SWIFT vs IBAN: what’s the difference?

If you’ve ever asked yourself, “Is IBAN number the same as SWIFT code?,” this article was created just for you. 

In this article, Genome’s team explains the difference between IBANs and SWIFT codes and elaborates on why you will need at least one of these to make common money transfers inside Europe and beyond. 

What is a SWIFT code?

An integral part of the SWIFT messaging system established by the Society for Worldwide Interbank Financial Telecommunication, a SWIFT code contains specific data for making financial transactions. Its original name was BIC (bank identifier code/business identifier code), and the name SWIFT code only came into existence because of the vast usage of BIC numbers in the SWIFT system. The SWIFT code consists of numbers and uppercase Latin letters, which contain the information needed to instruct a transfer, such as a particular bank, country, bank code, two-digit location code, and branch code.

SWIFT network is one of the oldest, internationally recognized, and most reliable systems for international transfers that most banks use. Here’s what you need to understand how the SWIFT (BIC) code works.

1. To identify the recipient’s bank, when a person or company sends money abroad, the bank uses the SWIFT network to ensure the payment reaches the correct institution.

2. To do that, banks communicate using SWIFT messages to confirm payment details before transferring funds. In this case, the SWIFT code identifies the correct recipient.

3. And last but important is the scaling – the SWIFT system connects over 11,000 financial institutions across more than 200 countries.

Here are some real examples of when a SWIFT code is required:

• Cross-border payments outside the SEPA zone. If you live in one of the European countries, you likely do operate with euro, so when you need to send money to the U.S., China, or any non-SEPA country, your bank will require the recipient’s SWIFT code to process the transaction.

• Receiving international payments. If you expect funds from overseas banks, the sender must know your account number and the bank’s SWIFT code to complete the transfer.

• Multi-currency business transactions. Companies making international supplier payments or receiving funds from global clients use the SWIFT/BIC code for seamless work. SWIFT supports the world’s most common and popular currencies, gradually simplifying online banking for international trade.

What is an international bank account number (IBAN)?

An IBAN stands for international bank account number and is a standardized system that allows identifying the correct account of the beneficiary. It’s a number that facilitates financial transactions so that the funds will settle in the right recipient’s individual bank account. 

IBAN can consist of up to 34 symbols, including digits and Latin uppercase letters. With the help of this code, you can get such information as one’s bank account number (there are no two same account numbers in the world), the country, and the bank of the payee or payer.

IBANs were created to harmonize payment processes and reduce errors in international transactions, particularly within the SEPA zone. Before IBAN codes, cross-border payments were prone to errors due to varying national account formats.

Each IBAN contains:

1. Two-letter country code (e.g., DE for Germany, FR for France).

2. Check digits to validate the IBAN.

3. The bank identifier and account number (the basic bank account number). They are formatted according to the country’s banking rules.

IBAN has a reputation for being used widely across Europe. Still, it has been implemented and used in 80+ countries worldwide, including all SEPA member states and many countries outside Europe. The reasons for this:

• SEPA transfers: Sending euros within Europe requires an IBAN, ensuring the transaction is routed correctly without delays to each individual account.

• Automatic validation: Before processing a transfer, banks verify the IBAN’s structure, reducing the risk of sending funds to the wrong account.

• Standardized cross-border business payments: Companies across Europe use IBANs to streamline supplier payments, avoiding manual errors and bank rejections.

IBAN vs. SWIFT: key differences

SWIFT code/BIC and an IBAN number differ in their length. A SWIFT code can have either 8 or 11 symbols, while the second one can be of any length up to 34 characters. It’s important to remember that both of them also show the bank’s country code. In a SWIFT/BIC code, the country code is the 5th and the 6th characters, but in an IBAN number – the first two accordingly. As an example: 

• SWIFT number: HBUKGB4BXXX – Great Britain

• IBAN: GB 29 NWBK 601613 31926819 – Great Britain

The core difference between SWIFT and IBAN is that the SWIFT code identifies the bank and the bank branch. If this information is missing, the last 3 characters of the number will be removed (only 8 symbols) or written as XXX (11 symbols), as you can see in the example of the SWIFT number format above. 

IBAN also locates the country and the bank. However, this code provides details on the bank’s exact account number, which is unique for every holder. Depending on the country, the length of the IBAN varies.

SWIFT code is used worldwide by over 200 countries and 11,000+ financial institutions. It is essential for international wire transfers and cross-border banking transactions. It is required for bank transfers in countries outside the SEPA zone, such as the U.S., Canada, China, and Australia.

Meanwhile, the IBAN is primarily used in SEPA countries. It is standardized for payments in Europe, covering all SEPA (Single Euro Payments Area) countries. IBAN is also adopted in parts of the Middle East, Africa, and Latin America (e.g., UAE, Saudi Arabia, and Brazil). However, it is not used in major economies like the U.S., Canada, or China.

Which one do I need for international payments?

IBAN and SWIFT codes are the key requirements for sending and receiving money internationally. Only IBAN codes are typically needed if you pay within the SEPA zone (e.g., Germany to France or Spain to Italy). SEPA payments follow standardized formats.

Example. If someone needs to send money in euros from Italy to another account in Spain, the recipient’s IBAN number is enough.

A SWIFT code is almost always required to identify the recipient’s bank for payments to non-SEPA countries (e.g., the US, Canada, China, or India).

Example. If a company, let’s say, from the UK, is paying a supplier in the US, it will require the supplier’s SWIFT code AND account number (since the US doesn’t use IBAN).

If a non-SEPA bank (like one in Canada) transfers funds to a SEPA-based account (e.g., in France), the sender must provide both the IBAN and the SWIFT code.

Example. A Canadian wants to send money to his family in France. In this case, the recipient’s IBAN number (to direct the payment) and the SWIFT code (to route it through international banking systems) will be required.

Many places outside Europe, such as Brazil, Saudi Arabia, Izrael, and Egypt, use IBAN but still require a SWIFT code for an international money transfer.

Example. A German expat in Brazil wants to send money from Germany to his new bank where he currently works. In this case, he will need an IBAN number (since Brazil follows IBAN standards) and the SWIFT/BIC code (since the payment is outside SEPA).

Tips for using SWIFT and IBAN safely

• Verify SWIFT and IBAN codes before sending payments. It may sound too obvious, but errors in account details can cause payment delays, rejections, or even lost funds.

• Double-check details with payees to prevent fraud. The best way to check out a BIC code or IBAN is to confirm payment details directly with the payee. Watch out for red flags: Unexpected payment requests, last-minute online banking detail changes, or urgent pressure to send money are warning signs of scams.

• Store and share bank details securely. Do not save IBAN and SWIFT codes in unprotected documents or notes on your phone or PC. If you need it, use your bank app. Also, try to avoid sharing IBAN or SWIFT details on social media.

Why it matters for businesses

Misunderstanding the difference between the SWIFT messaging network and IBAN can lead to payment errors, delays, and unnecessary fees; what may be unpleasant for a person would be very impactful for businesses. For instance, if you send money from outside SEPA (e.g., from the US to Germany) but only provide an IBAN, the transaction may fail because the SWIFT code is missing.

If your business requires a reliable financial institution that offers both SEPA and SWIFT transfers to send payments to other European countries and overseas, why not try Genome? We are an electronic money institution licensed and supervised by the Bank of Lithuania. By starting a business wallet inside Genome, you get access to:

• A dedicated EUR IBAN account, plus access to instant opening of additional multi-currency accounts in 11 currencies: EUR, USD, GBP, PLN, CHF, JPY, CAD, CZK, HUF, SEK, and AUD. 

• SEPA Credit Transfers for regular euro payments, as well as SEPA Instant Transfers – available 24/7 and completed within seconds.

• International SWIFT transfers that are equipped with an Intelligent Routing System. Available in 11 currencies listed above, you can send and receive international transfers from over 40 countries. Just check if your company is eligible.

• Batch transfers to send up to 3000 payments at once using SEPA Credit and Instant Transfers.

• Physical and virtual debit Visa cards for in-store, online, and contactless business payments. Cards can be linked to accounts in EUR, USD, GBP, PLN, CHF, CZK, HUF, and SEK.

Final thoughts

So, what’s the difference between IBAN and SWIFT? Here is a small recap of all we have been talking about. As you can see, besides the differences, each system has its purposes.

Code type	SWIFT	IBAN
Purpose	Identifies a specific bank worldwide.	Identifies a specific bank account within a bank.
Geographical use	Global (200+ countries).	Mostly SEPA + other regions (80+ countries).
Format	8 or 11 characters (letters + numbers).	Up to 34 characters (varies by country).
When used	International bank transfers.	SEPA and some international transfers.

By understanding when to use SWIFT and IBAN, businesses and individuals can improve cash flow, avoid unnecessary fees, and operate more effectively across borders.

FAQs

Can I use an IBAN if I’m transferring money outside of Europe?

Yes, IBANs can be used for international payments outside of Europe, but only in countries that have adopted the IBAN system. However, if you’re transferring money to a country that doesn’t use IBAN, a SWIFT code will be required instead.

Is a SWIFT code always needed for non-euro transactions?

A SWIFT code is typically needed for non-euro international transactions, especially when transferring money outside the SEPA zone. The SWIFT code identifies the recipient’s bank and ensures the transaction is routed correctly. Even if a country uses IBAN for account identification, the SWIFT code is necessary for cross-border payments.

What if I have both a SWIFT and an IBAN for the same account?

If you have both a SWIFT code and an IBAN for the same account, you may need to provide both, depending on the destination country and the payment system.

How can I tell if my IBAN or SWIFT code is valid?

Use IBAN validation tools provided by banks or third-party services to check if the IBAN is correctly formatted. You can also verify it through the recipient’s bank. You can verify the SWIFT code using the official SWIFT directory or by confirming the code with the recipient’s bank.

Do SWIFT and BIC codes mean the same thing?

Yes, the SWIFT code and BIC (Bank Identifier Code) are often used interchangeably. They both refer to the same code that identifies a specific bank during an overseas transfer. SWIFT is the network that facilitates the transfer, and BIC is the code that identifies the bank.

Why do some countries not use IBANs?

Some countries, including the U.S., Canada, and Australia, don’t use IBANs because they have different systems for identifying bank accounts, such as a SWIFT code and a national bank code/branch code, to process international payments. Countries may also not use IBANs because they just don’t need it.