The Business Identifier Code, or BIC, is generally interchangeable with the SWIFT code and has the same meaning.
SWIFT codes facilitate all money transfers between banks. The SWIFT code is a necessity to carry out international transfers and payments. For instance, a SWIFT/BIC code is needed to make an international money transfer from Turkey to the UK.
How to Format a SWIFT/BIC Code?
A SWIFT code contains 8-11 characters. The SWIFT/BIC code creates a format that identifies the user's bank, country, location, and branch. Here is an example of a SWIFT code:
- Bank code (4 letters)
- Country code (2 letters)
- Location code (2 letters or numbers)
- Branch code (3 digits)
The bank code consists of the first four letters. These letters represent the bank and are generally an abbreviation of the bank's name.
The country code consists of two letters. The purpose of these two letters is to indicate the country where the country is located.
The location code consists of letters or numbers and is two characters. It indicates where the headquarters of the bank in question is located.
The branch code consists of three digits. The 3 digits here indicate a specific branch. It is in the form of "XXX" representing the bank's headquarters.
Are SWIFT Code and IBAN the Same Thing?
SWIFT codes and IBAN are not the same. But they both serve similar purposes. Both SWIFT codes and IBANs can be used for international transactions. The most important difference between the two is that a SWIFT code refers to the location of a specific bank, while an IBAN refers to and specifies an individual bank account.
Why Was the SWIFT/BIC Code System Developed?
The SWIFT system, which is used worldwide, was developed to create a standardized and more secure channel for international payment transactions. SWIFT is essentially a messaging and communication network that allows different banks to send and receive information electronically. With its standardized format, the SWIFT code helps to avoid problems that occur in different countries and cause confusion between banks.
Who Uses SWIFT and BIC Code Systems?
Over 11 thousand institutions and organizations in more than 200 countries around the world use the SWIFT system. In fact, this system can be defined as the world's largest international payment network. The system processes the codes together and checks the characters in the transfer against a global database. It then determines where the transfer should be sent. A customer planning to send or receive money internationally through a bank will be asked for a SWIFT code or BIC code. For example, a customer sending from X bank should enter the SWIFT code in the corresponding field.
What Is SWIFT and BIC Code Security?
SWIFT codes are one of the most secure ways to manage international payments. This is because SWIFT and BIC codes only send the bank ID of the sender and receiver to facilitate transactions. SWIFT allows highly secure and standardized instructions to be sent and received within financial institutions. In this way, it also helps to minimize errors that can occur between international banks.
What Is IBAN?
It stands for "International Bank Account Number". The concept of IBAN was first started to be used in European Union countries for the convenience of money transfer transactions. Later, it was accepted in different countries of the world and in Turkey. In Turkey, the use of the IBAN concept in banking transactions officially started on September 1, 2005. As a result of its publication in the Official Gazette, it became mandatory in 2010.
What Does IBAN Number Mean?
IBAN, a standard accepted by the International Organization for Standardization, abbreviated ISO, was created by the European Committee for Banking Standards (ECBS). Banks create a personalized IBAN number for each of their account holders. IBANs, which have been adjusted according to the needs of each country in the world that accepts the use of IBAN, are a code consisting of up to 34 alphanumeric, i.e. letters and numbers. The first two digits in this code indicate the country code. The next two digits are control characters. Subsequent characters are reserved to identify the customer account numbers set by the countries themselves. The format for the use of IBAN in electronic media consists of contiguous characters. There are no spaces or brackets between this code.
What Are the Conveniences of Using IBAN?
IBAN, which accelerates electronic commerce, also enables more accurate transactions in money transfers. It facilitates the process of ensuring the interaction of the recipient and sender accounts. Thus, waiting times are shortened. Transferring transfers to the correct address also has a positive effect on customers and provides trust.
