27/01/2022

What are SWIFT payments?

By Mariana Almeida Marques

Sending money overseas is as simple as any other transfer. The ease and accuracy of international transfers is due to SWIFT, a messaging network that connects banks and financial institutions across the globe. In this article, we discuss what is the SWIFT network and answer some of the most common questions regarding SWIFT payments.   

 

What are SWIFT payments?

SWIFT payments are payments sent through the SWIFT network. Short for Society for Worldwide Interbank Financial Telecommunications, SWIFT is a messaging network used to process international bank-to-bank transfers. Note that this network does not actually process payments nor does it hold funds. Instead, it is responsible for transmitting payment messages and instructions between banks, which used to facilitate the transfer of funds.  

SWIFT is based in Belgium and overseen by the National Bank of Belgium (NBB), along with G-10 central banks. The network counts with over 11.000 member institutions based in 212 different countries, who used SWIFT to send over 35 million payments per day in 2020. These member institutions include banks, money brokers, clearing systems and enterprises.  

smart routing can help prevent failed payments.

 

How does SWIFT work?

SWIFT is a messaging system used to ensure an accurate and seamless transfer of funds between countries. It assigns a SWIFT code to each financial organisation, that is composed by:

  • Four digits for the financial organisation code
  • Two characters for the country code
  • Two characters for the city code
  • Three characters for local branches (this is optional, so financial organisations may choose to add a different identifier here)

SWIFT codes can also be called BIC (Bank Identifier Code), SWIFT ID or ISO 9362 code. This code can be found online, by adding your bank’s name and your own account number and sort code. You may also find it in your own online account.

In order to make a SWIFT transfers, payers will have to insert this SWIFT code, along with the information below so that the transfer can be routed correctly.

 

What information do you need to provide for a SWIFT payment?

To make a transfer using SWIFT, senders need to provide the name of the recipient, their address, the name and address of the acquiring bank (recipient’s bank), the SWIFT code of the bank (also named BIC) and the recipient’s account number or IBAN. These details will be used to track the payment and ensure that it arrives safely in the correct account. Note that SWIFT codes only identify the acquiring bank, and not the individual customer. Hence, senders need to provide account identifiers such as the IBAN. Customers can find these numbers by logging in to their account portals online, via the banks’ app, or by visiting a physical branch.  

 

How long does a SWIFT payment takes to be processed?

SWIFT payments aren’t instant. They may take between 1 to 5 working days on average. The transfer times may vary slightly depending on the countries’ time differences, the currencies and the banks themselves. For instance, if there is no direct connection between your bank and the acquiring bank (assuming you are the payer), SWIFT may use an intermediary bank and take longer than usual to route the money.

chargebacks are initiated by customers who request a transaction cancellation.

 

What are the transfer limits for SWIFT?

Opposed to other networks, SWIFT does not have any transfer limits. You can send as much or as little money as you would like, provided that you have enough funds in your bank account to cover fee costs. Note that fees are usually non-refundable.

 

How much does SWIFT cost?

SWIFT payments incur a charge of around 3 to 4% of the total transfer, which includes admin costs and currency conversions. These charges may differ depending on the banks and currencies in question. The issuing and acquiring bank may also request a fixed fee for the transfer, which may total around €10 to €40. If you see a fee of this range, your bank is likely to be using SWIFT to make the payment.

 

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

 

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