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What Is the Difference Between SWIFT Code And IBAN Code

What is The SWIFT Code And IBAN Code

The SWIFT code corresponds to the international identification number of a bank. It is found on the bank account statement (RIB).

The concept of the SWIFT code and IBAN code:

The SWIFT code identifies a bank, while the IBAN identifies a specific bank account. The SWIFT code is sometimes called the Business Identifier Code (BIC). There is no major difference between the two terms.

What is a SWIFT code?

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. 

It is also the name of the company that records the SWIFT codes. It is generally found on the bank account statement.

It consists of 8 to 11 digits and a country code (FR for France), a bank code, a code to locate the bank and a code to identify the agency.

The aim is to harmonize credit transfers, direct debits and payments within the SEPA area comprising all 28 countries of the European Union, as well as the following countries: Liechtenstein, Iceland, Monaco, Norway, San Marino and Switzerland of Europe and rest of the world.

How is a SWIFT code composed of?

The SWIFT code is composed as follows:

Bank code: The bank code is composed of 4 unique characters, which identifies the bank.
Country code: The country code corresponds to the ISO code of the country, FR for France, ES for Spain, CA for Canada for example.
Location: Composed of 2 characters (numbers or letters), it allows to distinguish the banks of the same country.
Branch: Composed of 3 characters, it defines the branch of the bank. LYO for Lyon for example.

Complete SWIFT code example: AAAA – FR – PA – 012

What is the SWIFT code for?

The SWIFT code identifies an international account.

For banks, it is then easier to make transfers not only between different countries, but also between different banks. The introduction of SWIFT and IBAN codes make it possible to simplify the transfers and withdrawals made within Europe and rest of the world. Transfers are usually free of charge, however conversion charges may apply, for example in the case of different currencies.

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