Despite the large number of cross-border payments being made daily, many people use SWIFT payments without fully understanding how it works and who is involved.
A SWIFT payment, also commonly known as a SWIFT transfer, is a form of international money transfer facilitated by the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
It involves a message containing payment instructions sent from one bank to another.
These banks can be in different countries, and the payment typically follows a secure and standardized process.
Not all SWIFT payments are simple one-to-one transactions; sometimes, intermediary or correspondent banks may also be involved, which can affect both the time and cost associated with the transfer.
This interaction between banks largely determines the efficiency of the payment process.
Breakdown of Key Participants:
The Payer: The individual or entity initiating the payment.
Payer's Bank: The bank from which the payment originates.
The Receiver: The person or company receiving the funds.
Receiver's Bank: The bank where the funds are deposited.
Plus, Correspondent Banks or Intermediary banks play a significant role. They act as middlemen, helping to move funds between banks from different countries or dealing with different currencies.
For smooth and safe communication between banks, the SWIFT system uses specific messages:
► MT103: A message from the payer’s bank to the receiver's bank.
► MT202: A message that goes from the payer’s bank to intermediary banks, ensuring funds reach the right destination.
► MT910: A confirmation message indicating a successful credit transfer.
For more details, Pls check https://statrys.com/blog/how-long-does-a-swift-transfer-take
