IBAN vs. SWIFT: Understanding the key differences

Ever sent money to someone in another country? If so, you've probably encountered those strings of letters and numbers known as IBAN and SWIFT codes. These banking codes might seem like just another annoying detail to track down before hitting "send" on your transfer, but they're actually the backbone of international banking.

Think of them as the addresses and routing systems that ensure your money reaches its intended destination rather than disappearing into the global financial system. While both codes help direct international payments, they serve different purposes and work in different ways.

Whether you're paying international contractors or managing global payroll, understanding the difference between IBAN and SWIFT codes will help you avoid delays, reduce errors, and make international transfers smoother. Let's break down what these codes are, how they work, and when you need to use each one.

What is an IBAN number?

IBAN stands for International Bank Account Number. It's a standardized numbering system specifically designed to identify individual bank accounts for international payments. 

Introduced in the 1990s to simplify cross-border transactions in Europe, IBAN has since expanded to over 85 countries worldwide. The system reduces payment errors by including check digits that validate the account information before a transaction is processed. This validation helps catch common mistakes like typos or transposed numbers before they cause payment failures.

An IBAN doesn't replace your regular account number, instead, it's an additional identifier used specifically for international transfers. Your domestic account number is actually embedded within your IBAN, along with other identifying information.

IBAN number example

An IBAN can contain up to 34 alphanumeric characters, though the length varies by country. Each IBAN follows a structured format that includes:

• A two-letter country code (e.g., DE for Germany, GB for United Kingdom)
• Two check digits that help validate the account number
• A basic bank account number (BBAN), which includes the bank code and account number

Here's an example of a German IBAN: DE89 3704 0044 0532 0130 00

Breaking this down:

• DE: Country code for Germany
• 89: Check digits
• 3704 0044 0532 0130 00: The BBAN, containing the bank code and account number

Where to find your IBAN number

If you need your IBAN for an incoming international transfer, here are the most common places to find it:

• Bank statements: Most banks include your IBAN code on your regular account statements, either print or electronic. Look for it near your account number, often in a section labeled "For international money transfers" or something similar.
• Online banking portal: Log into your online banking account and navigate to your account details. Many banks have a specific section for international banking information where your IBAN is displayed.
• Mobile banking app: Similar to online banking, most mobile apps show your IBAN in the account details section.
• Bank card: Some banks print the IBAN directly on the back of debit cards, though this is less common.
• Contact your bank: If you can't find your IBAN through the above methods, contacting your bank's customer service is the most reliable approach. They can provide your IBAN and any other information needed for international transfers.

Remember that not all countries use the IBAN system. If your bank is in a country that doesn't use IBAN code (like the United States), you won't have one.

What is a SWIFT code?

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. Despite what the name might suggest, a SWIFT code isn't actually a payment method. Instead, it identifies banks in the global SWIFT network, which is essentially a secure messaging system that financial institutions use to communicate with each other.

When you send money internationally, the network carries the instructions from the sending bank to the receiving bank. The SWIFT code ensures your payment instructions reach the correct financial institution.

The SWIFT network connects more than 11,000 financial institutions across 200+ countries and territories, making it the primary system for international banking communications. It's been operating since the 1970s.

Unlike IBAN codes, which identify a specific account, a SWIFT code identifies a specific bank or even a particular branch of that bank. It's more about helping banks talk to each other than pinpointing an individual account.

SWIFT code example

SWIFT codes (also called BIC or Bank Identifier Codes) consist of 8 or 11 alphanumeric characters and follow this structure:

• 4 characters: Bank code (letters)
• 2 characters: Country code (letters)
• 2 characters: Location code (letters or numbers)
• 3 characters: Branch code (optional, letters or numbers)

Here's an example of a SWIFT code for Deutsche Bank in Frankfurt, Germany: DEUTDEFF

Breaking this down:

• DEUT: Bank code for Deutsche Bank
• DE: Country code for Germany
• FF: Location code for Frankfurt

If the SWIFT code included a branch code, it would be 11 characters long, like: DEUTDEFF500

Where "500" specifies a particular branch in Frankfurt.

Other examples of SWIFT codes include:

• CHASUS33 (JPMorgan Chase Bank in New York, USA)
• BARCGB22 (Barclays Bank in London, UK)
• BNPAFRPP (BNP Paribas in Paris, France)

Where to find your SWIFT code

If you need to provide your bank's SWIFT code to someone sending you money, here's where to look:

• Bank statements: Many banks print their SWIFT code on regular account statements, often in the same area as other account details.
• Online banking: Log into your online banking portal and look for a section on international transfers or bank details. The SWIFT code is typically listed alongside your account number and routing information.
• Bank's website: Most banks list their SWIFT codes on their websites, usually in the international banking or wire transfer sections. Some have dedicated SWIFT code lookup tools.
• Branch information: For larger banks with multiple SWIFT codes for different branches, you might need to know the specific branch where your account is held.
• Contact the bank: If you're unsure which SWIFT code to use, contact your bank directly. This is especially important for larger banks with multiple codes, as using the wrong code could delay your transfer.

SWIFT codes are more universally used than IBANs, so virtually all banks that handle international transfers will have a SWIFT code, regardless of whether they're in countries that use the IBAN system.

IBAN vs. SWIFT: Key differences

Understanding the differences between IBAN and SWIFT is crucial for smooth international transactions. Here's how they compare:

Purpose and functionality

IBAN identifies a specific bank account, providing the exact destination for funds. It's like the full address (including apartment number) for your money.

SWIFT, on the other hand, identifies a bank or branch within the global banking network. It doesn't specify an account—it's more like identifying which post office handles mail for a certain area. SWIFT codes facilitate communication between financial institutions, whereas IBANs direct the actual money to specific accounts.

Geographic availability

IBAN is used in over 85 countries, primarily in Europe, the Middle East, and parts of the Caribbean and Latin America. Notable countries using IBAN include all European Union members, the UK, Switzerland, and Turkey.

SWIFT is much more global, used by over 11,000 financial institutions across more than 200 countries and territories. It's the standard in countries that don't use IBAN, like the United States, Canada, Australia, and most of Asia.

Structure and format

IBANs vary in length by country (up to 34 characters) and include a country code, check digits, and the basic bank account number. The structure is specifically designed to reduce errors through validation.

SWIFT codes are more uniform, always consisting of 8 or 11 characters that identify the bank, country, location, and optionally, a specific branch. They don't include any account information or validation mechanisms.

Role in financial transactions

IBAN provides the direct route for funds to reach a specific account. When making a transfer to an IBAN-using country, the IBAN is usually sufficient for the money to reach its destination.

SWIFT facilitates the communication between banks about the transaction. It ensures the sending bank can securely transmit payment instructions to the receiving bank, but additional information (like an account number or IBAN) is needed to complete the transaction.

Requirement for international transfers

Whether you need an IBAN, a SWIFT code, or both depends on:

• The countries involved in the transfer
• The banks' requirements
• The type of transfer

For transfers to IBAN-using countries, you typically need both the recipient's IBAN and their bank's SWIFT code. For transfers to non-IBAN countries, you'll need the recipient's account number and their bank's SWIFT code, plus possibly other local identifiers.

Transaction speed and accuracy

IBAN enhances accuracy through its check digits and standardized format, which helps reduce errors and failed money transfers. When used correctly, this can speed up processing times.

SWIFT doesn't have built-in validation, but the network provides a secure and reliable communication channel. Transfers using only SWIFT (without IBAN) might require additional verification steps, potentially making the process slower.

Cost implications

Neither IBAN nor SWIFT directly costs anything to use, but they can affect transfer fees indirectly. Transfers to IBAN countries can sometimes be processed more efficiently (and therefore more cheaply) because the standardized format reduces manual intervention.

SWIFT transfers sometimes involve intermediary banks, each potentially charging fees. The more complex the route your money takes through the SWIFT network, the more expensive the transfer can become.

When to use IBAN vs. SWIFT

Knowing when to use each code saves time and prevents payment failures. Here's a practical guide:

Use IBAN when:

• Sending money to countries that use the IBAN system, primarily in Europe, the Middle East, and parts of the Caribbean.
• Making SEPA (single euro payments area) transfers within Europe.
• Your bank or payment provider specifically requests an IBAN.

Even when sending to IBAN countries, you might still need the recipient's bank's SWIFT code alongside their IBAN code for complete routing information.

Use SWIFT when:

• Sending money to countries that don't use IBAN, like the US, Canada, Australia, and most Asian countries.
• You need to identify a specific bank, but don't yet have account details.
• Making transfers where the sending or receiving bank requires it (which is most international transfers).

For many international transfers, especially those involving non-IBAN countries, you'll need the recipient's account number and their bank's SWIFT code, plus possibly other local identifiers like routing numbers in the US.

Best practice: Ask the recipient what's required. Different banks and countries have different requirements, so the safest approach is to ask the recipient exactly what information their bank needs to receive an international payment.

How Rippling simplifies global payroll and payments

Managing international payments—whether for global payroll, vendor payments, or expense reimbursements—involves navigating the complexities of IBAN, SWIFT, and other country-specific banking requirements. Rippling streamlines this process through its integrated global payment solutions.

Rippling's global payroll system automates international payments while ensuring compliance with local banking standards. The platform handles the technical details of routing payments correctly, whether to IBAN or non-IBAN countries, removing the burden of managing these complex banking codes from your finance team.

For businesses operating across multiple regions, Rippling's global spend management software provides:

• Support for payments in 180+ currencies
• Automated routing through the most efficient payment channels
• Built-in compliance with banking regulations in different countries
• Real-time visibility into currency exchange rates
• Centralized tracking of all international transactions

By automatically handling the technical aspects of international banking, Rippling reduces payment errors, speeds up processing times, and simplifies the management of your global financial operations.

IBAN vs SWIFT FAQs

Do I need an IBAN if I have a SWIFT?

It depends on the countries involved in your transaction. For payments to countries that use the IBAN system, you'll typically need both the IBAN and SWIFT code. The IBAN identifies the specific account, while the SWIFT code identifies the bank. They work together to ensure your money reaches the right destination. For payments to countries that don't use IBAN, you'll need the recipient's account number and their bank's SWIFT code, but no IBAN is required or available. When in doubt, ask the recipient what their bank requires for incoming international transfers, as requirements can vary between financial institutions.

Does the USA use an IBAN?

No, the United States does not use the IBAN system. For international transfers to US bank accounts, you'll need the recipient's account number, their bank's SWIFT code, and the ABA routing number (a nine-digit code that identifies US financial institutions). The US banking system predates the IBAN standard and uses its own established infrastructure for domestic and international transfers. 

Which is better, IBAN or SWIFT?

Neither IBAN nor SWIFT is inherently "better" than the other—they serve different but complementary purposes in international banking. IBAN excels at accurately identifying specific bank accounts, reducing errors through its standardized format and check digits. SWIFT, meanwhile, provides a secure global messaging network that allows banks to communicate with each other, regardless of whether they use IBAN or not. Its near-universal adoption makes it essential for truly global transfers. 

The most efficient international payment systems actually use both: SWIFT for bank-to-bank communication and IBAN (where available) for precise account identification. Rather than thinking of them as competing standards, it's more accurate to view them as different parts of the international banking infrastructure that work together to facilitate cross-border payments.

Is BIC and SWIFT the same?

Yes, BIC (Bank Identifier Code) and SWIFT code are essentially the same thing—different names for the same identifier. The terms are often used interchangeably in banking and international transfers. Technically, "SWIFT code" refers to BICs that are connected to the SWIFT network, but in practice, virtually all BICs are part of this network. Both terms refer to the 8 or 11-character code that identifies a specific bank and, optionally, a particular branch. 

The format is identical: four characters for the bank code, two for the country code, two for the location code, and an optional three-character branch code. When filling out forms for international transfers, you might see either "BIC code" or "SWIFT code" requested—you can provide the same code for either field. Some banks and financial institutions prefer one term over the other, but they're referring to the same information.

This blog is based on information available to Rippling as of April 24, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.