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SWIFT (Society for Worldwide Interbank Financial Telecommunications) is a global messaging network facilitating international money transfers. While SWIFT doesn't transfer money directly, it sends payment orders between banks.
Founded in Brussels in the 1970s, SWIFT replaced the TELEX system with a standardized, secure method for processing international payments. Today, over 11,000 financial institutions across 212 countries use SWIFT.
SWIFT is regulated by the National Bank of Belgium and overseen by central banks from major economies, including the G10 countries. It is owned by its member financial institutions, who elect its Board of Directors.
SWIFT plays a crucial role in international sanctions. For instance, the EU has used SWIFT to enforce sanctions on countries like Iran and Russia by cutting off their access to the network.
Not all banks are SWIFT members. Many smaller banks and credit unions, particularly in the U.S., rely on other systems for international transfers.
SWIFT codes, also known as BICs, are used to identify banks globally. A SWIFT transaction involves sending payment orders between banks, using these codes to ensure accuracy.
Your bank's SWIFT code can be found on its website or through customer service. It's an 8-11 character code used for identifying the bank during transactions.
(International Bank Account Number) identifies individual bank accounts, while SWIFT codes identify banks. Both are needed for international transfers.
Incorrect SWIFT codes can lead to returned payments and potential fees. If you use a valid but incorrect code, the recipient bank may reject the transfer.
SWIFTNet is the platform for SWIFT messaging services, including FIN for traditional messaging and InterAct for real-time messaging.
Banks, asset management companies, clearinghouses, and brokers use SWIFT for international payments. However, businesses are increasingly seeking faster, cheaper alternatives.
To make a SWIFT payment, you need the recipient's name, address, IBAN, and their bank's SWIFT code. Payments typically take 1-5 business days.
Fees include transaction fees, which vary by intermediary banks, and foreign exchange fees. SWIFT transactions can be costly due to these fees.
SWIFT payments generally take 24 hours to 5 business days, depending on the transfer's complexity.
SWIFT's major drawbacks include potential delays and hidden fees, which can complicate financial planning and international business operations.
Delayed payments: Because SWIFT payments rely on the cooperation of multiple financial institutions, SWIFT payments can take up to five days to process. What’s more, there’s no way to know how long your payment will take to clear. Delays can happen without warning. If you’re a business that needs to pay staff and suppliers on time, this can cause a lot of problems. No one wants to receive their pay check five days late!
Hidden fees: Different financial providers charge different fees when processing SWIFT payments, which means it can be difficult to determine what the final cost of a SWIFT transaction will be. This means you and your recipient may be subject to surprise fees. In the worst case, this might mean your recipient receives less money than they’re expecting, which can cause friction between businesses and the people whom they owe money to
RBK Pay offers a modern alternative to SWIFT with faster, cost-effective global payments .
Learn more about how RBK Pay can benefit your business by visiting our website.