What is SWIFT?
The SWIFT payment network is used in over 200 countries and by more than 11,000 banks, financial institutions, exchanges, and brokers. It enables the secure and fast transmission of payment orders, securities transactions, and other messages between financial institutions worldwide.
Financial institutions connected to the SWIFT network can exchange data securely and quickly using a standardised data format.
What does SWIFT stand for?
SWIFT refers both to the name of the network and to the acronym for the organisation behind it: the Society for Worldwide Interbank Financial Telecommunication, headquartered in La Hulpe near Brussels.
What is a BIC and how is it related to SWIFT?
The BIC (Bank Identifier Code), also known as the SWIFT code or address, is a unique identifier for a financial institution within the SWIFT system. It is a central element of the network and visible to end customers as well.
Structure of the BIC code:
The code consists of eight or eleven alphanumeric characters (i.e., a combination of letters and numbers):
- Institution code (characters 1–4)
- Country code (characters 5–6)
- Location code (characters 7–8)
- Optional: Branch code (characters 9–11)
What is the difference between BIC and IBAN?
The IBAN identifies an individual account, while the BIC identifies the respective bank. For international transfers, both are typically required: the IBAN for the recipient’s account and the BIC for the recipient’s bank.
How does SWIFT work? Is SWIFT responsible for the actual processing of payments?
No, SWIFT does not process payments itself and is not directly involved in the execution of a money transfer.
The network is solely used to transmit messages, such as payment orders, between accounts held by financial institutions connected to the SWIFT system. In other words, SWIFT provides the technical infrastructure and communications network necessary for the electronic exchange of financial data.
The data transmitted via SWIFT follows a standardised format to minimise misunderstandings and errors. Each financial institution is identified by a BIC code, which ensures fast and unambiguous identification.
Who uses SWIFT?
More than 11,000 financial institutions in over 200 countries are connected to the SWIFT network.
Since when has SWIFT been in use?
The organisation was founded in Brussels in 1973.
Are there comparable payment networks?
Comparable networks include SEPA and TARGET2.