SWIFT Money Transfer Guide for Exporters

SWIFT Money Transfer Guide for Exporters
Anoosh Kotak12 April 2024

Efficient cross-border transactions are essential for exporters to maintain uninterrupted cash flow and expand their global reach. Although there are multiple payment systems that facilitate international money transfers, their effectiveness relies on a critical framework called a messaging system.

In banking, SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications. It serves as a messaging system enabling money transfers between banks across national borders. Exporters leverage SWIFT to send and receive card or electronic payments to and from different bank accounts.

It is important to note that SWIFT is not a banking system or financial institution that moves money from one bank account to another. Rather, it is a payment messaging system that sets up the framework for the money to be moved between the two bank accounts. 

Banks and financial institutions partner with SWIFT to utilise its payment messaging system. Currently, 11,000 banks and financial institutions are members of SWIFT, facilitating over $150 trillion in transactions annually. 

How Does SWIFT Work: The Anatomy of a SWIFT Code

SWIFT works by assigning specific codes to each member organisation, which contain specific information about the sender, receiver, and intermediary banks involved in a transaction. Here's a breakdown of a typical SWIFT code, which is either 8 or 11 characters long:

Breakdown of a SWIFT code
  • The Bank Code (4 letters): The first four characters of a SWIFT code represent the institution's unique identifier. They could be letters or numbers, such as "BARC" for Barclays Bank or "HSBC" for HSBC Bank. 
  • The Country Code (2 letters): The next two characters represent the country where the institution is located. For example, "CA” for Canada, GB" for the United Kingdom, or "FR" for France.
  • The Location Code (2 letters or digits): Next are two characters that identify the institution's location within the country. They can be letters or numbers and may denote a specific city or region. For instance, "LX" for Luxembourg, "NY" for New York, or "SG" for Singapore.
  • The Branch Code (optional—3 letters or digits): If the institution has multiple branches in the same location, it helps direct the transaction to the correct branch. As this code is optional, not all SWIFT codes include the branch code, making them 8 characters long instead of 11. 

Examples Of SWIFT Code 

Here is the breakdown of two SWIFT codes for a better understanding: 

SBININBB101: This code refers to the State Bank of India’s Mumbai office. "SBIN" is the bank code, "IN" stands for India, "BB" indicates Mumbai, and "101" denotes the branch in a specific locality.   

Example Of SWIFT Code

DEUTDEFF500: This SWIFT code belongs to Deutsche Bank's Frankfurt branch in Germany. "DEUT" represents the bank, "DE" is for Germany, "FF" signifies Frankfurt, and "500" might indicate a specific branch within Frankfurt.  

Breakdown of SWIFT Code
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