What is a SWIFT Transfer?

The importance of SWIFT transfers

SWIFT transfers play a pivotal role in the global economy. They enable the seamless transfer of funds between financial institutions in different countries. Whether it's for individuals sending money to family abroad or multinational corporations conducting business transactions, SWIFT offers a secure and efficient means of moving funds across borders.

How do SWIFT payments work?

At its core, SWIFT transfers operate as a messaging system. When you initiate a SWIFT transaction, your bank sends a secure message through the SWIFT network to the recipient's bank. This message, also called SWIFT code, contains all the necessary information to complete the transfer, including account details and the amount to be transferred. The recipient's bank then processes the message and ensures the funds are credited to the intended account.

What is a SWIFT Code?

A distinctive SWIFT code consists of either 8 or 11 characters and is known by various names, including:

• Bank Identifier Code (BIC)
  
  
• SWIFT ID
  
  
• ISO9362

This alphanumeric code is integral to the efficiency and accuracy of cross-border financial transactions.

How long does a SWIFT transfer take?

SWIFT transfers usually take 1 to 4 working days. The exact time can vary depending on where you're sending it, time zone differences, and various banking regulations. Keep in mind that SWIFT transfers aren't instant. Your money has to go through security checks to prevent fraud and money laundering, which can slow things down.

Sometimes, if your bank isn't directly connected to the recipient's bank, your money may go through an intermediary bank, making the process take a bit longer.

Benefits of using SWIFT transfers

One of the primary benefits of SWIFT payments is their global reach. Regardless of the countries involved, SWIFT can connect banks worldwide. This extensive network ensures that your money reaches its destination securely and on time. Additionally, SWIFT transfers are known for their reliability and security.

SWIFT payments vs. other payment methods

Comparing SWIFT payments to other payment methods like wire transfers or online payment platforms is essential to understanding their advantages and disadvantages. SWIFT transfers are typically used for larger international transactions, while other methods may be suitable for smaller domestic payments.

A few main advantages of SWIFT payments:

• Accountability: SWIFT simplifies tracking payments between banks, so you always know when your payment is sent and received.
  
  
• Accessibility: In a global world, communication can be tricky, but not with SWIFT. It makes cross-border connections smooth and straightforward.
  
  
• Transparency: SWIFT provides crystal-clear information about how much your transaction will cost. No hidden fees, just transparency.
  
  
• Popularity: SWIFT is your go-to for sending payments worldwide, supporting 160 currencies and over 1,200 currency pairs. It’s a popular choice for a reason.

SWIFT transfer process step-by-step

Common uses of SWIFT transfers

SWIFT transfers are versatile and can be used for various purposes:

SWIFT transfer fees and charges

While SWIFT transfers offer advantages in terms of security and reliability, they are not without costs. Banks typically charge fees for SWIFT Transfers, which can vary depending on the amount, currency exchange rates, and the banks involved. In the UK, the major banks have a variety of charges for these transactions, which can be a bit puzzling.
There are two common types of fees: a transfer fee and recipient fee. These fees are usually fixed for each SWIFT transfer. Let’s take a look at the fees charged by the UK’s top four banks:

Be aware that there may be additional correspondent bank fees if an intermediary bank is involved in your money’s journey. Some banks offer the option of speeding up your payment, but they may charge a priority payment fee. If you’d rather avoid these fees altogether, going outside your bank is the only way to go.

Alternatively, you can consider money transfer companies like EasyFX. They specialise in travel money cards and international money transfers, offering the best rates with no hidden fees. Trusted by over 40,000 clients, EasyFX ensures transparency and an exceptional customer experience.

How secure are SWIFT transfers?

SWIFT transfers are a trusted and secure method for moving money internationally. This well-established payment network has been in operation for over four decades and is the choice for nearly half of all global cross-border payments.

It’s important to understand that SWIFT serves as a secure means of communication for transferring funds between accounts, but it doesn’t actually manage the money itself. This responsibility lies with your bank or the money transfer company you choose.

For added peace of mind, it's advisable to work with a company authorised by the Financial Conduct Authority (FCA) such as EasyFX. This authorisation ensures that the bank or money transfer company maintains a dedicated safeguarded bank account solely for customer transactions, which is a crucial layer of protection for your funds.

To verify if a company is FCA Authorised, simply input their name into the Financial Services Register.

SWIFT transfer limitations

Despite its many benefits, SWIFT transfer has some limitations. The process can be slower compared to modern digital payment methods, and the fees can be relatively high for smaller transfers. It's essential to consider these factors when choosing the right payment method.

How to initiate a SWIFT transfer?

To initiate a SWIFT Transfer, you will need to contact your bank or financial institution. They will guide you through the process, including the information required to complete the transfer.

To send money overseas with SWIFT, you’ll need these details:

1. Receiver’s name.
2. Where they live.
3. Bank’s name and address.
4. The bank’s SWIFT code (also called BIC).
5. Receiver’s account number or IBAN (International Bank Account Number).

The SWIFT code is like the bank’s ID, while IBAN is a longer code for the bank account.

What is an IBAN number?

An IBAN, which stands for International Bank Account Number, is really important for handling money from different countries. It's not there to replace your regular sort code and account number; instead, it's like an extra code made up of letters and numbers. This code helps banks in other countries figure out which account is yours.

Here's an example: If you have an account in the United Kingdom, your IBAN might look something like this: GB29 BUKB 6016 1331 9268 19.

In this example:

This special code makes sure your money goes to the right place when you’re dealing with cross-border transactions.

Which countries use the SWIFT transfer/payment network?

SWIFT is truly a global phenomenon. It connects banks and financial institutions in more than 200 countries, making it one of the most widely used international payment systems.

A considerable portion of global high-value cross-border payments utilises the Swift network. Swift has successfully interconnected over 11,000 financial institutions across more than 200 countries and territories. These institutions engage in an extensive exchange of messages, with an average exceeding 32 million messages per day—a significant leap from the comparatively lower average of 2.4 million daily messages noted in earlier years.

SWIFT transfers for businesses

Businesses frequently rely on SWIFT transfers for international trade and financial transactions. The system offers the security and reliability needed for large-scale cross-border dealings.

SWIFT transfers in the digital age

As technology continues to advance, SWIFT has also evolved. Digital innovations have made the process more efficient, reducing the time it takes for funds to reach their destination.

A Summary of SWIFT transfers: