What is an IBAN?
- A country code
- Check digits
- Bank identifier
- Basic bank account number
How does an IBAN work?
When to use an IBAN?
- Sending interbank transfers
- Making international payments
- Receiving international payments
- Verifying whether transaction details are accurate (i.e. bank account)
What is SWIFT?
Now that we’ve covered all things IBAN, let’s delve into SWIFT and how it compares.
First things first, SWIFT stands for ‘Society for Worldwide Interbank Financial Telecommunication’. The SWIFT network facilitates trillions of dollars worth of cross-border payments in over 200 countries.
A SWIFT code is what banks use to identify one another when communicating (unlike an IBAN which identifies the actual bank account). The code itself is made up of between 8-11 alphanumeric characters, broken down into part bank code, part country code, a location code and a branch code. Here’s what it looks like:
How does SWIFT work?
When should you use SWIFT?
- When making international business payments
- When receiving international business payments
- To verify the identity of the bank or financial institution
- For international wire transfers
- When using trade finance
- For messaging related to financial services
How to obtain SWIFT codes for your business
IBAN vs SWIFT: the similarities and differences
- Both IBAN and SWIFT are essential components of international transactions.
- IBAN and SWIFT are used and recognised worldwide.
- They help to streamline and standardise the international payments process. IBAN provides a standardised format for identifying bank accounts, and SWIFT standardises the messaging and communication protocols used by financial institutions.
- IBAN's structured format helps eliminate manual errors in account numbers, likewise, SWIFT's secure messaging system minimises the risk of data entry.
- The IBAN’s main purpose is primarily to identify individual bank accounts within a specific country or region whereas the SWIFT code’s main purpose is to identify the bank itself.
- In terms of global use, IBANs are largely popular in Europe. SWIFT, on the other hand, is used internationally.
- The two also have different functions. An IBAN is used to validate and route payments accurately, whereas SWIFT in and of itself is a messaging system that facilitates communication between banks and financial institutions.
- IBANs are used to identify bank accounts.
- SWIFT codes are used to identify banks and financial institutions.
- IBANs can help you scale to new markets.
- 3S Money offers IBANs in the United Kingdom, Netherlands, Denmark, Germany and Luxembourg.
- 3S Money charges only $1 to send business payments using SWIFT and $0 to receive.
Making international money transfers with 3S Money
Making international transactions with 3S Money is quick, easy and secure. We facilitate both IBAN and SWIFT payments to help our clients in over 190 countries reach markets around the globe with ease. We’re also FCA, DFSA and CSSF regulated to ensure your funds are safe. Ready to expand into new markets? Get started with a 3S Money International Business Account today.
A SWIFT code is used to identify a specific bank or financial institution, whereas an IBAN is used to identify a specific account number.
Although there is no risk of withdrawals associated with sharing your IBAN or SWIFT code, it is not advised to share this information. Always keep your banking details safe and secure.
Yes, your IBAN code is different from the sort code and account number associated with your bank account. Your IBAN code is used to help international banks identify your bank account.