Here at Azimo, we’re always looking for ways to make the world of money transfer simpler for our customers. That’s why we’ve created our Ask Azimo series: to show you how sending money works and answer some of your most frequently asked questions about international transfers. First up: SWIFT/BIC codes.
What’s a SWIFT/BIC code?
A SWIFT code, also known as a BIC (Bank Identifier Code), is a system for identifying individual banks and other financial institutions around the world. Basically, it specifies who they are and where they’re located, even down to a particular branch in a city. The codes are used to help transfer money securely between banks, in particular for large international transfers.
What does the code mean?
A SWIFT code is normally made up of eight or 11 characters, for example eight letters and three digits. To understand how the code is assigned in the first place, let’s look at Bank of China in Shanghai as an example. It has the 11-character SWIFT code BKCHCNBJ300.
First four characters: the institute code (BKCH for Bank of China)
Next two characters: the country code (CN for China)
Next two characters: the location/city code (BJ for Beijing head office)
Next three characters: the branch code (300 for Shanghai branch)
The last three characters are optional, but banks often use them to assign codes to individual branches.
How do I find the code I need?
In the past, you needed a SWIFT code to send money abroad with your bank. Now you’ve discovered Azimo is the better way to transfer money, that transfer will cost you much less, but you’ll still need to know the SWIFT code of the receiving bank.
Codes can easily be found on the internet. There are several free search engines available to help you, such as Swift Code.
How does SWIFT work?
Let’s assume Peter, an Azimo customer in London, wants to send money to his friend, Anna, in Shanghai, who has an account with Bank of China.
Peter can set up the transfer via the Azimo app or website, supplying Anna’s account number and the unique 11-character SWIFT code for Bank of China’s Shanghai branch.
Once Peter has paid for his transfer and it’s been sent, a SWIFT payment authorisation message will be despatched to the Shanghai branch via the secure SWIFT network.
Once Bank of China receives the SWIFT message about the incoming payment, it will credit the money to Anna’s account.
SWIFT is one of the largest financial messaging networks in the world and is used by most of the leading banks to safely transfer billions of dollars every day, but it does have some drawbacks.
Fees for SWIFT can be higher than other methods of money transfer – Azimo also offers local bank transfers, cash pickup and mobile money, so check out all the options.
While the money is in transit, it can pass through several intermediary (correspondent) banks along the transfer chain. These correspondent banks can and often do deduct a handling fee, which will reduce the final amount received by the beneficiary.
SWIFT transfers are not always particularly, er, swift. They can take one to three working days to reach the beneficiary’s account, depending on which country they’re being sent to.
What does SWIFT stand for?
SWIFT is a snappy acronym for the Society for Worldwide Interbank Financial Telecommunication. It was formed in 1973 to solve the problem of how to communicate better about cross-border payments. The service went live in 1977 and less than 12 months later it had processed 10 million messages. Today, nearly 10,000 SWIFT member institutions send approximately 24 million messages on the network every day.
What did it replace?
SWIFT was launched to replace the Telex network, which was commonly known as ‘The Wire’, hence the term ‘wire transfer’. The system was first used in the 1930s and allowed users to send a written message down a phone line to another Telex user. Unfortunately, Telex suffered from low speed and concerns over security. Also, unlike SWIFT, there was no unified system of identification codes and this created the potential for human error.
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Azimo is the better way to transfer money around the world, touching millions of people’s lives. Fast, simple and safe, Azimo has the largest digital network in the world, enabling customers to send money to more than 190 countries from any internet-connected device.