What is a SWIFT payment?
A SWIFT payment is an international money transfer facilitated through the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network. SWIFT is a global cooperative society that enables secure and standardized financial transactions between banks and other financial institutions worldwide.
Key Aspects of SWIFT Payments:
Global Reach: The SWIFT network connects thousands of financial institutions across over 200 countries, allowing for seamless cross-border transactions. If a financial institution is not directly connected to SWIFT, it will use correspondent banks to process transactions on its behalf.
Security and Standardization: SWIFT messages are highly secure and follow standardized formats, which helps minimize errors and reduce the risk of fraud. Each message includes essential transaction details such as the sender's and receiver's information, amount, and currency.
Message Types: SWIFT uses standardized messaging formats like MT103 and MT202 to ensure that all necessary information is conveyed and understood by all parties involved.
SWIFT Code: Each institution within the SWIFT network has a unique SWIFT code (also known as BIC - Bank Identifier Code). This code accurately identifies the recipient bank and ensures correct payment routing.
Costs: SWIFT payments typically involve fees, which may include charges from the sending bank, intermediary banks, and the receiving bank. These fees can vary depending on the institutions involved and the specifics of the transaction.