SWIFT code stands for ‘Society for Worldwide Interbank Financial Telecommunication’ code. A SWIFT code is a universal way of identifying banks throughout the world. The SWIFT code is an 8 or 11 alphanumeric characters code that uniquely identifies financial institution. The first four characters of a SWIFT code are letters and refer to the bank specifically. The next two characters are the country code, and the last two characters are the location code. If a SWIFT code is eleven characters, this means that the bank has added a three-digit code to denote a specific branch of a bank.
It is the standard format of Bank Identifier Codes (BIC) which is approved by the International Standard Organization (ISO) and represents a particular bank or bank branch. The purpose of these codes includes the transferring of money between banks especially for international wire transfers and also used for exchanging of other messages between banks.
You do not need to know your bank’s SWIFT code unless you are doing international transactions. But when you transfer money to another country or another bank, options include on-site express funds transfer services like Western Union,online funds transfer services like PayPal, or direct wire transfers from one bank to another. If a direct wire transfer is selected, the bank will probably ask for a SWIFT code for the bank receiving the funds. The SWIFT code is universally recognized and usually necessary for a funds transfer.