Difference Between SWIFT Code and Routing Numbers

SWIFT Code vs Routing Numbers
 

The importance of the SWIFT code and routing numbers in the banking world makes us eager to know the difference between SWIFT code and routing numbers. SWIFT codes and routing numbers have one thing in common: identifying a bank. They are used by financial institutions to know in what particular bank an account is being held in. In a sense, they are a bank’s fingerprint in the financial world. However, how are SWIFT codes and routing numbers different from one another? This article intends to address that question as clearly as possible. But, before learning the differences, it is important to know what these two numbers, SWIFT code and Routing number, are. 

What are Routing Numbers?

Routing numbers are nine digit numbers used in the United States that are shown on the bottom of negotiable instruments such as checks, as a means of identifying the financial institution it is drawn from. It was designed to help sort, bundle and ship paper checks back to the check issuer’s account. With the implementation of Check 21 in the US, it has found additional use in the processing of paper drafts, direct deposits and withdrawals, and bill payments by the Automated Clearing House. The routing number is usually derived from the bank’s transit number which is drawn by the American Bankers Association. (Routing number in the image below is 129 131 673)

Difference Between SWIFT code and Routing Numbers

What is SWIFT Code or BIC?

Approved by the International Organization for Standardization (ISO), the SWIFT code (Society for Worldwide Interbank Financial Telecommunication) is an alphanumeric identifier of banks for the purpose of sending or receiving money internationally through wire transfers that is a standard format of Business Identifier Codes (BIC). It is composed of eight to eleven alphanumeric characters and the first four letters is the bank code, the next two letters is the country code, the next two letters or numbers is the location code and the last three numbers is the branch code.

SWIFT code

What is the difference between SWIFT Code and Routing Numbers?

Routing numbers and SWIFT codes are used as identifiers for financial institutions. They are there to make sure the money is going to where it should be going. The routing number is only used for domestic transfers, those that are within the United States. The SWIFT code, on the other hand, is used for international wire transfers. While the routing number is composed of nine digits, the SWIFT code is alphanumeric. For example, the routing number for a Chase account is 021000021 while its SWIFT code is CHASUS33. The routing number identifies a bank within the United States while the SWIFT code identifies a bank internationally. Routing numbers are used for multiple purposes such as for electronic payment processing via ACH, bill pays and paper drafts. SWIFT codes are used for international wire transfers only. Therefore, one can conclude that while both routing numbers and SWIFT codes stand for similar purposes, there exists a plethora of differences that set them apart, thereby making them unique in their own right.

Summary:

SWIFT code vs Routing Numbers

• Routing numbers and SWIFT codes are unique identifiers for financial institutions. Routing numbers are used for transactions within the US while the SWIFT codes are used for international wire transfers.

• Routing numbers are nine digits in length while SWIFT codes can be eight – eleven alphanumeric characters.

• Routing numbers are also used for electronic payment processing via ACH, bill pays and paper drafts. SWIFT codes are used for international wire transfers only.

 

Photo By: Kalmia (CC BY-SA 3.0)

Further Reading:

  1. Difference Between IFSC Code and Swift Code
  2. Difference Between Swift Code and IBAN Code
  3. Difference Between MICR and Swift Code
  4. Difference Between ABA Routing Numbers and ACH Routing Numbers