Difference between Swift Code and BIC Code
Key Difference: SWIFT stands for Society for Worldwide Inter-bank Financial Telecommunication. SWIFT code is used as a bank identifier in case of international transactions. SWIFT code is a code that is assigned to any institution and acts as the institution’s identity in the foreign market. BIC code also stands for the same swift code. Therefore, there is no difference between them.
Swift Code and BIC code may sound different but they mean the same thing. People often think them as two different codes, and thus get confuse. However, both SWIFT and and BIC as terms are used together as SWIFT/BIC to refer to the code. Let us find out what exactly is the use of these code.
SWIFT is a short for an even longer acronym known as SWIFT - Society for Worldwide Inter-bank Financial Telecommunication. BIC refers to Bank Identifier Codes and as SWIFT handles the registration of BIC codes, these codes are known as SWIFT codes also. This code was established in 1973 in Brussels as an identifier code. This code is assigned to both financial and non-financial institutions. When assigned to a business, it may also be known as a BEI or Business Entity Identifier.
The purpose of this code is to allow easy transference of money between banks, specifically from one country to another. In addition to money, the banks also communicate with each other using this code and it can sometimes be found on bank statements.
SWIFT can also supply software and other services to banks and other financial institutions. The SWIFT code acts as the identity of the bank when it sends or receives a transaction. The code lets the other institutions know three main things the name of the bank, where the head office is located. For example the SWIFT code for the primary office of Deutsche Bank would be DEUTDEFF. The code is made up of:
DEUT – for Deutsche Bank
DE – for Germany, the country where the headquarters are located
FF – for Frankfurt, the city where the headquarters are located
The code is usually made up of 8-11 characters and is commonly made up such as the example given above: the name of the company and the city and country of the headquarters. This SWIFT code easily helps the institutions recognize each other. A person that is sending or receiving money from one country to another is commonly asked for the SWIFT code of the bank from which it is sending/receiving the money.
Image Courtesy: openswiftcodes.com