Have you ever wondered what the acronyms IBAN and SWIFT mean? Or maybe the article about the SWIFT system made you curious about the banking system? If the answer to either question is yes, you should definitely read this article.
To be able to explain you the differences and meaning of the acronyms IBAN and SWIFT, you first have to understand how international money transfers work. Let's suppose you have earned $1,000 on Paidwork.com. You want to buy yourself a computer, go on vacation or invest that money in silver or gold. Before you do that, however, you need to somehow transfer it. This is what the SWIFT is used to- to transfer money between two foreign banks. And what is the procedure for transferring money from account to account?
- The sender, or in our case Paidwork, orders a transfer of $1,000 to the recipient.
- The bank where Paidwork has an account collects multiple transfers into one large package, making them cheaper. Can you imagine what would happen if each transfer was billed separately?
- To make sure no one gets confused, each transaction is properly labeled, because we need to know where your $1,000 is going to go
- To simplify the procedure, just like with courier companies, the world is divided into -regions. Deutsche Bank operates only in Central Europe, especially Germany, and Lloyds Bank serves customers mainly in the UK. Each bank in the SWIFT system, and there are more than 11,000 of them, has its own special SWIFT/BIC code. By default, it is 8 letters referring to the bank's name, although this does not have to be the case. BIC codes of some banks consist of 11 letters.
- The bank handling Paidwork already knows that $1,000 needs to be sent to the bank where you have an account. However, how does it know that it needs to be sent to you exactly? That's what the IBAN number is for, consisting of a country designation and digits. The length of the IBAN number ranges from 15 characters (Norway) to 32 characters (Saint Lucia) and is used to identify the recipient's account.
- A few days after sending the transfer ( 1 to 3 days) you receive the money in your account.
What do the abbreviations IBAN and SWIFT mean?
SWIFT - Society for Worldwide Interbank Financial Telecommunication.
IBAN - International Bank Account Number.
Unfortunately, SWIFT has one disadvantage-it is quite expensive. In some cases, the transfer of money can be charged with a fee of $60! It is necessary to pay attention to this so that as much of the money you earn goes to you as possible. And if you are wondering if PayPal is a good alternative to SWIFT, be sure to read THIS article. You will find here all the necessary information about this system.
What if...
What if you are not sure what SWIFT/BIC code your bank or the bank of the recipient of the transfer has? Fortunately, on the Internet you can easily find tools that will help you determine it. A good choice would be the SWIFT checker on this page.
What if you are not sure about the IBAN code? While the standard is your standard account number with the country abbreviation added at the beginning, and your bank's mobile app should clearly show the IBAN number, you can use this page to be sure.
What if there is a mistake? If the SWIFT code is incorrect, the recipient will be charged extra and the payment will take longer. If the IBAN number is wrong, the transfer will take much longer, or, more likely, the funds will return to the sender after a few days. That's why bank account number checker, swift checker and IBAN checker are very useful tools.
Now that you know everything, it's time to make money together with Paidwork! And if you don't know how you can make money from home, be sure to take a look here.
