What is a SWIFT code?

There are many ways to send money internationally. But people often use a recipient's SWIFT code, along with other identifiers, to ensure the money is sent to the correct account.

SWIFT codes are unique eight- or 11-digit codes that banks and other financial institutions can use to identify themselves. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) manages the SWIFT network, which is a messaging system that financial institutions use to send transfer requests to one another.

When is a SWIFT code needed?

A SWIFT code is often needed when sending money internationally. The SWIFT network doesn't move or transfer funds. However, the sender uses the SWIFT code to send an encrypted message to the receiving financial institution to initiate the money transfer process.

There are ways to send money across borders without a SWIFT code. But because the SWIFT network is widely used to facilitate international transfers, people commonly use terms like SWIFT payment or SWIFT transfer to refer to international money transfers, whether or not a SWIFT code is actually used.

How do SWIFT codes work?

A SWIFT code has either eight or 11 digits, and each represents something specific. For example, PayPal's US SWIFT code is PPALUS66XXX.

• PPAL: The first four digits are the bank or financial institution code, and these are often letters that resemble the company's name.

• US: The next two digits are the financial institution's country code.

• 66: The country code is followed by two digits for the company's location within the country.

• XXX: The last three digits are optional. When they're present, they represent a specific branch code, with XXX being the code for the company's head office.

The codes always follow this pattern, but sometimes a SWIFT code doesn't have any numbers in it. Some financial institutions also offer multiple services, and they use different SWIFT codes for each one.

SWIFT codes may also be called Bank Identifier Codes (BICs).

How to find the SWIFT code for a bank or financial platform

There are many ways to find a bank or financial platform's SWIFT code. Someone could:

• Look at a recent bank statement.

• Look up the code on the company's website.

• Contact the bank or financial platform and ask.

Generally, account holders will need to find and share their SWIFT code to receive a transfer.

SWIFT code vs. IBAN

An International Bank Account Number (IBAN) identifies a particular account at a financial institution. In contrast, the SWIFT code is the code for the financial institution itself. Both numbers, along with the recipient's name and contact information, may be needed when sending money internationally.

IBANs are popular in Europe, North Africa, the Caribbean, and the Middle East. However, banks in the United States have American Bankers Association (ABA) Routing Numbers instead. People with bank accounts in other parts of the world, including Australia, Canada, China, and New Zealand, also use alternative identifiers.