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Understanding SWIFT Codes, BIC, and IBAN

Sending money or fund transfer has been made easy with wire transfer. No physical money is needed when transferring funds between financial institutions or banks when conducting a wire transfer.

A wire transfer basically means transfer of funds. Information is passed and done electronically between banking institutions across a network of banks around the world.

The sender provides the recipient’s name, bank account number and the amount transferred then pays for the transaction at the remitting bank through a secure system, such as Fedwire or SWIFT.

Though wire transfers in some are areas are almost instant, most wire transfers can take as long as two business days to process as international wire payments are monitored by the Office of Foreign Assets Control to ensure the money isn’t being wired for money laundering purposes.

While conducting wire transfers a secure system is needed to make the process successful. You will be needed to provide a SWIFT code, BIC or IBAN.

What is a SWIFT Code?

SWIFT stands for the “Society for Worldwide Interbank Financial Telecommunication”, an organization that provides a network for global financial institutions to send and receive information about financial transactions.

SWIFT codes are exclusive identification letters and numbers assigned to a bank or a financial institution around the world. These codes are typically used for international remittances, like for instance if you are living here in the Philippines and working online with International clients, you will be asked to provide a SWIFT code of your bank aside from the other personal details in order for you to receive payment wired to your bank account.

The 8-digit code usually refers to the bank’s Head Office, while the 11-digit code is intended for a specific unit or branch of the bank.

The 8-digit format or 11-digit SWIFT code (or BIC) typically means:

Bank Code is the first 4 letters

Followed by Country Code, the next 2 letters

Next 2 characters is the Location Code, which may consist of letters and numbers

Then the Last 3 characters – Branch Code (these characters are optional; may consist of letters and numbers; if “XXX” is used, the BIC / Swift Code refers to the Main Branch or Head Office)

MANILA – Main Branch (Head Office)



MANILA – Main Branch (Head Office)


Most of the international banks implement the use of SWIFT codes for interbank messages and wire transfers.

wire transfer, Understanding SWIFT Codes, BIC and IBAN
Understanding SWIFT Codes, BIC, IBAN – Wire transfer language

What is BIC?

BIC stands for “Business Identifier Code”, it was formerly called “Bank Identifier Codes”, and it is just another name for SWIFT Codes.

As mentioned earlier it consists of 8 characters, the extended 11 characters code is used to enable payment to be directed to a specific unit or branch of the banking institution.

To easily facilitate wire transfers, SWIFT or BIC code is typically the default code.

What is IBAN?

The “International Bank Account Number” or IBAN is currently the standard for payment codes among banks within the European Union (EU). Other countries including countries in the Caribbean, Middle East and other non-European countries also started to adopt the IBAN numbering system.

IBAN numbering system may consist of up to 34 alphanumeric characters comprising all directing information needed to process a payment from one bank to another.

Routing code contains key bank account details, such as:

two (2) characters – Country code

two (2) Check digits numbers, which is used for bank validation to confirm the check’s integrity before payment processing;

BBAN or “Basic Bank Account Number” – up to 30 alphanumeric characters, which comprise the sort code or branch code identifying the specific branch receiving the payment and the beneficiary’s account number.

Since IBAN is primarily adopted in Europe, banks here in the Philippines do not use and do not have IBAN numbers.

Swift Code, BIC code and IBAN may sound unclear and confusing at first glance, as explained above these are codes used by banking institutions to communicate to each other in order to process and facilitate payments and money transfers.


Image source: pixabay

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