BIC SWIFT compared to aba routing code


Difference Between BIC (Swift) and BSB Number

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Published: 20 September 2018


If you transfer money to someone who has a bank account in Australia, you will need to know either their BIC/SWIFT code or their BSB Number.

But what are these codes and why are they needed?

The BIC/SWIFT code and BSB Number are both used to identify which bank the recipient holds an account with. The difference is that the BIC/SWIFT code is used when transferring the money internationally and the BSB Number is used when transferring the money domestically in Australia.

Unfortunately, sometimes someone based in Australia will provide you with their BSB Number even if you need to make an international transfer. If this happens, you can use a third-party transfer agency, like Instant Global Payments, to help. At Instant Global Payments we will let you do cross border payment with either type of bank details.

Author:

author Chris Dwyer

Chris Dwyer

Payment System Architect


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International Payments (BIC/SWIFT)

To process international payments, banks use the Society for Worldwide Interbank Financial Telecommunications (SWIFT). SWIFT is a member-owned cooperative that links over 11,000 financial institutions across over 200 countries.

SWIFT issues each member with a unique Business Identifier Code (BIC) which can be used to identify which banks are involved in each transaction. Each BIC code is 8-characters or 11-characters long.

  • Characters 1-4: identify the bank
  • Characters 5-6: identify the banks country
  • Characters 7-8: are the location code
  • Characters 9-11: identify the bank’s branch

BIC SWIFT Breakdown of Components
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Domestic Payments (BSB Number)

To process domestic payments, banks route payments through the New Payments Platform Australia (NPP). The NPPA uses the BSB code to determine which bank the recipient holds an account with; essentially the same as a BIC/SWIFT code except on a domestic level.

Historically, the Reserve Bank of Austalia (RBA) issued each bank with a unique code which can be used to identify that bank when processing transactions.

The BSB is a 6 digit code with the following structure

  • Digit 1-2: Bank Code
  • Digit 3: State Code
  • Digit 4-6: Branch Code

ABA Routing Code Breakdown of Components
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Why have different codes?

If both codes essentially achieve the same objective (identifying which bank to send the money to), then why are both still used?

Both are still used today because of the way the underlying systems process the payments.

Price

Transfers using a BIC/SWIFT code are processed individually which can result in much higher costs for the financial institution sending the payment. However, if you use a BSB Number the payment will likely be processed through the New Payments Platform (NPP) which will settle each payment within seconds of it being received; this is a lot more cost effective solution for financial institutions.

Ease of Use

Banks in Australia use the NPP because it is cost effective (as mentioned above) and it provides for almost instant cleared funds, 24 hours, 7 days per week. For banks outside Australia, connecting with the NPP is not possible. This is where SWIFT comes in, it is used to connect Australia banks to the rest of the world.


Choosing the right provider

Regardless of which bank details you are given; Instant Global Payments can help you send money to Australia. We pride ourselves on giving our customers world-class exchange rates, we challenge you to compare the exchange rate we offer you to your current provider, we are confident that we will be offering you a better rate.



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