customized to your needs.
BILL can help you make quick, affordable international payments, all while minimizing fees and ensuring on-time payments and invoices. Learn more about BILL today.