What is Swift Code?

What is Swift Code?

International money transfer is no longer a new concept in the era of the economic world today. The demand for international money transfer is enormous. Behind the operational system of international money transfers and confidentiality is the SWIFT system, a vast messaging network used by banks and financial institutions to send and receive information quickly and exactly. So what is SWIFT and how does the SWIFT system work?

What is SWIFT?

Swift is an acronym of Society for Worldwide Interbank Financial Telecommunication – Global Association for Banking and Finance Telecommunication. This association helps connect banks together by making international money transactions (transferring / receiving) easily, saving money and high security. Code is understood as a sequence of characters consisting of letters or numbers to create separate codes.

In essence, Swift Code is a code format that aims to identify a bank or a certain financial institution in the world to know where it is located and in which country.

Swift Code usually has 8 characters or 11 characters, each character has its own meaning: bank name, country name, branch code.

Structure of Swift Code code

what is swift code structure

AAAA BB CC DDD

Inside:

AAAA: is the abbreviation name in English of the bank name. This is a signature feature that distinguishes banks and financial institutions from each other. In the first 4-letter position, this AAAA only allows the use of letters A through Z, numbers are not allowed here. Using numbers here will not match the criteria.

BB: Country abbreviation of the bank. These two BB characters are used according to ISO 3166-1 alpha-2. For Vietnamese banks, these 2 characters are always Vietnamese. So, when looking at the Swift Code code, and seeing the 5th and 6th position has the word VN, it shows that the bank is in Vietnam.

CC: Local identification code. In these 2 characters, both numbers and letters are allowed. The specified CC code is usually VX.

DDD: Code identifying the participating bank or bank branch. In these 3 characters, both numbers and letters are allowed.

So basically, a Swift Code (BIC) in Vietnam is in the form AAAAVNVXDDD.

Why do we need to use Swift Code?

Swift Code is a very important thing that you are indispensable when receiving or transferring money internationally. Because when receiving money from abroad, normally you will be asked to enter information such as: “Account Name, Account Number, Bank Name and Swift Code Code of that bank”. In it, the bank name you should fill in English and the Swift Code code fill in corresponding to the above table.

And as mentioned above, the Swift Code code will help you easily know what the name of the bank is, in which country, what branch, what is the address? And if the transfer is wrong, you can use it to have the bank transfer you the money.