The Society for Worldwide Interbank Financial Telecommunication code (SWIFT) and the International Bank Account Number (IBAN) are two internationally recognized methods of identifying bank accounts when making payments.
What is a SWIFT code?
SWIFT is a global payment processing network and an 8-11 character code that is used to identify a bank when an international transaction is being processed.
The term BIC is used interchangeably with SWIFT and stands for Bank Identification Code.
What is IBAN?
IBAN is a standardized numeric system designed to identify foreign banks and provide additional information about overseas payments. This system is used in the majority of European countries but is not widely used in the US and Canada.
What are the differences between SWIFT code and IBAN?
The main differences come in the information that the codes contain.
SWIFT: The first 4 letters represent the bank code; the following two letters represent the country code, as stipulated by ISO 3166-1, which is then followed by the location and the bank branch codes, made up of both letters and digits.
IBAN: It consists of a two-digit country code, followed by two check digits, a 4-letter bank code, and then the digital sort code and account number.
With this in mind, IBAN identifies the specific bank account and SWIFT is limited to banks only, which is why IBAN is required by all FX platforms to enable the transfer of funds and remains the only permissible account identifier for SEPA payments.