SWIFT is a code used for the identification of financial institutions in international transactions.
The acronym means "Society for Worldwide Interbank Financial Telecommunication” (Society for Worldwide Interbank Financial Telecommunications).
Also called BIC, SWIFT codes are made up of a combination of 8 to 11 characters and are designed to make it easier and more transaction security between banks in different countries. BIC means "Bank International Code” (International Banking Code)
How does SWIFT code work?
The SWIFT code is composed of 4 parts and its number of characters varies from 8 to 11. Check out how it is formed:
YYYY BB CC DDD
YYYY: the first 4 characters consist of letters and identify a banking institution.
BB: this code identifies the country of the institution and must consist of letters. In the case of Brazil it is BR.
CC: this code identifies the bank's region and may contain letters and numbers.
Area code: the last code represents the bank's branch. Some banks do not have more than one unit, in these cases, this last part of the code does not exist.
With the SWIFT code any banking institution in the world can be easily identified. Thus, even without knowing the language of other countries, it is easy to find the origin or destination agency of a transaction. This makes the global transfer system more streamlined and secure.
The SWIFT platform works as a messaging system that securely records transactions between the institutions, but does not carry out the custody of values, that is, transactions are carried out directly from an institution to another.
SWIFT History
The Society for Global Interbank Financial Telecommunications is a cooperative comprised of more than 10,000 institutions in more than 200 countries.
She went created in 1973 by several banking institutions for better communication and transactions between them. Through the SWIFT platform it is possible to make payments and transfer funds between financial institutions, for example.
SWIFT was developed with high standards of safety and cryptography, and not even SWIFT employees can read the messages, only those who send and receive them.
SWIFT in numbers
About 20 million messages among institutions and per year this number is 4.5 billion.
According to SWIFT, between 1973 and 2014, 56 billion data had already been exchanged by financial institutions. The system today comprises more than 10,000 financial institutions.
These numbers show the importance of standardizing SWIFT for the agility and security of operations.
SWIFT fee
Transactions carried out with SWIFT are subject to a fee, called the SWIFT fee. The system charges $20 per transaction, but this amount can vary between financial institutions.
What is IBAN?
Another acronym related to international transfers is IBAN, which means "International Bank Account Number” (International Bank Account Number).
This code was created in 1997 for transactions between European Union countries and is currently used in 69 countries around the world. The IBAN is a code of up to 34 characters. In Brazil, this code has 29 characters, and was regulated in 2013 by the Central Bank.
IBAN is currently the code used for the international transfer of funds to accounts maintained in Brazil.
See also the meanings of TV and IOF.