When international money is sent, a SWIFT code is may required to tell the bank or money order where to send the money. With the SWIFT code, banks and money transfer services determine where to send money on a global scale. The SWIFT code is an international code.
Society for Worldwide Interbank Financial Telecommunications (SWIFT) provides safe and secure financial transactions to their members. SWIFT was founded in Brussels in 1973. At the time of its establishment, it was supported by 239 banks in fifteen countries. SWIFT has evolved since 1973, and as of 2018, nearly half of the high-value cross-border payments worldwide have used the SWIFT network. As of 2015, SWIFT has linked more than 11,000 financial institutions in more than 200 countries and regions. SWIFT sends payment orders that need to be resolved with correspondent accounts owned by each other.
SWIFT is a cooperative society owned by member financial institutions and has offices around the world, according to Belgian law. Prior to SWIFT, companies were communicating with Morse code messages sent by telegraph. SWIFT has created a safer and faster communication mechanism between financial institutions. It contains about 200 kinds of SWIFT messages. For example, the standard payment order from one organization to another is known as MT103. In addition, in many countries, AML / CFT regulations express MT103 as the main method of international payments in particular.
SWIFT is a huge messaging network used by financial institutions such as banks to send and receive money transfer orders or information quickly, securely, and accurately. SWIFT realizes the messaging network through a standard code system. SWIFT assigns a unique code of eight or 11 characters to each financial institution. The code is alternately called bank identification code (BIC), SWIFT code, SWIFT ID, or ISO 9362 code. The codes are assigned according to the rules below.
Anyone who transfers money from international lines must use a SWIFT / BIC code because banks and money transfer services determine where to send money on a global scale. Since the SWIFT / BIC code is a national code, a bank on one side of the world can find the right bank on the other side of the world. Bank transfers using the SWIFT system usually pass through 1-3 intermediary banks, each of which may charge a fee. International transfers between transfer fees, significant exchange rates, and brokerage fees can really increase.
Although SWIFT is related to Treasury transactions when it is established with the broad message system it provides, it has been developing gradually and serves many sectors today. Some of these sectors are:
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