SWIFT Transfers explained: How long does a SWIFT payment take?
The Society for Worldwide Interbank Financial Telecommunications, commonly known as SWIFT, provides a secure, standardized network environment that allows financial institutions worldwide to exchange information about financial transactions.
With more than 35 million transactions carried out through its network every day, SWIFT is one of the most common ways to transfer money internationally.
But how does SWIFT work behind the scenes and, more importantly, is it the best way for you to send money abroad? In this article, we explore what SWIFT is, its pros and cons, and better alternatives for international money transfers.
What is SWIFT?
A SWIFT transfer is an international money transfer done via the SWIFT network. SWIFT Payment is the acronym of the Society for Worldwide Interbank Financial Telecommunication.
The network has more than 11,000 member institutions worldwide, such as banks and other financial organizations like exchanges or clearinghouses.
Having been around for the past 50 years, SWIFT has become the standard way to move money between banks anywhere in the world.
So how does a SWIFT transfer work?
SWIFT functions as a messaging network, in the sense that banks ‘communicate’ payment instructions or orders between bank accounts rather than delivering actual funds.
These payment orders are sent using standardized codes (SWIFT codes) which ensure that your money gets to the right destination. As you may have noticed, you are asked for this code every time you make a money transfer overseas.
A SWIFT code (also called a BIC code) is unique to each financial organization and contains 8 or 11 characters identifying:
- The institution (for example RZBR for Raiffeisen Bank)
- The country (for example IT for Italy)
- The city or location (for example MM for Milan)
- Optionally, the branch (XXX)
When the sender and recipient banks have a commercial relationship with one another, money gets delivered as soon as the destination bank receives the SWIFT message from the sending bank.
But if the two banks do not have a direct agreement, one or several intermediary banks will facilitate the process, adding to the cost and time of the transfer.
Since SWIFT is used for cross-border payments, the original currency has to be converted to the destination currency; one of the banks involved will usually do the currency exchange. Depending on the sender and destination currencies, a double currency conversion may take place.
How long does a SWIFT payment take?
Once the transfer is initiated, a SWIFT payment can take anywhere between 1 to 5 working days to complete.
One of the main reasons for the slow transfer of funds via SWIFT are the fraud prevention and anti money laundering (AML) procedures in place by the banks involved in the transaction.
Another factor is that when the sender and recipient banks do not have a direct agreement, intermediary banks will prolong the process.
Then, bank holidays, weekends, and schedules can also impact the duration of the transfer processing.
What information do you need to make a SWIFT transfer?
To send an international SWIFT payment, you need to provide the following information:
- Your recipient’s name and address
- Name and address of the recipient’s bank
- Recipient’s account number (IBAN)
- BIC or SWIFT code of the recipient’s bank
How safe are SWIFT payments?
SWIFT has been around for over four decades and has become the norm for secure international money transactions.
This is due to the fact that the SWIFT network simply communicates encrypted money transfer instructions between banks or financial institutions instead of actually moving funds from one place to another.
As such, during a SWIFT money transfer money is only handled by the banks involved in the transaction, making it a highly safe and secure way of sending money overseas.
SWIFT transfers step by step
Making a SWIFT money transfer requires a few steps:
1. Verify your identity
You can make a bank transfer online from your internet banking account or from your bank’s online wire transfer option. You’ll need to log in or confirm your identity to avoid any fraud.
2. Make sure you have enough funds
Make sure you have enough money in your account to avoid your bank declining your payment due to insufficient funds.
3. Check the exchange rate
Exchange rates vary slightly from one money transfer service and one bank to another. Be sure to check that the rate your bank offers is within your range and whether you’ll be charged an extra fee for the currency conversion.
4. Confirm your transfer
If you agree to the exchange rate, you can go ahead and confirm the payment.
5. Your money is delivered
Your funds will be converted and received by your recipient in their bank account’s currency, at the exchange rate agreed.
How much does a SWIFT transfer cost?
SWIFT transfers are among the most expensive ways to move funds from one bank account to another.
The costs include:
- The bank’s transfer fee (usually a % of the transaction value)
- Currency exchange (banks will often quote poor exchange rates to inflate the total costs for a transfer)
- Possibly double currency conversion, currency exchange charges, or other ‘hidden’ fees
Exchange rates between any two currencies vary between banks, and they also change on a daily basis.
Pros and cons of SWIFT payments
As an established payment method, SWIFT transfers are subject to rigorous anti-fraud and anti-money laundering verifications, which helps keep your bank account and transactions secure.
SWIFT is used in more than 200 countries by over 11,000 organizations, which makes it widely available for money transfers between almost any two countries.
There are downsides to SWIFT transfers:
First, the rather complicated mechanism makes transfers slow, with up to 5 working days needed to complete a transaction. Delays can be even longer depending on the destination, bank cut-off times, and agreements between banks.
Secondly, SWIFT money transfers are pretty expensive. If an intermediary bank is needed to complete the process, additional fees will be added to the total cost of your transfer.
And last but not least, sending money overseas using SWIFT is not plain sailing. You are required to input a lot of information including the name and address of the recipient, the name of the bank, the SWIFT or BIC code, and the recipient’s IBAN (bank account) number.
Is there a faster and cheaper way to send money overseas?
While there is no denying that in its early days SWIFT transformed international money transfers, solutions are available today that provide faster transfers and a better experience.
A fintech innovator, Fin.do is the easiest way to send and receive money worldwide, in seconds. Our platform enables instant money transfers in any currency, with no currency conversion fees.
With Fin.do you can transfer money using nothing but your smartphone, which increases the availability of money transfers and access to funds for people anywhere in the world.
Here is how Fin.do money transfers compare to SWIFT transfers:
|Speed||3 or more working days to complete||Transfers are delivered instantly|
|Currency conversion||Double currency conversion depending on the currencies involved||Direct currency conversion between any two currencies with no extra fees|
|Recipient information||Complex recipient details required (including IBAN)||Send money to contact or to a card number|
|Fees||Fees can be shared between sender and recipient||One unique fee, shown to the sender upfront|
|Transparency||Complex routing of money between banks||Money is sent from card to card and ready to use in seconds|
If you’d like to see how fast Fin.do transfers are compared to international bank transfers, get the app with no monthly charges and no hidden fees.
We hope you found this tour interesting! And remember: your next international money transfer CAN be instant, easy, and secure!
Frequently asked questions about SWIFT:
Who uses SWIFT?
SWIFT’s global financial infrastructure is adopted and used by many types of institutions across financial and capital markets, including banks, exchanges, depositories, brokerages, currency exchanges, securities dealers, and asset management organizations.
What do I need to receive SWIFT transfers?
A SWIFT transaction is initiated by the sender. You’ll have to provide your sender with details including your name, your account number (IBAN), your address, your bank’s name, and the SWIFT or BIC code of your bank.
If you don’t know your bank’s SWIFT/BIC code, you can obtain this information from your bank or their website.
How do I send SWIFT transfers?
To make a SWIFT transfer overseas, you need to enter your recipient’s information (their name, address, their bank’s name, and address, the recipient’s bank account number, and their bank’s SWIFT/BIC code), the amount you want to send, and confirm your payment.
Note that a BIC/SWIFT code is mandatory for any international transaction except for the SEPA zone.
If you send euros between EU countries in the SEPA network, your transfer will be processed within 1 working day and you don’t need a BIC or SWIFT code. You’ll still need the recipient’s IBAN or bank number.
How do I track a SWIFT transfer?
SWIFT’s gpi tracker enables banks to track their SWIFT transfers at all times using a unique transaction reference included in each payment. You should be able to find out whether the money has been deposited into the recipient's account from your bank.