Last editedOct 20224 min read
BIC and SWIFT codes are used to accurately identify bank branches when completing international transactions. SWIFT stands for 'Society for Worldwide Interbank Financial Telecommunication' and is the overall messaging system. BIC stands for 'Business Identifier Code' and is the code used in the system. The terms SWIFT and BIC are used interchangeably and represent information required for making international transactions.
Although BIC and SWIFT codes may seem confusing, they’re essential for anyone who needs to send international payments. So, for businesses with a global presence, they’re something you may need to know about. We’ll explain everything you need to know about BIC and SWIFT codes, including:
what they are
what they look like,
how to find them
how to use them
What is a BIC code?
BIC means Bank Identification Code, or Bank Identifier Code. It is an 8 to 11-character number that is used to identify a specific bank when you make an international transaction. It’s almost like a postcode for your bank, ensuring that your money goes to the right place.
So, what is a SWIFT code? SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication, which is a global network that processes payments between different countries.
Is BIC the same as a SWIFT code?
Short answer: yes. The terms are used interchangeably and mean exactly the same thing – they’re simply given different names by different banks and financial organisations. It’s also worth noting that these codes may be referred to as SWIFT/BIC codes, BIC/SWIFT codes, SWIFT ID or SWIFT identifiers, but again, in practice, there is no difference between any of the terms.
What do BIC/SWIFT codes look like?
All BIC and SWIFT codes follow the same format. They are between 8 and 11 characters long and they are arranged as follows:
AAAA – 4-character bank code that looks like a shortened version of the bank’s name
BB – 2-character country code telling you which country the bank is in
CC – 2-character location code telling you where the bank’s head office is located
DDD – 3-character branch code (optional) telling you where the specific branch is located
Because some banks don’t use the 3-character branch code, they’ll have a shorter (8-character) BIC code. For these banks, the branch code may be replaced by a triple X (i.e. MIDLGB22XXX) or left off entirely.
How do I find my BIC code?
If you’re receiving an international payment, you’ll need to know your BIC number. You can usually find it on your bank statements, but if you don’t have any to hand, you could also log into your online banking account or just call your local branch on the phone.
If you’re making an international payment and need to find the BIC number of the recipient, you can simply use a BIC/SWIFT finder – such as this online tool from Bank.Codes – that allows you to search for the codes of particular branches or validate SWIFT numbers for extra security.
Finally, it’s important to double-check with your intended recipient that the BIC code you’ve been given is correct before you authorize a payment. An incorrect code could mean that your payment is sent back, delayed, or even goes into the wrong account.
Is there a fee for using BIC/SWIFT numbers?
Yes, most banks will require a fee to process international payments, so you may need to pay up to £40 - £50 when you use a BIC number for your payment. It’s also possible that when your money transfer is in transit, you’ll incur a handling fee from the corresponding banks.
Bank transfers using SWIFT numbers often go through 1 - 3 corresponding banks and so these fees can add up. In addition, information on handling fees is often hidden in the small print, so it may be difficult to know how much you’ll be charged when you make the transfer.
International transaction fees are expensive and not always transparent; that’s why GoCardless offers a seamless cross-border bank payment service covering over 30 territories with pricing that is both affordable and transparent.
How do BIC/SWIFT codes actually work?
When banks send international payments, they rely on a network of correspondent banks. These correspondent banks work together to move your money from one territory to another before it finally reaches the intended recipient. BIC codes are used to ensure that your payment goes to the right bank.
On the customer side, it’s a simple process. Once you’ve got your recipient’s SWIFT number and confirmed that it’s correct, you simply head into your local branch and ask to make an international payment. Alternatively, you can use your online banking account to make the payment.
Making international payments easy
GoCardless provides a merchant dashboard from where you can set up international payments in just a few clicks.
Merchants do not need to go to the trouble of setting up foreign bank accounts, instead GoCardless offers automatic conversion and deposit in your UK bank account. However, if you already have a foreign currency account funds can be deposited there. Local currency collection is available in the UK, US, EU, Australia, New Zealand and the Nordics.
Case Study - simple and affordable international payment collection
Hub Du, a marketing agency with customers in the UK, Australia, the US and Europe, used to accept overseas payments via cards. However, they found the fees for international card transactions prohibitively expensive, and when combined with the high payment failure rate and the high level of manual admin created, the system was unsustainable.
Switching to GoCardless enabled Hub Do to save significantly on transaction fees, increase the payment success rate and enabled automation that eliminated late payments and manual admin almost entirely.
Pete Nicholls from Hub Do discusses how international payment collection with GoCardless has saved him time, money and stress:
We can help
Expanding internationally? GoCardless has created the first global network for one-off and recurring payments. Collect payments in your customers’ currency, and settle in your own currency at the real exchange rate. All with just your existing bank account. Plus, you can automate the whole process. Learn more about international payments.
International Payments FAQs
What is the difference between IBAN and BIC/SWIFT?
While BIC/SWIFT codes help to identify a specific bank when you're making an international payment, an IBAN number enables you to identify the individual bank account.
IBAN is a unique identifier for a bank account that is used by banks around Europe to ensure payments reach their destination safely.
Do I need a foreign currency bank account to collect international payments?
No. If you are a GoCardless merchant and do not have international bank accounts, GoCardless will automatically collect in foreign currencies on your behalf, convert to GBP and deposit in your UK bank account.