You're sitting at your desk, about to make an important international transaction. You have all the recipient's details, but there's one part that always makes your brow furrow, wondering what it means– those codes - swift and sort.
What are they, when should you use them and do you need both? Understanding SWIFT codes and Sort codes is like trying to make sense of a secret language. But not to worry, this article explains in detail the key differences between SWIFT codes and Sort codes, as well as when and how to properly use each.
Let's Begin With SWIFT Codes.
The "Society for Worldwide Interbank Financial Telecommunication" often referred to as SWIFT is a widely used method of securely transferring financial messages between banks. In order to make digital international payments easier. Financial institutions all around the world use Swift codes, which are unique identifying codes.
Think of SWIFT codes as your passport to international transactions. When you're sending or receiving money from abroad on Leatherback, SWIFT codes come into play.
When you're sending money to someone in another country, you'll need a SWIFT code to identify their bank. This code helps ensure the money goes to the right account. Think of it as an international address for the recipient's bank, ensuring the money takes the right flight.
How Can You Identify a SWIFT Code?
A SWIFT code, also known as a Bank Identifier Code (BIC), is a unique alphanumeric code used to identify a specific financial institution worldwide. To identify a SWIFT code, look for the following this structure:
A SWIFT code is typically 8 to 11 characters long.
Includes a combination of letters and numbers.
The first four characters of a SWIFT code are letters. Representing the bank's name or institution code.
The next two characters represent the country code, indicating the country where the bank is located.
The fifth and sixth characters of the SWIFT code are the location code.
The final three characters (which are optional) stand in for the particular bank branch.
An illustration of a SWIFT code for a bank in London would be ABCDGB2LXXX. Here, "ABCD" stands for the bank, "GB" designates the United Kingdom, "2L" stands for London, and "XXX" stands for the branch code that is optional.
When making international payments, always ensure you have the correct SWIFT code, as using the wrong one can result in delays or errors in international money transfers. Double-check the code on your Leatherback account or the receiving party if you have any doubts.
When Should You Use a SWIFT code?
SWIFT codes are primarily used for international wire transfers. You should use a SWIFT code when you’re:
sending money from your Leatherback local account to someone in another country or receiving funds from abroad
investing in foreign stocks, bonds, or other assets, you may need to use a SWIFT code to transfer funds to your foreign investment accounts
exchanging currency, SWIFT codes may be involved in the process.
receiving payments from international clients or customers, they might need your SWIFT code to send funds to your bank account.
How to Find My SWIFT Code on My Leatherback Account?
Follow these steps find and copy the SWIFTcode assigned to your currency accounts on your Leatherback app:
Sign into your Leatherback app
Tap ‘Accounts’
On the dashboard, tap ‘Add funds’
Select a payment method.
Once you do, your account name, number, SWIFT code, bank name, address and country will be displayed on your screen.
Now, Let’s Bring It Home With Sort Codes.
Sort codes, on the other hand, are used for domestic transfers within the United Kingdom and Republic of Ireland. Sort codes facilitate the effective routing of domestic payments within these nations. They are shorter than SWIFT codes, typically consisting of six digits.
For example, you're splitting the bill with your pals for a weekend getaway, and you need to transfer money to a friend's GBP account, you'll use their sort code to make sure it gets to their specific branch. Sort codes are like GPS coordinates directing your money to the correct branch within the country.
How Can You Identify a Sort Code?
To identify a sort code, you can take a look at a bank statement or a cheque book from the bank in question, the Sort Code is typically printed on these documents. Look for a series of six digits in the format XX-XX-XX, where X represents a number.
Six digits, typically divided into two groups of three, make up a conventional sort code in the United Kingdom. For example: 12-34-56. The bank is represented by the first three digits, and the bank branch by the last three digits.
In Ireland, a sort code normally has the form XXXXXX, where each of the bank's six numbers stands for a different branch.
Keep in mind that Sort codes are essential for various banking transactions within the United Kingdom and the Republic of Ireland, including direct deposits, and transferring money to a specific bank branch. Using the correct Sort Code is crucial to ensure that your funds reach the intended destination without any issues.
When Should You Use a Sort code?
You should use a sort code when you are making a domestic financial transaction within the United Kingdom. Sort codes are specific to the UK and are used for routing money to the correct branch of a bank or financial institution within the country. Here are some common situations in which you should use a sort code:
When you need to transfer funds to another person's bank account within the UK.
When setting up direct debits and standing orders to pay bills or make regular payments to various service providers.
If you are expecting payments from individuals or organisations within the UK.
Once you open a GBP or EUR account on Leatherback, a unique account number and sort code will be assigned to your account, which you can use for various transactions.
How to Find My Sort Code on My Leatherback Account?
Follow these steps find and copy the sort code assigned to your currency accounts on your Leatherback app:
Sign into your Leatherback app
Tap ‘Accounts’
On the dashboard, tap ‘Add funds’
Select a payment method.
Once you do, your account name, number, sort code, bank name, address and country will be displayed on your screen.
What Are the Key Differences Between SWIFT and Sort Codes?
SWIFT codes and Sort codes serve different purposes when making international and local payments. They may sound similar, but have different structures and usage.
In terms of length and structure:
SWIFT codes are longer; a combination of letters and numbers, making them unique for each financial institution.
Sort codes are shorter and consist of only six digits, all of which are numbers. They are more straightforward and easier to remember.
For usage:
SWIFT codes are used for various international financial activities, including wire transfers, receiving funds from abroad, and making online purchases from foreign sellers.
Sort codes are used for local transactions within the UK and Republic of Ireland, such as direct debits, interbank transfers, and payments to local recipients.
In terms of geographic scope:
SWIFT codes are universal and recognised globally. They are used for transactions across borders, making them essential for any international financial dealings.
Sort codes are specific to the United Kingdom and Republic of Ireland and are not used by other countries.
Always double-check the codes while making financial transactions to prevent mistakes, snags, and other potential issues. Understanding when to use each code ensures that your funds are directed accurately, whether they're travelling across continents or just down the street.
For more information about anything you need to know about how to send and receive money on the Leatherback mobile app, contact us at help@leatherback.co. Stay in touch and keep abreast of financial tips and resources via LinkedIn, Instagram, Facebook, and Twitter.
