What is a SWIFT code?
The safe and efficient transfer of funds is a crucial component of commerce in today’s modern world. International transactions can present a challenge for some businesses. The SWIFT (Society for Worldwide Interbank Financial Telecommunication) code plays an important role in making international digital transactions a simpler process for businesses across the globe.
A SWIFT code, also known as a Bank Identifier Code (BIC), is a standardized identification code used by banks and other financial institutions across the world. A universal address of sorts, a SWIFT code helps banks communicate effectively during international money transfers. Using these codes means transactions are verifiable and trustworthy.
What does a SWIFT code look like?
The SWIFT code was established in 1973, and its use began in 1977. During that year, only 518 banks across 22 countries used SWIFT codes. But today, over 200 countries and nearly every bank around the world uses a SWIFT code for international business. Obtaining an accurate SWIFT code is essential for employers and HR managers aiming to do business internationally. A SWIFT code lookup can help make this process simpler.
Traditionally, a SWIFT code consists of 8 to 11 characters and is composed of both numbers and letters. A SWIFT code for a bank may be available on the bank’s official website or by contacting their customer service department. Many financial institutions that use SWIFT codes employ SWIFT code verification tools, allowing bank users, employers, and HR managers to locate accurate codes in a few simple steps.
A typical SWIFT code in use today might look something like this: AAAA-BB-CC-123. The first four characters serve as the institution code, while the next two pairs of characters are the country code and location code. The last three characters of the code are optional and represent a specific branch.
What is a SWIFT code used for?
SWIFT codes allow employers and HR managers to efficiently manage payroll for international employees. This timely method of payment allows organizations to easily do business with international contractors, freelancers, and consultants. An accurate bank SWIFT code is essential for successful transactions. Freelancers and contractors unfamiliar with the concept of SWIFT codes should verify that their chosen bank is indeed a SWIFT code bank.
Prior to the inception of the SWIFT code, bank transactions processed on an international level proved challenging for some businesses. There are several benefits to SWIFT codes for employers and HR managers, such as efficiency, transparency, and cost-effectiveness when dealing with international contractors and freelancers. Instead of navigating complex financial systems across different countries, payroll employees can use a single SWIFT code to make transactions between banks, leading to timely and accurate payments to contractors.
Transparency is a crucial aspect of proper business practices. SWIFT codes enhance transparency as employers can easily track the progress of funds to the recipient, which ensures that payments are processed successfully. This level of transparency can help prevent payment delays and errors, ultimately promoting trust between international workers and their employers. In addition, employers can avoid unnecessary fees that may stem from incorrect routing. Thus, SWIFT code verification is vital to protect funds. These benefits explain why SWIFT code banking continues to grow in popularity as international business becomes more commonplace.
How to find the SWIFT code of a bank
Since every bank uses a different SWIFT code, users may require assistance locating their bank’s unique SWIFT code and that of the bank to which they are sending a payment. When searching for a bank’s SWIFT code, users can turn to SWIFT code lookup software or a SWIFT code finder for assistance. Once the SWIFT or BIC codes have been found, they may use a SWIFT code checker for verification.
The terms SWIFT code and BIC code are often used interchangeably, as they serve the same purpose. Sometimes they’re hyphenated as SWIFT-BIC.
Today’s diverse workforce requires fluidity in financial operations. Understanding SWIFT codes is a key component of successful international business transactions, making it crucial for employers and HR managers to familiarize themselves with this financial terminology.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
Hiring independent contractors in Canada: Everything you need to know
Find out all about hiring Canadian contractors
Employers of Record (EORs) in the UAE: Everything you need to know
How an EOR can help you hire in the UAE.
Curious about Oyster? Book a personalized demo
Leave your details and one of our experts will be in touch.