SWIFT vs IBAN: What's the Difference?

Key takeaways

• A SWIFT code identifies a bank; an IBAN identifies one account at that bank.
• Payments to Europe, the UK and much of the Middle East usually need both, while the US and India do not use IBANs at all.
• A SWIFT code is the same thing as a BIC, but it is not the same as an IBAN.
• Indian businesses give overseas clients their account number, the bank's SWIFT code, IFSC and bank address instead of an IBAN.
• If less arrives than you invoiced, intermediary bank fees are usually the reason; agreeing OUR or SHA charges with the client limits them.

A SWIFT code identifies a specific bank or branch anywhere in the world, while an IBAN (International Bank Account Number) identifies a single account at that bank. Think of the SWIFT code as the address of the bank's building and the IBAN as the exact flat number inside it: one gets the payment to the right bank, the other to the right account.

So the swift vs iban question is about scope: most international wires use a SWIFT code, but only countries in the IBAN system give their accounts an IBAN.

A SWIFT code and a BIC are the same thing. BIC stands for Business Identifier Code, and SWIFT, the network that runs the system, issues and registers it, so banks use the two names interchangeably.

A SWIFT code and an IBAN are not the same. The SWIFT code points to the bank and the IBAN points to your account within it; outside SEPA, the EU's euro payment area, an IBAN does not replace the SWIFT code.

An IBAN and an account number are related but not identical. An IBAN contains your local account number, plus a country code, check digits and usually a bank code, so the account number is only part of it.

A quick test: if the code is 8 or 11 characters and starts with four letters for the bank, it is a SWIFT code or BIC. If it starts with a two-letter country code followed by two digits and runs to 15 characters or more, it is an IBAN.

A SWIFT code has 8 or 11 characters in four parts. Take HDFCINBBXXX:
1. HDFC: the bank (HDFC Bank).
2. IN: the country (India).
3. BB: the location (Mumbai).
4. XXX: the branch; XXX or no branch code means the head office.

An IBAN starts with a two-letter country code and two check digits, followed by the domestic bank and account details, so its length depends on the country:

• United Kingdom, 22 characters: GB29 NWBK 6016 1331 9268 19, which includes the bank code, sort code and account number.
• Germany, 22 characters: DE89 3704 0044 0532 0130 00, with the bank code (BLZ) and account number.
• United Arab Emirates, 23 characters: AE07 0331 2345 6789 0123 456, with a 3-digit bank code and 16-digit account number.
• India: no IBAN; the account number, IFSC and the bank's SWIFT code are used instead.

Indian banks have SWIFT codes, for example SBININBB for State Bank of India and ICICINBB for ICICI Bank, but no IBANs. To look up a bank's code, use our swift code finder.

Before paying a supplier abroad, check their IBAN with an iban checker, which tests the check digits and length for that country.

You need both when you send money to an account in a country that uses IBANs, such as the UK, an EU country or the UAE. You need only the SWIFT code and the local account details when the receiving country does not use IBANs, such as India, the US or Australia.

Do you need a SWIFT code if you have an IBAN? Within SEPA, euro transfers can go on the IBAN alone. For payments from outside SEPA, banks still ask for the SWIFT code. Countries that do not use IBANs include the US, Canada, Australia, New Zealand, China, Japan and India; about 89 countries use them.

No. India does not use IBANs, so when a client in Europe, the UK or the UAE asks for yours, send these details instead:

• Beneficiary name, exactly as it appears on your bank account
• Your account number
• Your bank's SWIFT code (8 or 11 characters)
• Your branch IFSC
• Your bank's name and address, and the invoice currency

If the client's banking app insists on an IBAN, ask them to choose an international or SWIFT payment rather than a SEPA transfer; that form accepts an account number and SWIFT code. The payment then travels as a SWIFT wire and may pass through one or more correspondent banks before reaching India.

Each intermediary can deduct a fee, which is why less sometimes arrives than you invoiced. The client chooses who pays these charges: OUR (the sender pays all), SHA (shared) or BEN (you pay all). Agree OUR or SHA on the invoice.

When the payment arrives, tell your bank the right purpose code, such as P0802 for software services or P0806 for business consulting, and ask the client to put your invoice number in the payment reference; see rbi purpose code for inward remittance.

Once the money arrives, your bank or payment provider issues a FIRA as proof for GST and tax records. Another option is a local account in the client's currency, so a European or UK client pays you as a domestic transfer instead of a SWIFT wire; Xflow's receiving accounts, for example, give clients local account details and settle INR to your Indian bank account with a FIRA.