Sunday, November 27, 2022

What is SWIFT Code & Payment? find Swift Code of your bank

Do you know what is SWIFT Code and how to find Swift Code of any bank

The ongoing Russia-Ukraine war has brought the SWIFT payment system into the limelight, with the US and European nations threatening to cut off Russia from the financial world. This could prove to be a fatal blow to Russian banks, especially the smaller ones.

But What exactly is SWIFT and why is it so important that the US and European nations are using it as a major threat against Russia?

Today we will discuss in this article What is SWIFT Code & Payments? find your bank’s SWIFT code. Then let’s start with without any delay.

What is SWIFT?

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), legally S.W.I.F.T. SC, is a Belgian cooperative society providing services related to the execution of financial transactions and payments between banks worldwide. It is a messaging system for money transfers.

Their aim was to be an intermediary and executor for cross-border payments, helping them move smoothly, serving a very important need in today’s global commerce. 

Simply put, SWIFT is a global payments system, which is used by more than 11,000 financial institutions and companies around the world, across over 200 countries.

It also sells software and services to financial institutions, mostly for use on its proprietary “SWIFTNet”, and ISO 9362 Business Identifier Codes (BICs), popularly known as “SWIFT codes”.

Since the concept of SWIFT was created to make an efficient cross-border payment system, their solution for a seamless, integrated, universal process includes a series of codes. This system is used all over the world to great success. 

History of SWIFT

SWIFT was founded in Brussels on 3 May 1973 under the leadership of its inaugural CEO, Carl Reuterskiöld (1973–1989), and was supported by 239 banks in 15 countries. 

Before its establishment, international financial transactions were communicated over Telex, a public system involving manual writing and reading of messages. 

It was set up out of fear of what might happen if a single private and fully American entity controlled global financial flows – which before was First National City Bank (FNCB) of New York – later Citibank.

In response to FNCB’s protocol, FNCB’s competitors in the US and Europe pushed an alternative “messaging system that could replace the public providers and speed up the payment process”. 

SWIFT started to establish common standards for financial transactions and a shared data processing system and worldwide communications network designed by Logica and developed by the Burroughs Corporation.

Fundamental operating procedures and rules for liability were established in 1975, and the first message was sent in 1977.

SWIFT’s first international (non-European) operations center was inaugurated by Governor John N. Dalton of Virginia in 1979.[source]

World before the Swift Code

Before Swift Code, Telex was used to make international transactions. This was a very slow way to transfer funds. There were many drawbacks of this system such as this one was very slow processing, the other was it was not very secure.

It did not use a unified system of codes like Swift. Due to which its transaction processing speed was very slow. There were also a lot of human error during this work.

To solve all these problems, the SWIFT system was created in 1973. In the initial run, 6 major banks of the world participated in it. And over time, 11,000 financial institutions and companies around the world, across over 200 countries uses SWIFT Payments.

What is Swift Code

What is Swift Code & How does it works?

Swift code has many names such as ISO 9362, SWIFT-BIC, SWIFT ID, etc. All these codes are standard formats of business identifier codes approved by the International Organization for Standardization (ISO).

It is a code that both financial and non-financial institutions use. This code is used to send money from the main to international wire transfer. These codes are of 8 to 11 characters.

ExampleBBBBUS3MXXX

  • Bank code A-Z is the first 4 letter code. It looks like a shortened version of a bank’s name.
  • Country code A-Z is the second 2 letter code. This shows which country this bank belongs to.
  • Location code 0-9 A-Z is the third 2 digit location code which can be either 2 letters or 2 numbers. This provides information about the bank’s head office.
  • Branch Code 0-9 A-Z is an optional 3 digit code. This shows about the particular branch and not about the bank’s head office.

How does SWIFT work?

Banks and financial institutions use the SWIFT payment system to securely and reliably send and receive money transfer instructions.

Under the SWIFT system, each organisation is assigned a 8 or 11 character unique code.

Now, let’s understand how SWIFT works. 

What is SWIFT Code and Payments
Payments flow for a SWIFT transaction

Let’s assume a State Bank of India (SBI) customer wants to send money to their friend in the USA, who has an account with Bank of America (BofA).

The SBI customer can do this by logging into net banking and entering the details of the BofA customer, like the account number, branch name and the SWIFT code.

Once this transaction is initiated, SBI will send a SWIFT message to BofA, which will then be verified and cleared by BofA and the recipient will get the credit in their BofA account.[source]

Why is SWIFT important?

The wide coverage of SWIFT – covering over 11,000 institutions in more than 200 countries around the world – makes it an almost-universally accepted system. It counts central banks of countries like the US, UK, Germany, France, Japan, India, China, Singapore and others among its list of overseers.

Can we track SWIFT Transfer?

Customer is not allowed to access the swift terminal. only your respected bank can do this work.

If you have any problem with any of your transactions, then you can contact your nearest bank. They’ll solve your problem soon.

Who Uses SWIFT?

In the beginning, SWIFT founders designed the network to facilitate communication about Treasury and correspondent transactions only. The robustness of the message format design allowed huge scalability through which SWIFT gradually expanded to provide services to the following:

  • Banks
  • Brokerage Institutes and Trading Houses
  • Securities Dealers
  • Asset Management Companies
  • Clearing Houses
  • Depositories
  • Exchanges
  • Corporate Business Houses
  • Treasury Market Participants and Service Providers
  • Foreign Exchange and Money Brokers

What is IBAN, and how is IBAN Different From a SWIFT Code?

While the SWIFT code stands as a kind of international bank ID, the IBAN represents the accounts within a bank. When visiting a financial institution, one needs that SWIFT code, but also the IBAN for both people on either side of the transaction.  These codes help banks identify where your currency needs to go when transferred. Each has a different process, so understanding the difference between the IBAN, SWIFT codes, and routing numbers is worthwhile.

How to find Swift Code of any bank?

For example, I have already said that for any international payments through banks need a Swift Code. So now it comes up that how to find out the Swift Code of any bank. So don’t panic at all because I’m going to tell you about where to get it from.

If you need to know about Swift Code, then follow the steps below, so that you can easily get the Swift Code anywhere.

How to find Swift Code of any bank

#1: First of all, you have to go to this Swift Code Search website.

#2: Here you have to choose the right country in the select a country option below, which you are looking for.

#3: After that, in Select a Bank, you have to choose the bank of need.

#4: After that you will see all the cities below in select a city, you have to choose the city of the place where you want the Swift Code.

#5: If you do this, the names of all branches will be displayed in front of you, here you have to select the required branch in the Select a Branch option.

#6: Once you’ve chosen it, you’ll get the Swift Code you’re looking for. You can use that Swift Code according to your convenience.

If you want to know about the SWIFT code of any bank, then you can get it by visiting this website. Through this website, you will easily know the Swift Code of your bank.

What is IBAN, and how is IBAN Different From a SWIFT Code?

The financial cousin to SWIFT is IBAN – the International Bank Account Number. This is another code often needed to send money overseas.

While the SWIFT code stands as a kind of international bank ID, the IBAN represents the accounts within a bank. When visiting a financial institution, one needs that SWIFT code, but also the IBAN for both people on either side of the transaction.

Why do we Need IBAN?

The IBAN serves as a launch pad and landing pad, in a sense. We need IBAN to start and end the transfer. To go back to our earlier example, let’s assume an American, Fred, would like to send money to his friend Ana in Brazil. The steps include the following:

  1. Fred visits his local bank and puts in the request. He provides Ana’s bank and her IBAN number. 
  2. Fred’s bank contacts Ana’s bank to make the transfer request. To locate Ana’s bank, the SWIFT code is used. To locate Ana’s account at the bank, they input the IBAN.
  3. The transfer is approved
  4. Fred’s bank locates his account using IBAN, so they can take the money from his account. 
  5. The money leaves Fred’s account and deposits in Ana’s electronically. 

IBAN number is where the transaction will both originate and culminate. Without it, there’s nowhere to withdraw the money from, and there’s nowhere to make the deposit.

What does the SWIFT system provide?

Talking about today’s dor, the Swift system is being used everywhere. I’ve mentioned below are some of the places where they are most used.

Applications– SWIFT connections are being used to use the variety of real time applications such as treasury and forex transactions to process the payment instruction in the banking market infrastructure, to clear and settle the payment instruction in the security market.

Business Intelligence – SWIFT is now also used in Business Intelligence, with the help of which customers can now see real-time, dynamic messages.

Along with this, they can also follow trade flow and reporting. With the help of reports, you can get information about any place, country and message types.

Compliance Services – With the help of this, many financial crime compliances can now be reported. Know Your Customer (KYC), Sanctions and Anti-Money Laundering (AML).

Messaging, Connectivity, and Software Solutions – The core of the SWIFT system is how to create a secure, reliable, and scalable network so that messages can move very easily in that network.

IT has created many products with the help of which customers can easily send and find transactional messages.

Swift Code is upgrading its system day by day, so that it can bring in as many clients as possible and increase its transaction processing speed.

it is also going to use the automated transaction processing system now so that it does not have to face much problems in the coming time.

Due to the swift code system being more secure and secure, it has become a robust system, which has made people believe a lot in it.

Sources for SWIFT

  1. SWIFT. “SWIFT FIN Traffic & Figures.”
  2. SWIFT. “What Is a BIC Code?
  3. SWIFT. “Service Level Master Agreement (September 2020),” Page 11.
  4. SWIFT Institute. “About SWIFT.”
  5. London School of Economics. “Origins and Development of SWIFT, 1973– 2009,” Pages 2-5.
  6. SWIFT. “SWIFT History.”
  7. London School of Economics. “Origins and Development of SWIFT, 1973– 2009,” Pages 4-5.
  8. LSE Research Online. “Origins and Development of Swift, 1973-2009,” Page 4-5.
  9. SWIFT. “Swift History.”
  10. SWIFT. “SWIFT in Figures: January 2022 YTD,” Page 3.
  11. SWIFT. “Financial Market Infrastructures.”
  12. SWIFT. “Doing More for Capital Markets.”
  13. SWIFT. “Doing More for Our Banking Customers.”
  14. SWIFT. “All SWIFT Products and Services.”
  15. SWIFT. “Meeting the Challenge of Intraday Liquidity Reporting.”
  16. SWIFT. “Organisation & Governance.”

SWIFT Code FAQs

Does every bank have a SWIFT code?

No, but every bank has the option to obtain a SWIFT code. If a bank does not want to engage in cross-border transactions, then it would have no need to become part of  the network.

Is a BIC code the same as a SWIFT code?

BIC stands for Business Identifier Code, of which every business can be assigned. The SWIFT code is a type of BIC code assigned by SWIFT, so technically they are not the same. However, the terms are used interchangeably and when conducting financial exchanges, the terms mean the same thing. If a business is asked to supply the BIC code, they are requesting that eleven-character code that SWIFT assigns. The SWIFT code is simply the BIC code assigned by SWIFT and indicates the bank is part of the SWIFT network.

How do I find my Bank’s SWIFT Code?

SWIFT codes are important, and the good news is that locating your bank’s SWIFT code is easy. There are several ways to go about retrieving the code. we had given full details on how to find SWIFT code of your bank.

What is a SWIFT/BIC code?

A SWIFT code — sometimes also called a BIC number — is a standard format for Business Identifier Codes (BIC). It’s used to identify banks and financial institutions globally. It says who and where they are — a sort of international bank code or ID.

What you have learned today

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