What is SWIFT (The Society for Worldwide Interbank Financial Telecommunication)?
If you want to transfer money internationally, then you need to know about the SWIFT network. Most big banks use SWIFT. A SWIFT Code (The Society for Worldwide Interbank Financial Telecommunication) is a standard format of Bank Identifier Code (B.I.C.) used to specify a particular bank or branch. SWIFT Code uses when transferring money between banks, particularly for international wire transfers. Banks use SWIFT Code for exchanging messages within them.
Before coming to SWIFT Code, banks used TELEX for global exchanges. The wire was a sluggish installment orders framework that depended on depicting each trade with sentences rather than codes, which was a bad dream for the two banks and clients.
SWIFT Code's registered in 1973 and handled by Society for Worldwide Interbank Financial Telecommunication ("SWIFT"). SWIFT Codeheadquarters location in La Hulpe, Belgium. SWIFT is the registered trademark of S.W.I.F.T. SCRL. The registered address is SWIFT at Avenue Adèle 1, B-1310 La Hulpe, Belgium.
Half of all high-esteem cross-line installments were made through SWIFT in 2018, covering 212 distinct nations.
SWIFT codes hold 8 or 11 characters. All 11 digit codes refer to specific branches. In comparison, 8 digit codes (or those ending in 'XXX') point to the head or primary office.
SWIFT codes are formatted as follows:
AAAA BB CC DDD
First 4 characters refer - Bank Code (only letters)
Next 2 characters refer - ISO 3166-1 alpha-2 country code (only letters)
Next 2 charactersrefer - location code, the passive associate will have "1" in the second character (letters and digits)
Last 3 charactersrefer - branch code, optional - 'XXX' for primary office (letters and numbers)
How does SWIFT Code work?
SWIFT Code is used to communicate money transfers between two banks. When two banks have a relationship (commercial accounts with each other), the transfer is done as soon as the SWIFT message has been received. The money from one's account is transferred to another person's account via banks' commercial accounts. The banks take a fee for this transaction.
If the two banks do not have a relationship, the intermediary bank will facilitate the process. For that, you will be charged an additional fee.
If there are two currencies involved in the transfer, one of the banks will do the currency exchange.