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IBAN vs. SWIFT Numbers: What’s the Difference?

IBAN numbers and SWIFT codes play an important role in the world of international transactions and transfers. Here’s what they mean & how they’re used.

The international bank account number (IBAN) and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system are both standardized methods for identifying parties involved in a cross-border transfer of funds. Since each of these standards plays a key role in international financial transactions, it’s important to understand how they work, the ways they differ, and which countries use them.

What is an IBAN number?

An IBAN is an identifier for an individual account. Established by the International Organization for Standardization (ISO) in 1997, the standard for IBANs specifies that each identifier comprises: 

  • A country code (two letters) 
  • A check digit (two numbers) 
  • A basic bank account number (BBAN) (up to 28 alphanumeric characters)

IBANs serve several key functions in sending and receiving international transfers. They allow financial institutions to quickly note a bank’s country of origin, pinpoint the account number receiving funds, and help ensure the accuracy of banking details.

One or both banks conducting an international transfer using IBANs will charge a processing fee and commission, with costs varying by country.

How do I find my IBAN number? 

Banking customers in countries using the IBAN standard can typically find their IBAN numbers on their bank statements or in their online banking portals. If an IBAN number isn’t provided in these locations, a customer can request it from the banking institution.

What’s a SWIFT number?  

A SWIFT number—also frequently referred to as a BIC code—is an identifier for a bank branch sending or receiving transfers. The majority of international transfers rely on the SWIFT system, which was launched in 1973.

Instead of specifying an individual bank account for a transfer recipient, SWIFT numbers provide bank branch information, including:  

  • A bank code (four letters) 
  • A country code (two letters) 
  • A location code (two numbers) 
  • An optional branch code (three numbers)

While IBAN numbers operate similarly to bank routing and accounting numbers, SWIFT works more like a messaging system. If the banking institutions involved in an international transfer have a relationship with each other, they conduct a SWIFT communication that results in an immediate transfer of funds. When banks involved in a transfer do not have a direct commercial relationship, a correspondent bank serves as an intermediary in the transaction. With an intermediary in the process, a transfer takes longer.

Banks charge between 3 to 5 percent in exchange rates when making an international transfer that uses a SWIFT code. Costs vary based on location and the amount transferred. 

How do I find my SWIFT number?  

Banking customers can find SWIFT numbers on their bank statements or online banking portals. They may also request the numbers from their banking institutions.

What is a BIC code?  

A bank identifier code (BIC) is an international standard— specifically ISO standard 9362—for routing business transactions. Connected BICs are part of the SWIFT network; non-connected BICs have no access to SWIFT and are used for reference purposes. However, “SWIFT code” and “BIC code” are often used interchangeably.

Why are IBAN and SWIFT numbers important?

Before the launch of IBAN and SWIFT numbers as global standards, it was far more likely that international payments would end up in the wrong locations. Plus, prior to IBAN adoption, countries had a variety of different account number formats, resulting in frequent processing issues.

Now, with IBAN and SWIFT standards in place, international funds transfers can be performed more quickly, with less error. Additionally, the SWIFT system allows parties to exchange a large amount of additional information.

What countries use IBAN and SWIFT numbers?

Many European and European Union countries mandate the use of IBAN numbers. Although the United States and Canada don’t use IBAN, both countries recognize the standard and process IBAN payments for international transactions.

SWIFT numbers are currently used by more than 200 countries worldwide.

Summing it all up: IBAN vs. SWIFT numbers 

IBAN and SWIFT numbers help to ensure fast, successful international payments, without error or mishaps. Key differences between the two standards include: 

1. What they identify 

The main difference between IBAN and SWIFT numbers? An IBAN identifies a specific bank account, while a SWIFT number identifies a bank branch.

2. How they operate 

IBAN works much like a routing number; SWIFT operates like a messaging system between banks. 

3. What they require 

When using an IBAN number in a funds transfer, the recipient must be in a country supporting the IBAN system. If the recipient is in a country that doesn’t support IBAN, the transfer must be performed with SWIFT codes. 

4. How they are used 

IBAN numbers are used solely for transfers between banks; SWIFT numbers are used by clearinghouses, brokers and dealers, asset management companies, corporate entities, and service providers.

Quick view: IBAN vs. SWIFT numbers

 

IBAN  

SWIFT 

Stands for 

International Bank Account Number 

Society for Worldwide Interbank Financial Telecommunication 

Function 

An identifier for an individual account used in a cross-border payment 

An identifier for a bank branch used in a cross-border payment 

Established 

1997 

1973 

Contains 

Country code, check digits, basic bank account number 

Bank code, country code, location code,  branch code (optional) 

Costs 

Bank transfer fees, commissions, and exchange rates (typically 3 to 5 percent) 

Bank transfer fees, commissions, and exchange rates (typically 3 to 5 percent) 

Used by 

Banking institutions 

Banks, clearinghouses, brokers and dealers, asset management companies, corporate entities, and service providers 

Locations 

More than 70 countries (many in Europe or the European Union) 

More than 200 countries worldwide 

Where to find 

Bank statement or online banking portal  

 

Bank statement or online banking portal 

 

Invoiced: Automated accounts receivable solutions

While the United States does not currently use IBAN or SWIFT systems, the need for efficient and fast payment transfers systems is universal amongst businesses.

At Invoiced, we make it easy for US business-to-business finance teams to manage payments every step of the way. Our easy-to-use, integrated Invoiced A/R platform is designed to help automate and streamline your collections and payments processes while providing you with the analytics you need.

With thousands of customers and more than $40 billion in receivables processed, Invoiced is a pioneer in the field of accounts receivable automation.

Find out more about how can help you get paid faster, spend less time on collections, and provide a better customer experience with the Invoiced A/R Software today.

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