What is a SWIFT/BIC?

SWIFT code

Ever paid a contractor abroad? To do it, chances are you needed a SWIFT code. Also known as a bank identifier code, or BIC, codes like these pinpoint the correct receiving institution so that international wire transfers arrive securely and accurately.

Whether you’re sending money internationally or running a business that pays workers worldwide, understanding the basics of the SWIFT network can help you navigate cross-border compensation with confidence.

In this guide, we’ll explain what SWIFT codes are, how they compare to international bank account numbers (IBANs), and why they’re key to secure, accurate money transfers.

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What is a SWIFT/BIC?

A SWIFT code is a unique alphanumeric identifier that tells global financial systems exactly where to route a payment—down to the specific bank branch—so that international money transfers reach the correct recipient’s account.

Developed in the 1970s by the Society for Worldwide Interbank Financial Telecommunication, the SWIFT network now connects thousands of financial institutions in more than 200 countries.

What is a SWIFT/BIC used for?

A SWIFT/BIC acts like your bank’s digital address. When you initiate a money transfer, your bank uses the SWIFT network to communicate with the recipient’s financial institution. The SWIFT/BIC ensures that those messages reach the correct interbank connection by verifying the bank identifier code and the destination’s country code. This quick and accurate process allows funds to move across borders with minimal risk or delay.

For example, if your company works with an overseas entity like a contractor in Germany or a vendor in China, you’ll likely need a SWIFT/BIC to get the payment to the right place. In these cases, the code connects your financial institution to the appropriate interbank network abroad.

Beyond wire transfers, SWIFT codes also help institutions exchange other types of financial messages, including trade confirmations, securities transactions, and foreign exchange instructions. Think of it as a universal language that allows banks to securely speak to each other, no matter where they’re located.

And when it comes to global payroll, the stakes are high. A mistyped BIC or incorrect bank account number can delay payments to remote team members or trigger costly compliance issues. That’s why understanding how SWIFT codes work—and using them correctly—is critical to any international transfer strategy.

How are SWIFTs/BICs formatted?

SWIFT codes contain either eight or 11 alphanumeric characters.

The first four letters represent the bank code, which identifies the specific financial institution. For example, “HSBC” is for the Hong Kong and Shanghai Banking Corporation (HSBC), and “CITI” is for Citibank.

The next two letters indicate the bank’s country code, such as “US” for the United States or “CA” for Canada.

After that, two characters specify the bank’s location—usually a city or a region.

Finally, an optional three-character sequence identifies a specific branch. If this part is missing or shown as “XXX,” the SWIFT code refers to the bank’s main office rather than a local branch.

Here’s how it breaks down:

AAAA: Bank code
BB: Country code
CC: Location code
DDD: Branch code (optional, or “XXX” for the main office)

For example, JPMorgan Chase’s main office in New York uses the SWIFT code “CHASUS33.” Here, “CHAS” is the bank code for Chase, “US” is the country code, and “33” represents New York City. The 11-character version, “CHASUS33XXX,” refers to JPMorgan Chase’s primary office for SWIFT transactions in the U.S.

How to identify your SWIFT/BIC

Locating your SWIFT/BIC is easier than you think. Log in to your online banking portal—your SWIFT/BIC is typically listed alongside your account number and other key banking details. You can also check your most recent bank statement, as many financial institutions include the SWIFT/BIC in the account summary section.

If you’re still unsure, many banks list their SWIFT/BIC on their websites. You can also use a verified online bank code lookup tool. To use the tool, enter your country code, bank name, and branch to find the exact identifier you need for your next international wire transfer. When in doubt, contact your bank’s customer service department.

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FAQ’s

Is a SWIFT code the same as a BIC?

In practice, yes. “SWIFT code” and “BIC” (Bank Identifier Code) are used interchangeably in international payments because they both refer to the standardized identifier issued under the ISO 9362 standard and used on the SWIFT network to route bank-to-bank messages. What matters operationally is that the code points to the right financial institution (and sometimes the right branch), so your wire doesn’t get delayed or rejected.

Do you always need a SWIFT code to send an international transfer?

No, but you often do—especially for international wire transfers. Some payment routes rely on different identifiers (like local routing codes) or alternative rails offered by fintech providers, but banks still commonly request a SWIFT/BIC when the money is moving across borders through traditional correspondent banking. If your bank’s form asks for a SWIFT/BIC, treat it as non-negotiable and confirm it with the recipient’s bank details before you hit send.

Can a bank have more than one SWIFT code (and which one should you use)?

Yes. Large banks may have multiple SWIFT codes tied to different countries, business units, or branches, and that’s where people get burned. If you have an 11-character code, it typically targets a specific branch; an 8-character code generally points to the bank’s main office (often shown with “XXX” when expanded). Use the code your recipient provides in their wire instructions, and if they only share a generic code, ask whether a branch-specific BIC is required for incoming international wires.

What happens if you enter the wrong SWIFT code?

Best case, the transfer gets rejected and returned after a few days. Worse, it can get stuck in the correspondent banking chain while banks investigate, which means delays, extra bank fees, and a lot of back-and-forth with screenshots and payment references. If you’re paying contractors or employees, that delay isn’t just annoying—it can damage trust fast, so it’s worth verifying the SWIFT/BIC and account number directly from the recipient’s bank details before initiating the payment.

Why do some banks (especially smaller ones) not have their own SWIFT code?

Some smaller banks and credit unions don’t participate directly in SWIFT for inbound wires and instead route international transfers through an intermediary (a larger correspondent bank). In that case, the recipient may need to provide the intermediary bank’s SWIFT/BIC along with additional instructions that tell the intermediary where to ultimately credit the funds. If your payee says, “We don’t have a SWIFT code,” don’t guess—ask for their official incoming wire instructions or have them confirm the intermediary details with their bank.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.