Bank identifier code (SWIFT) is an essential element for global commerce, enabling secure international payments between financial institutions worldwide.
Every business engaging in cross-border transactions needs to understand these SWIFT/BIC codes to optimize their international transfers and reduce transfer delays.
What Is Bank Identifier Code (SWIFT) and How It Works
A SWIFT code is an 8 to 11-digit business identifier code that enables financial institutions to process international fund transfers securely. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, operating the world’s largest financial messaging network with over 11,000 banks across more than 200 countries.
The SWIFT network processes more than 40 million financial transactions daily through SWIFT messaging services, including SEPA payments and other international transfers, facilitating everything from supplier payments to foreign exchange operations.
When you initiate a money transfer, your bank uses the recipient’s SWIFT/BIC code to route the funds through the global banking system.
When SWIFT Is the Best International B2B Payment Option
SWIFT/BIC code systems excel for large-value business transactions, particularly when dealing with:
- International supplier payments above $10,000
- Cross-border real estate transactions
- Foreign exchange settlements
- Trade finance operations
- International wire transfers requiring regulatory compliance
- Regulatory-compliant transfers requiring full audit trails
Business identifier code systems offer unmatched security through encrypted messaging and standardized protocols, supporting both traditional wire transfers and modern SEPA payments, making them ideal for high-stakes commercial transactions that require compliance documents.
The International Transfer Process
International payments and transfers follow a structured process when sending and receiving money:
- Your bank validates the recipient’s SWIFT code and account details
- Money is debited from your bank account
- Your bank sends payment instructions through the SWIFT network
- Intermediary banks process the transfer if needed
- The recipient’s bank credits their bank account
The Role of Intermediary Banks
Intermediary banks facilitate transfers when direct banking relationships don’t exist. These correspondent institutions maintain accounts with multiple international bank partners, enabling global reach for smaller financial institutions. Each intermediary may charge processing fees, which explains why some transfers cost more than others.
Business party relationships between banks and other business party entities enable this correspondent network, facilitating BIC-based routing for complex overseas transfers. Financial messaging standards ensure secure communication between all participating institutions by utilizing counterparty databases.
SWIFT vs BIC Codes
SWIFT codes and BIC codes are identical; the terms are used interchangeably.
BIC stands for Business Identifier Code, the official ISO 9362 standard designation managed by the registration authority. However, most banks and businesses refer to them as SWIFT codes due to the network’s prominence.
Connected BICs belong to institutions with direct SWIFT network access, while non-connected BICs identify institutions that rely on correspondent banking relationships. Understanding this distinction helps explain varying transfer speeds and costs.
The business identifier code serves as a digital address for financial institutions, ensuring international payments reach the correct destination when sending and receiving funds. BIC registration procedures ensure only legitimate institutions receive these identifiers.
SWIFT/BIC Code vs IBAN vs Routing Numbers
Different payment systems require different identifier types:
SWIFT/BIC code systems identify the financial institution, while IBAN numbers identify specific bank accounts within that institution for financial transactions.
Routing numbers serve similar purposes to SWIFT codes, but only for domestic US transfers.
Complete Banking Codes Overview
Modern international payments utilize various identifier systems with specific digits and formats depending on the region and payment type:
SEPA payments within Europe require both the BIC code and the IBAN number for complete processing. This dual-identifier system ensures accuracy for euro-denominated transfers across EU member states. International bank operations must comply with specific SEPA requirements for cross-border European transactions.
SWIFT Code Structure: A Detailed Breakdown
Every business identifier code follows a precise structure that identifies the bank, country, location, and bank branch for accurate financial transactions.
Understanding this format helps verify accuracy and troubleshoot transfer issues.
The Four Components
Bank Code (Positions 1-4): Four letters identifying the financial institution
- Example: “ABCD” for ABCD Bank
- Usually resembles the bank’s name or brand
- Assigned by SWIFT during registration
Country Code (Positions 5-6): Two letters following ISO 3166-1 alpha-2 standard
- Example: “US” for United States, “GB” for United Kingdom
- Indicates where the bank’s head office is located
- Cannot be changed without relocating headquarters
Location Code (Positions 7-8): Two alphanumeric characters specifying the city
- Example: “33” for New York, “22” for London
- May use numbers or letters, depending on the country
- Identifies the bank’s primary operational center
Branch Code (Positions 9-11): Three optional characters for specific bank branches
- Example: “001” for main branch, “XXX” for head office
- Often omitted for primary locations
- Functions as branch identifier enabling routing to specific bank branches
Complete Example Analysis
ABCDUS33001 breaks down as:
- ABCD: ABCD Bank (fictional institution) – bank code
- US: United States (country code)
- 33: New York (location code)
- 001: Branch 001 (branch code)
This identifier would route transfers to branch 001 of ABCD Bank’s New York operations. Different bank branches within the same international bank require unique branch codes for proper routing.
How and Where to Find Your Bank Identifier Code (SWIFT Code)
Locating your bank’s SWIFT code requires checking multiple sources for verification:
Primary Sources:
- Bank statements (usually in international transfer sections)
- Online banking platforms under wire transfer details
- Mobile banking apps in account information
- Bank websites in FAQ or global services sections
Alternative Methods:
- Customer service phone support
- Physical branch visits
- Third-party SWIFT code lookup tools
- Banking correspondence and welcome packets
Always verify codes directly with your financial institution before initiating transfers. Incorrect codes can delay transfers by 3-5 business days or result in returned funds with additional fees.
Validation Tips:
- Check that the country code matches your bank’s location
- Verify that the bank code resembles your institution’s name
- Confirm the location code corresponds to your branch’s city
Cost Structure for SWIFT Transfers
International wire transfers using SWIFT codes typically involve multiple fee components:
Bank Charges:
- Outgoing transfer fees: $15-50 per transaction
- Incoming transfer fees: $10-25 per transaction
- Currency conversion margins: 2-4% above mid-market rates
Intermediary Costs:
- Correspondent bank fees: $10-30 per intermediary
- Multiple intermediaries can compound costs
- Express processing surcharges: $25-100
Total Cost Factors:
Transfer amount, currency pair, destination country, and processing speed all influence the final costs. Business accounts often receive preferential pricing for high-volume transfers.
Often, businesses can save more on B2B international payments by choosing the most efficient and cost-effective payment option, tailored to their specific business operations. This is one of the benefits of having a multi-rail payment strategy.
Enhancing Global Operations Efficiency
Modern payment platforms are revolutionizing international business transactions by integrating multiple payment methods into unified solutions.
Bancoli’s Global Payment Gateway exemplifies this approach, offering businesses access to ACH transfers, wire transfers, stablecoin payments, and direct Bancoli-to-Bancoli transfers through a single interface, streamlining international payment workflows while maintaining full SWIFT code compatibility for traditional banking requirements.
