What Is SWIFT and The Role of SWIFT or BIC Codes in Payments

SWIFT is the global financial messaging network that banks and financial institutions use to send international payment instructions safely and consistently. 

Every institution on that network carries a SWIFT code, also called a BIC (Bank Identifier Code), which identifies exactly which bank and branch a payment is going to. Together, SWIFT and BIC codes are what ensure international payments reach the right account. 

Here’s everything you need to know.

What Is SWIFT?

SWIFT is an acronym for the Society for Worldwide Interbank Financial Telecommunication. It’s a global, member-owned cooperative that runs a secure messaging network connecting banks and financial institutions worldwide.

Financial organisations use the SWIFT network to transmit payment information and instructions, following a standardised set of protocols. 

SWIFT doesn’t move money. It moves the instructions that tell banks how money should move. The actual transfer of funds happens separately, through the correspondent banking relationships and settlement systems that sit behind the message.

That’s why banks and financial institutions rely on it – it gives every international wire transfer a common, machine-readable language, regardless of which two countries or currencies are involved. 

Each institution connected to the network is assigned a unique SWIFT code (also known as a BIC, SWIFT ID, SWIFT number, or ISO 9362 code), which the system uses to route every message to the correct destination.

Why SWIFT Exists

Before SWIFT, international transactions were sent over Telex – a manual system of typed, free-form messages. 

Telex worked, but it lacked speed and structure. Anyone could describe a payment however they liked, in whatever order, and the receiving side had to interpret it by hand. That inconsistency led to regular mistakes and delays.

SWIFT was built to fix exactly this problem. 

It introduced formatted, standardised codes in place of free text, removing the guesswork and misinterpretation that came with Telex. The result was a shared “language” for cross-border payments – one that any connected bank, anywhere, could read and process the same way, with a level of security that Telex was never designed for.

How SWIFT Works

At its core, SWIFT connects a sender’s bank to a recipient’s bank through a chain of secure messages. 

The building blocks are:

• Sender bank – initiates the SWIFT message once a payment is authorised.
  
• SWIFT messages – standardised instructions containing the payment amount, currency, and recipient details.
  
• Correspondent/intermediary banks – where the sender’s and recipient’s banks have no direct relationship, one or more intermediary banks pass the message (and eventually the funds) along the chain.
  
• Recipient bank – receives the message instructing it to credit the beneficiary’s account.
  
• Verification and security – every bank in the chain checks and validates the message before passing it on, protecting the payment data at each step.

This structure is what allows SWIFT to connect over 11,500 banks and financial institutions across more than 200 countries and territories, without every pair of banks needing a direct relationship with one another.

How a SWIFT Payment Works

Step by step, a SWIFT payment follows this journey:

• Payment initiated – the sender authorises a transfer with their bank.
  
• SWIFT message generated – the sending bank creates a message containing the payment details and SWIFT/BIC codes for both parties.
  
• Message transmitted – the message travels through the secure SWIFT network to the recipient’s bank.

Intermediary banks participate, if required, when the sender’s and recipient’s banks don’t hold a direct relationship.

The recipient bank receives instructions and runs its own checks on the incoming message.

Funds credited to the beneficiary’s account, and confirmation is sent back through the chain.

Every bank in that chain uses the SWIFT messaging system to confirm the payment data is accurate and protected, so funds move across borders as efficiently as the corridor and currency allow.

How to Make a SWIFT Transfer

To send a SWIFT payment, you’ll need to contact your bank or financial institution and provide the essential transfer details. 

Typically, this includes:

• The recipient’s full name and address;
• The recipient’s bank name and account number, or IBAN number where applicable;
• The recipient’s SWIFT/BIC code;
• The transfer amount and desired currency.

Your bank will provide the forms needed to initiate the payment, whether online, by phone, or in branch. 

Once submitted, funds move from your merchant account to your bank’s account for onward processing, with financial crime compliance checks running throughout.

You’ll receive confirmation once the transfer completes, anywhere from a few hours to a few business days later, depending on the destination and the banks involved.

What Is a SWIFT Code?

A SWIFT code is the unique identifier assigned to a financial institution connected to the SWIFT network. 

Its purpose is simple. With thousands of banks worldwide, the system needs a reliable way to identify exactly which institution, and often which branch, a payment instruction is intended for.

Every SWIFT/BIC code sits at the centre of the network’s routing logic. 

Whenever a payment is initiated, the sending bank uses the SWIFT bic finder or SWIFT code checker built into its own systems to validate the recipient’s code before the message is sent, reducing the risk of a payment landing in the wrong place. 

For anyone sending money internationally, knowing how to find your SWIFT/BIC code (usually on a bank statement, in your online banking app, or via your bank’s SWIFT code checker) is one of the first steps in setting up an international transfer.

How to Read a SWIFT Code

The SWIFT code format is consistent everywhere, which is what makes it so useful for automated routing. 

A SWIFT code is 8 or 11 characters long, structured as WWWWXXYYZZZ:

• Characters 1-4 – the institution code – the financial organisation itself
• Characters 5-6 – the country code
• Characters 7-8 – the location or city code
• Characters 9-11 (optional) – the branch code, used to identify an individual branch rather than the head office

Take MPOSGB2L as a real example:

• MPOS identifies myPOS as the institution
• GB is the country code for Great Britain
• 2L is the location code for London
• No branch code is present, so this refers to the head office

Understanding this structure is the fastest way to check a SWIFT code yourself before using it. A mismatched country or location segment is often the first sign a code has been entered incorrectly.

Examples of SWIFT Codes

A few real-world SWIFT code examples show the format in action:

• CHASUS33 – JPMorgan Chase Bank, New York, USA
• MIDLGB22 – HSBC Bank, London, UK
• MPOSGB2L – myPOS, London, UK

These unique identifiers are what let banks worldwide route international wire transfers accurately and securely, minimising errors across the global payments infrastructure.

SWIFT vs BIC: What’s the Difference?

In practice, there is no real difference between BIC vs SWIFT for everyday purposes – the terms are used interchangeably. 

SWIFT is the network and messaging system. BIC (Bank Identifier Code) is the actual code used within that system to identify a financial institution.

Because the two terms describe the same underlying number, a bank might ask you for either your “SWIFT code” or your “BIC code” when setting up an international payment.  You’ll give them exactly the same string of characters either way. 

You can usually find it on a paper or digital bank statement, in your account details online, or through a dedicated SWIFT bic finder tool.

SWIFT vs IBAN

SWIFT/BIC codes and IBAN numbers are often required together, but they identify completely different things:

• A SWIFT/BIC code identifies the specific bank (and often branch) involved in a transaction.

• An IBAN number (International Bank Account Number), on the other hand, identifies the individual account the money is going into.

An IBAN can run up to 34 alphanumeric characters in some countries and is used for both cross-border payments and, within the UK and EU, domestic transactions such as SEPA payments in euros. 

Some international bank transfers into Europe need both pieces of information – the SWIFT/BIC code to route the payment to the right bank, and the IBAN to route it to the right account within that bank.

What Is the Role of SWIFT Codes in International Payments?

SWIFT codes do several jobs at once in every cross-border transaction:

• Routing payment instructions to the correct financial institution, anywhere in its 200+ country network;
  
• Identifying financial institutions precisely, down to branch level where needed;
  
• Reducing payment errors, since a standardised code is far harder to misinterpret than a written bank name and address;
  
• Supporting cross-border transactions between banks that have no direct relationship, via correspondent banking;
  
• Improving transaction security, by giving every bank in the chain a verifiable, checkable reference for who they’re dealing with.

For UK businesses trading internationally, using SWIFT codes correctly is one of the simplest ways to avoid the most common (and costly) cause of delayed payments – an incorrect or mistyped bank identifier.

How Long Do SWIFT Payments Take?

How quickly a SWIFT payment arrives depends on how directly the sender’s and recipient’s banks are connected. 

Where two banks have a direct relationship, payments can complete in a matter of hours. 

Where one or more correspondent or intermediary banks are involved, each additional hop can add processing time. Where currency conversion is required, that can add a further delay while the exchange is completed.

The network itself has gotten considerably faster in recent years. 

SWIFT’s own data now shows that around 90% of cross-border payments reach the beneficiary’s bank within an hour, and roughly three-quarters arrive within 10 minutes of being sent.

In practice, most UK international transfers still take between a few hours and five business days to reach the recipient, since the final leg can add time even after the SWIFT message itself has arrived.

Typical factors that cause delays include:

• The number of intermediary banks in the payment chain;
• Currency conversion and exchange processing;
• Compliance and sanctions screening checks;
• Public holidays or cut-off times at any bank in the chain.

What Does a SWIFT Transfer Cost?

A SWIFT transfer rarely has just one fee attached – the total cost usually builds up across several stages:

• Sending bank fees – UK high-stre et banks typically charge somewhere between £0 and £35 for an outgoing SWIFT payment, with in-branch or phone transfers often costing more than online ones.
  
• Correspondent/intermediary bank fees – each intermediary bank in the chain can deduct its own charge, commonly in the region of £5-£20 per hop, before the payment reaches its destination.
  
• Receiving bank fees – the beneficiary’s bank may also apply a charge for handling an incoming international payment, often a few pounds.
  
• Currency conversion charges – this is usually the largest cost of all. Banks often apply an exchange rate margin of 2-4% above the mid-market rate, compared with margins well under 1% at many specialist currency or payments providers.

Fee structures also vary by who’s expected to pay. Some transfers are sender-paid (the sender covers all charges so the full amount arrives), some are shared, and some are recipient-paid (fees are deducted along the way, so the beneficiary receives less than the amount sent). 

It’s worth checking which option your bank or provider is using before sending a significant sum, since it directly affects how much the recipient actually gets.

How SWIFT Is Supervised and Secured

SWIFT is internationally governed and overseen by a group of central banks, including those of Canada, France, Germany, Italy, Japan, the Netherlands, the UK, the US, Switzerland, and Sweden, along with the European Central Bank. 

The National Bank of Belgium acts as the system’s lead overseer, reflecting SWIFT’s headquarters in Belgium.

This oversight structure, formalised through the SWIFT Oversight Forum established in 2012, exists precisely because of how central the network has become to global finance. 

It connects more than 11,500 institutions across 200+ countries and territories, carrying tens of millions of messages every day. 

That scale is exactly why governance, security standards, and resilience matter so much to the institutions and regulators that depend on it.

What Is SWIFT GPI?

SWIFT GPI (Global Payments Innovation) is the framework SWIFT introduced to address longstanding criticisms of cross-border payments.

Namely, a lack of visibility over where a payment was in transit, unpredictable correspondent fees, and slower processing than modern digital payments demand.

Under GPI, every payment is assigned a UETR (Unique End-to-End Transaction Reference), giving both sender and recipient bank real-time tracking of where a payment sits in the chain. 

Fees are also disclosed more transparently at each stage, and settlement confirmation is provided once funds land in the recipient’s account. 

Every GPI-onboarded institution commits to following this framework, which has meaningfully cut the time and uncertainty involved in a typical SWIFT payment process.

The Future of SWIFT

SWIFT’s next major shift is already underway.

The network completed its migration from legacy MT message formats to the ISO 20022 standard in November 2025, giving cross-border payments richer, more structured data than the old free-text format allowed. 

The next milestone follows in November 2026, when SWIFT will require fully structured or hybrid postal addresses on cross-border payment messages, phasing out unstructured address fields entirely.

Beyond this messaging upgrade, SWIFT is expected to keep expanding into real-time payments, broader API connectivity, and continued exploration of blockchain and distributed ledger technology. 

Whatever form these changes take, SWIFT’s underlying role looks set to remain central to international banking for the foreseeable future.

How Businesses Use SWIFT for International Payments

For UK SMEs trading across borders, SWIFT sits quietly behind almost every international payment they send or receive.

In practice, this means:

• Paying international suppliers in their local currency, using their SWIFT/BIC code and IBAN or local account number;
  
• Receiving overseas customer payments into a UK business account, often needing to share your own SWIFT/BIC code and IBAN with customers abroad;
  
• Managing multi-currency operations, where a business holds or converts several currencies to reduce the cost and friction of frequent international transfers;
  
• Managing cross-border cash flow, factoring in the fact that international wire transfers can take longer to clear than domestic payments, and building that into invoicing and payment terms.

For growing UK businesses, choosing the right combination of business account, IBAN, SWIFT/BIC code, and international payment solution can make a real difference to how efficiently international cash flow is managed. 

myPOS supports UK businesses with the tools to send and receive international payments alongside everyday card and online payment processing. This helps keep global transactions and everyday takings managed from one place.

Conclusion

Overall, SWIFT and BIC codes are the identifiers that make that routing possible, working alongside IBANs to pinpoint both the right bank and the right account.

As international payments continue to get faster, more transparent, and more standardised, the network remains the backbone of global banking. 

For UK businesses sending money internationally, understanding how SWIFT codes work, what a transfer costs, and how long it typically takes is the difference between a smooth international payment and an unwelcome surprise.

Frequently Asked Questions

How do SWIFT messages differ from SEPA for cross-border payments?

SWIFT is a global messaging network used for international payments worldwide, while SEPA is designed for euro payments between participating European countries and is typically faster and cheaper.

Can my SME use SWIFT for domestic payments within the UK?

SWIFT is mainly used for international transfers. Most UK domestic payments are processed through Faster Payments, Bacs, or CHAPS instead.

What are common SWIFT message types relevant for B2B transactions?

Common message types include MT103 for customer payments, MT202 for bank-to-bank transfers, and MT940 for account statements.

What’s the typical cost structure for SWIFT transfers for SMEs?

Costs usually include your bank’s transfer fee, potential intermediary bank charges, and currency conversion fees if exchanging currencies.

How can I track the status of an international SWIFT payment?

Your bank can track a SWIFT payment using its unique transaction reference, often called a UETR (Unique End-to-End Transaction Reference).

Are there faster alternatives to SWIFT for urgent international transfers?

Yes. Some banks offer SWIFT gpi for faster tracking and processing, while specialist international payment providers may provide quicker and more cost-effective transfers for certain destinations.