What is a SWIFT payment and how does it work?

Have you ever wondered what happens after pressing the “send” button on your internet bank’s payment form? Banks use different payment networks or so-called ‘payment rails’ to transfer your money, and SWIFT is one of them. With over 11,000 payment institutions connected to the network, SWIFT bank payment is currently the most common method for making cross-border multi-currency transactions in the world. Let’s dive in a bit deeper to understand how SWIFT bank transfer works.

What is SWIFT?

SWIFT means Society for Worldwide Interbank Financial Telecommunications – it’s an abbreviation for the most popular international payment network in the world. According to swift.com, in February 2022 alone, there were more than 385m financial messages made by SWIFT members – banks and financial institutions from over 200 countries.

How does SWIFT work?

The first step in understanding SWIFT and how it works is to remember that it is the channel for communication. Financial institutions use it for different purposes – from customer (MT103) and bank-to-bank transfers (MT200, MT202) as well as balance statements to FX, Money Market, Trade Finance and other deal confirmation. SWIFT is also used for payment investigations, their cancellation, amendment and other types of communication between financial institutions.

If we’re talking about payment transfers, banks and financial institutions use SWIFT platform to transmit instructions on how much money must be credited and debited from and to their clients’ accounts.

Customer transfer details that financial institutions provide to another bank/payment provider via SWIFT (MT103) may vary, but the basic requirements regarding beneficiary details are the following:

  • Recipient’s name – this can be either a natural person or a company name (e.g., John Doe or ABC Business Limited)
  • Recipient’s address – either a natural person’s address or the legal address of the company, if you’re paying a business
  • Recipient’s account number – this is the number provided by the recipient’s bank. It is usually an account number in the IBAN format. It varies from country to country, but it’s easily recognisable – IBAN starts with 2 country-code letters, 2 check digits and then is followed by a combination of letters and numbers. (e.g., the IBANs we issue at MultiPass look similar to this: GB11DYPY00989547773591)
  • A SWIFT code – also called BIC (Business Identifier code), consists of 11 characters and does exactly what its name says – represents the recipient’s bank, its country, city and branch. (Being a member of SWIFT network, we at MultiPass also have our own code – DYPYGB3LXXX.). If the recipient’s bank is not a member of SWIFT, some other bank identifier can be used (e.g. ABA routing, Sort Code, BLZ). If you are not sure, please ask your recipient what type of identifier should be used for the payment released via SWIFT.
  • Payment purpose and other details (e.g. payment purpose code etc).

What was before SWIFT?

Before the launch of SWIFT in the late 1970s connecting its first members, 239 banks from 15 countries, banks used to communicate through Telex or Telegraphic Transfer technology. It surely seems obsolete by modern-day standards as it involved telegraphic printers for two-way message exchange. It worked manually, meaning that there was no single standard for the messages and every transaction had to be described in text. Hence the whole process was slow and allowed a lot of human error. It is no surprise the ground-breaking code-based SWIFT message exchange network has been adopted and spread this rapidly. Telex, however, is still used globally as one of the backup communication channels.

Why is SWIFT the most popular money transfer network now?

Back in the seventies, the world was already in desperate need of a better, smoother and standardised way to transmit money globally, and SWIFT was a pioneer in this field. The new code-based message exchange system was innovative, reliable and easily understandable across different countries and nations, hence received a very fast spread straight after its launch. Several central banks joining the network in 1983 contributed to building trust in the system and accelerated its expansion even further. As opposed to many other payment networks, SWIFT supports multi-currency transactions, which is another reason for its global popularity. To this day it continues accepting new members, improving and developing its services, which now include not only transmission of financial messages but also securities, foreign exchange and international trade transactions.

SWIFT services

Through over 40 years of the network’s existence, SWIFT services expanded beyond just payment message transmission.


SWIFT provides comprehensive analytics for all their services – from securities and FX to payment messages. These reports allow SWIFT network participants, financial institutions, analyse their payment traffic and flows, financial message costs as well as help to identify fraudulent transactions and alert on potential crime risks.

Compliance services

Among other features, SWIFT offers its members a tool called Compliance Analytics. By monitoring all their financial message data, it highlights unusual activity and potential policy breaches across different jurisdictions, including high-risk and sanctioned.


There is a whole directory of third-party SWIFT-compatible applications that are granted access to the network’s data and processes to provide additional services to SWIFT members – from advanced analytics tools to technical solutions for improving payment processing, cash flow, securities settlement and other processes.

Secure and reliable network

Financial messages are protected by encryption and require advanced authentication by customers. With 24/7 risk & fraud monitoring and content validation features, SWIFT ensures customer data is always protected from unauthorised access or corruption.

Global payment

We’re all used to parcel tracking, but what if we can do the same with payments? In 2017 SWIFT rolled out Global Payments Innovation (SWIFT gpi), a ground-breaking solution for end-to-end transaction tracking. The banks connected to this network to provide real-time data on the payment location and charged fees, making the process absolutely transparent both for payment institutions and their clients.

Who uses SWIFT?

Different SWIFT services are used by different types of companies and institutions. The SWIFT network is mostly used by the banks and financial institutions such as neobanks or electronic money institutions for the transmission of payment messages, whereas securities or forex message exchange are usually used by brokers, forex companies, asset managers, depositories and other companies.

How to do a SWIFT transfer?

Making SWIFT transfers is easy. To make one, all you need is to collect some payment details from your recipient.

What do you need for a SWIFT transfer?

First, make sure both your and your recipient’s banks accept international payments. Whether you’re making a payment online or in a bank branch, you’ll need to provide the following SWIFT transfer details: the payment recipient’s name, account number, address, their bank’s name and a SWIFT code. If you’re making a business payment, you will also need a supporting invoice/agreement number or even attach this document’s copy to your payment. Sometimes there are also special fields for entering your recipient’s correspondent bank details. Although not required, this information can speed up your payment.

How long does a SWIFT transfer take?

Regardless of its many advantages, SWIFT is not the quickest of payment networks. The time taken to process a SWIFT transfer is usually 1-4 days as the payments sometimes must go through various checks and chains of correspondent banks. SWIFT business payments sent via MultiPass are usually processed within 24 hours.

What is a SWIFT code?

A SWIFT code (also known as BIC) is a numeric code used for representing a bank, country, region and branch. For example, MultiPass’s BIC/SWIFT code looks like this: DYPYGB3LXXX. You can find the banks’ SWIFT codes on the internet, some internet banks even pre-fill them automatically when you enter your recipient’s IBAN number in the payment form.

What are SWIFT charges?

Let’s see what can influence the price of your payment.

SWIFT fees

Remember that you’re paying your bank not for using the SWIFT communication channel but for making the actual money transfer. When people search for SWIFT bank transfer fees they usually mean bank fees for international payments or payments in a foreign currency. These payment fees depend on many factors such as the recipient account’s currency, type of commission (SHA, OUR or BEN), payment’s urgency, whether it is a personal or business payment, and of course, your bank’s appetites.

These charges can be fixed or a percentage of the payment’s total amount. If you’re sending a payment as an individual, the fixed payments are usually within the 10-30 EUR range. Here are examples of what some European banks will charge you for an outgoing payment in a foreign currency (data accurate on 17/03/2022):

A Finnish bank OP: 6 EUR using self-service or 15 EUR in a bank branch. If you don’t want your recipient to be charged, you can choose an “OUR” type of commission and pay an additional fee of 15-20 EUR, depending on the currency
A British bank Nationwide: 20 GBP
An Irish bank Permanent TSB: 31.50 EUR

Business payments are generally pricier with the fees depending on volumes, complexity, type of customer’s banking package etc. You can check MultiPass prices for SWIFT business payments on our pricing page.

In all these cases additional charges may be applied if the banks wire a payment through intermediary and/or correspondent banks – both for processing a payment or performing currency exchange if your recipient’s bank account is in a different currency from your payment.

SWIFT and exchange rates

Surely when you make a one-off payment in a foreign currency it is easier to just make a payment with your existing bank and try not to think about how much it cost. However, if you need to make regular payments to your relatives overseas or, let’s say, you have a business with foreign suppliers or workforce across the globe that needs to be paid monthly, it eats up a large chunk of your funds.

You may ask, what role does SWIFT play in foreign exchange? It doesn’t, once again – SWIFT is just a means of communication between the banks. If your recipient’s account is in a different currency from the one that you’re sending, banks make an exchange for you. In this case, the SWIFT message will contain instructions that the payment needs to be converted to a certain currency at a certain exchange rate. Payment conversion is never free, some banks charge you a conversion fee, some add a significant margin to the exchange rate, and some even do both!

The high costs, however, can be avoidable – there are quite a few services offering foreign exchange at better rates. MultiPass business account has an in-built FX desk with access to up to 30% better rates than the ones offered by the mainstream banks. This way, our customers can send their payments straight into their recipient’s currency, avoiding any unpredictable conversions on the way.

SWIFT common problems

The most common problems businesses face when working with SWIFT international payments is, firstly, the inability to affect their execution speed. By 2022 we became so used to instant payments that we expect business payments to be as quick, but international payments are still very far from it. The reason for this is that these payments are often routed through several banks and jurisdictions with regulatory checks at every stop. These compliance checks are also the reason for the second problem – stuck or rejected payments. Sometimes a missing invoice or a typo in the recipient’s address is enough to interfere with the payment execution.


To conclude, SWIFT is a transcontinental, continuously growing payment network that plays a crucial role in the world’s economy and international trade. Having access to SWIFT is especially important for any bank or payment institution that wishes to serve businesses with cross-border partners or ambitions to try new markets.

In MultiPass’s experience, SWIFT works best when combined with other local payments methods, both in terms of speed and costs. Contact us today to discuss your business case and discover the best payment solutions for the markets of your interest – the consultation is free.

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