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You may have heard of IBANs and BIC/SWIFT codes if you’ve ever tried to make an international wire transfer. What are these codes and what are they used for? Read on to learn more.
What are IBANs and SWIFT/BIC codes?
IBAN, BIC, and SWIFT codes are numbers and codes that assist in the international money transfer process.
These codes are used in order to properly identify the bank and account to which you are sending the money, as well as verify who is sending the money. It is helpful to know what these acronyms stand for in order to understand what their purpose is.
IBAN stands for International Bank Account Number, BIC stands for Bank Identification Code, and SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication.
SWIFT is the network through which international funds transfers are executed. For more information about SWIFT and international wire transfers, check out our blog post on them!
Note: SWIFT and BIC codes refer to the same code; the terms are used interchangeably. Different banks and financial institutions use both terms, and sometimes even combine them in ways like SWIFT/BIC or BIC/SWIFT. For clarity, in this article, we will refer to these codes as BIC/SWIFT codes.
When you want to make an international wire transfer, you must go to your bank and provide them with information, such as your personal information, ID, your bank account number, the recipient’s personal information, bank account/routing numbers, as well as both IBANs and BIC/SWIFT codes.
What is an IBAN?
IBAN stands for International Bank Account Number. The IBAN code refers to an individual bank account. When initiating a wire transfer, you need to provide the IBAN for both your account (as a sender) as well the recipient’s in order for the funds to be transferred to the correct person.
The IBAN also acts as a method of checking that the transaction details are correct on the sender’s side.
Notably, the United States does not use IBANs, but many European, Middle Eastern, and Central American countries do use them.
Each country has a different IBAN format for bank accounts in that country, and the code can be up to 34 letters and numbers. For example, a fictional IBAN for an British bank account is GB29NWBK95327697664122.
What is BIC/SWIFT Code?
BIC stands for Bank Identification Code, and SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. While IBAN refers to a specific individual account, BIC/SWIFT codes are used to identify the bank to which you are sending the money; you must provide this code in addition to the IBANs when you go to the bank and initiate an international wire transfer.
Providing this code is vital in order to ensure that the funds are delivered as fast as possible when making a payment via wire transfer; failure to include the correct BIC/SWIFT code greatly increases the chances that the wire transfer will be unsuccessful.
All BIC/SWIFT codes follow the same format; they are between 8 and 11 characters and follow the following format:
WWWW – 4-character bank code that appears like the name of the bank
XX – 2-character country code that tells you in which country the bank is located
YY – 2-character location code that tells you where the bank’s main office is located
ZZZ – optional 3-character branch code that delineates where the specific branch is located (if this is omitted, the code is just XXX)
For example, the BIC/SWIFT code for a Barclays UK bank account is BUKBGB22XXX, and for a US Wells Fargo bank account it is WFBIUS6SXXX.
borderless™: A Simpler Alternative to Wire Transfers
Do all of these numbers and codes sound complicated and confusing to you? You’re not alone. In addition to being expensive (with an average of $25 per outgoing domestic wire and $43 for outgoing international wire) and slow (can take anywhere from 3-10+ days for international transfers), the wire transfer process can be incredibly complex and opaque.
That’s why borderless™ has created an alternative method for businesses and individuals to make and accept local and international bank transfers.
borderless™ is a global bank to bank payment solution, utilizing its own infrastructure to electronically transfers funds between banks. With borderless™, there is no need to find and manually enter twenty-digit IBANs and BIC/SWIFT codes.
How? When you sign-up, you add your bank once using your online banking, and we take care of the rest. There’s no need to share private information like account/routing numbers, or worry about IBANS or BIC/SWIFT codes. We store your banking information in a secure database. Unlike wire transfers, borderless™ is made to keep things simple, reduce human error and keep your information safe.
Every business on the borderless™ network receives a unique handle @CompanyName upon sign-up. You can then use “@HandleName” to pay or request payments to others. If you’ve ever used social media like Instagram or Twitter, making payments with your borderless™ handle is just as simple and intuitive.
borderless™ is free to use and free to make payments anywhere it operates in. We also offer payment tracking, allowing you to track your payments in real-time so you have peace of mind always knowing where your funds are.
Compared to the complex, opaque, expensive, and slow wire transfer process, borderless™ is simple, transparent, affordable, and efficient. It is the best choice for making and accepting international bank payments.
Create your account today and start receiving and making international direct debit payments in minutes. Use code GETSTARTED21 at sign up or book a live demo with our team here.