What is SWIFT?
The SWIFT payment network is used in over 200 countries and by far more than 11,000 institutions. The term SWIFT stands for the name of the network and is also an abbreviation for the company behind it, the Society for Worldwide Interbank Financial Telecommunication based in La Hulpe near Brussels.
Financial institutions connected to the SWIFT network can use the system to exchange data quickly and securely, for example to initiate payment orders in foreign trade.
How does SWIFT work?
SWIFT itself does not process payments and is not directly involved in the booking of a transfer. The network only serves to transmit messages such as payment orders between accounts of financial institutions that are connected to the SWIFT network. SWIFT thus provides the technical infrastructure and the communication network needed for electronic data transmission.
The data transmitted via SWIFT are standardised in order to avoid misunderstandings and errors. Each financial institution is identified by its own SWIFT address, which enables the financial institution to be identified quickly and unambiguously. This is called the Bank Identifier Code (BIC), which is made up of individual identifiers for the financial institution, the country of origin and the branch location.