BIC or Bank Identifier Code is a unique set of digits that are assigned to a bank for fund transfers across the borders or internationally. Being managed by the SWIFT payment network, the BIC identifies the bank, branch, and country accurately. Often, SWIFT code and BIC are used interchangeably.
IBAN vs SWIFT
IBAN or International Business Account Number and SWIFT code, both are used in identifying the bank accounts whilst a fund transfer is made across countries. IBAN identifies the individual account involved in the international transaction whereas SWIFT code recognizes the specific bank during an international transaction. Just as SWIFT code, IBAN also has a unique format that is made of 34 characters.
IBAN for each country had a fixed length with only uppercase letters. Apart from being used for recognizing the individual account, IBAN is also used to validate the transaction details. The introduction of IBAN and SWIFT code has systemized and streamlined the international fund transfer procedures easily.
What is the use of SWIFT code in fund transfers?
Before the introduction of SWIFT, Telex was used for message confirmation for any international fun transfer procedures. Due to the inefficiency of Telex, the whole system was affected by poor speed, insecurity, and multiple human errors. Thus was the formation of SWIFT in 1974 which led to a safe, secure and timely transfer of financial messages. Though there are other counterparts, SWIFT still holds the dominant position in conducting seamless and accurate financial transactions globally.
SWIFT is a global standard money transfer process, but not all banks are associated with it. There are certain banks associated with the SWIFT network. SWIFT transfers can take up to 1-5 working days. So do not get fooled by its name. There is a fee involved in performing the SWIFT transaction. And this will add up as often it takes one to three banks for your money to reach its destination. While conducting an online international transaction following steps needs to be followed:
- Log in to your bank’s online account and navigate to the wire transfer section.
- Check your online transfer limit.
- For a SWIFT transfer, you will be required to provide the details of the recipient that includes name, address, account type, IBAN, and SWIFT code.
- Select the currency and enter the amount
- Bear the transaction fee which involves the initial processing fee and the additional fees of your money traveling via intermediary banks.
- Be aware of the time taken for the money to reach its destination.