SWIFT Payment System: What It is and How It Works
A transfer of funds between countries used to seem something out of real, but today it is a convenient and fast process, which is perceived as a regular thing. The development of technology has greatly simplified SWIFT transfers, which every modern person should know about. Therefore, in this article CoinShark will answer in detail the frequently asked question regarding SWIFT transfers.
What is SWIFT and what does is stand for?
This is an interbank system with a minimum commission for transfers in any currency, which was established in 1973. The abbreviation SWIFT itself stands for "Society for Worldwide Interbank Financial Telecommunications. ”
Working with SWIFT
The system can be used by organizations, private individuals or entrepreneurs. For international financial transactions, it is necessary to specify the details of the beneficiary's account and the SWIFT code of the bank to which funds will be delivered. To transfer money, it is not obligatory to start an account, since transactions can be carried out through transaction accounts of users of the system. One more peculiarity is that the processing of payments in the system takes a little longer, but it is compensated by a low commission, for example, in comparison with Western Union or Contact systems. Transaction processing takes from one day to one week. The speed of the operation depends on availability of a settlement account.
Requirements for the SWIFT user
To work with the system, you must follow the following rules:
- To fill in the details of payment and transfer in English;
- To pay a transfer fee without using the account. It is recommended to open one if transfers are performed regularly.
To use the system, the accurate SWIFT system details are required, which include:
- The name of the bank and its SWIFT code;
- The name of the correspondent bank and its SWIFT code;
- Beneficiary's account;
- Basic information about the beneficiary that identifies him.
There is no single table of rates on services in the system due to the differences in banking structures. Since each international financial organization has an individual cost of services. The most common is a two-sided payment for transaction. But even in this case the commission is lower compared to other systems, this is especially appreciable when speaking about large transfers. However, for transfers of smaller amounts of money, the system is of no less demand.
To transfer money through the international system, you need to do the following:
- To indicate in the bank, that is a member of the SWIFT community, from which account the transfer will be carried out or clarify that from none;
- To give the passport and the details of the SWIFT transfer to a representative of the bank;
- To apply for a transfer;
- To pay the required amount of money through the bank cash office, taking into account the commission.
Receipt of funds
Before receiving funds, it is necessary to make sure that they have arrived to the account. For this you need:
- Contact by phone with the bank to which the funds should arrive;
- Check your account in your member area remotely via the bank website.
To receive funds, you must perform the following steps:
- To visit the bank to which funds should arrive;
- To present the identification documents to a bank representative and withdraw money from the account;
- If necessary, to convert the received funds into desired currency at the rate effective at the bank.
Advantages and disadvantages of the SWIFT system
- High level of security of money transfers worldwide;
- The ability to transfer and receive any sum range;
- Calculation of funds in any currency;
- Minimum commission;
- The ability to receive or send funds at almost any bank of the world;
- If the system fails, it will compensate for losses.
- Transfer can take 7 days;
- Due to the involvement of several banks in the process, the system may fail.
Alternatives to SWIFT
Recently, transfers in USDT, USDC, BTC or ETH cryptocurrencies have been in great demand. They can be easily made through one of the top crypto exchanges HUOBI or Binance and also on the exchange KUNA for rubles (RUB) or hryvnias (UAH).
As you can see, the number of advantages is much greater than disadvantages, this is why today the international transfers in SWIFT are the most in demand.