BIC Requirements when sending money abroad

Sending money abroad has become such a routine part of life that it’s easy to forget that a complicated transfer of information is happening behind the scenes. To make sure that your bank knows where to send the funds in international transactions, you need a BIC or SWIFT code. Without accurately sharing this information with your money transfer service, you will run into problems.

This article will go into detail on what a BIC code is and how to ensure that you are using it correctly when sending money overseas.

What is a BIC or SWIFT Code?

The first thing to make clear is that when people refer to BIC and SWIFT codes, they are talking about the same thing in both instances. BIC stands for “Bank Identifier Code.” SWIFT stands for “Society for Worldwide Interbank Financial Telecommunication.” This is the organisation that assigns bank identifier codes. The two terms are interchangeable.

A BIC is a standardised alphanumeric code that identifies a specific financial institution in such a way that it can be recognised anywhere in the world. When routing funds between banks in different countries, this is crucial, as it allows the sender’s bank to identify the recipient’s bank, no matter where it is located geographically.

People refer to a “BIC code” even though the word “code” is part of the abbreviation, in the same way that people might say “ATM machine.” In business circles, it’s perfectly acceptable to request either a “BIC” or a “BIC code,” even though the word “code” in the second version is technically redundant.

It’s important to note that a BIC is not the same thing as an IBAN (International Bank Account Number). The IBAN is used in some countries, particularly in Europe, to identify a specific bank account in order to facilitate cross-border transactions. The BIC refers only to a bank, not a bank account.

Structure of BIC/SWIFT Codes

BIC codes have a standardised structure so that they can be recognised all over the world. They have either 8 or 11 characters in total, depending on whether the bank’s branch code is included.The typical format looks like this: AAAABBCCDDD

• First four characters (AAAA): Institution code

Also known as the bank code, these letters identify the financial institution in question.

• Fifth and sixth characters (BB): Country code

These characters can be either numbers or letters and denote the country in which the financial institution is based.

• Seventh and eighth characters (CC): Location code

This part of the code is made up of either numbers or letters and identifies the location of the institution within the country.

• Last three characters (DDD): Branch code

Some institutions use these characters (again, a mix of letters and numbers) to specify a particular branch. However, not all BIC codes include a branch code.

How do I find my bank’s BIC/SWIFT code?

There are many options available for finding out the relevant BIC code for your bank, so it shouldn’t be a difficult process. Here are some suggestions of where to start:

• Go directly to your bank

Check your bank statements, bank website or banking mobile app. When it comes to the latter two options, pay attention to the sections of the interface concerning international transfers. If you’re struggling, it may be worth reaching out to your bank’s customer service department for help. You should be able to contact them via live chat, phone, email or social media.

• Try third-party platforms

If you're using a third-party financial service for international transfers, the platform often provides BIC/SWIFT code information during the transaction process. Some currency conversion services also include tools to look up BIC/SWIFT codes.

• Take the official route

SWIFT's website provides a BIC search tool where you can obtain and verify BIC/SWIFT codes. There are other official financial websites that allow you to look up BIC/SWIFT codes, such IBAN.com.

Using BIC/SWIFT codes to send money abroad

Many forms of international money transfer require a BIC or SWIFT code. This includes wire transfers via traditional banks and many online financial platforms and money transfer services. That’s because SWIFT is such a large and dominant network,which dates back to the early 1970s. It involves relatively high costs compared to more modern methods of global money transfer, but it is secure and widely adopted.

Whichever method you are using to transfer funds, it’s best to make sure that you have all the information you need to carry out the transaction in advance. This includes:

• Recipient's full name and address

• Recipient bank's BIC/SWIFT code

• Recipient bank account number or IBAN

• Amount of money to be transferred

Once you have that at your fingertips, you can log into the platform you are using, navigate to the international money transfer section, and input the transfer details. Double-check all information to ensure accuracy, and confirm the exchange rates and fees involved.

Accuracy is required for every type of transaction, but business transfers can be particularly high-value and time sensitive, so it is particularly important to ensure information is entered accurately in these cases. Overseas investing is also another area that can involve high-value transfers, so correctly using BIC/SWIFT codes when transferring money for global investments is again crucial in this context.

Potential issues and solutions

• Accuracy: As indicated above, the most obvious error to make is entering the recipient’s BIC incorrectly when filling out the details needed to initiate an international money transfer. To protect yourself from this possibility, it’s worth double-checking the code with the recipient, using online lookup tools, or verifying it through your bank's customer service.

• Outdated codes: Banks may update their BIC/SWIFT codes, for example if they go through a merger, acquisition, rebrand or name change. If it’s been a while since you last sent funds to a certain recipient, you may want to check that the BIC code remains the same, in order to prevent delays or failed transactions.

• Currency conversions: Be aware that the total cost of the transaction may be more than initially calculated if a currency conversion is involved. This is because financial institutions can charge an inflated FX rate and add international transaction fees. Ensure you have sufficient funds to cover these additional costs.

One tip for ensuring that transactions are completed without any problems is setting up instant notifications on your online banking platform or money transfer service. These can keep you informed about the progress of your international transfers and quickly alert you to any problems that could potentially cause delays.

You can also use online resources and official SWIFT directories to verify BIC/SWIFT codes, as well as checking directly with the recipient. If the recipient is a long-standing vendor, for example, and their banking information is entered into an automated payment system, it may be a good idea to ask them to periodically check and update their details.

Airwallex provides a modern alternative to SWIFT

High-speed, low-cost international transactions 

The SWIFT network is a reliable system that has been enabling legacy banks to communicate with each other for five decades. As long as you correctly enter the BIC code and other recipient details, you shouldn’t need to worry about your funds securely reaching their international destination.

However, the digital era has brought with it faster, more cost-effective and technologically advanced solutions for the global transfer of funds. Airwallex is a fintech platform that has its own proprietary local payment network. This allows you to make one-time or recurring high-speed, cost-effective international transfers. The majority of transfers made via Airwallex arrive within the same day, meaning your global suppliers and employees get paid faster than if you were to use legacy offerings.

Send money like a local

Airwallex also offers multi-currency Global Accounts that allow you to collect, hold and send money in multiple major currencies. You can actually open accounts with local branch details in international locations in just minutes. These allow you to collect and pay suppliers and employees as if you were based in the same country, avoiding costly FX fees. Where conversion is necessary, Airwallex offers un-inflated interbank rates, without hidden markups.

Click here to learn more about our FX and transfers capabilities.