SWIFT Money Transfer: The Ultimate Guide
SWIFT money transfers are the global standard for sending and receiving funds across borders. The Society for Worldwide Interbank Financial Telecommunications (SWIFT), a member-owned cooperative, ensures secure and reliable transactions worldwide. In this blog, we’ll delve into how SWIFT operates, its significance in global payments, and explore faster, more cost-effective alternatives.
What is a SWIFT Money Transfer?
Founded in 1973 by 239 banks, SWIFT is a messaging network that enables secure communication between banks for transactions like money transfers using a standardized code system. Most countries depend on SWIFT for safe cross-border communication. As of November 2022, SWIFT handled an average of 44.8 million financial messages daily, with the majority related to payments and securities.
In a nutshell, SWIFT money transfer mostly refers to international wire transfers happening over the SWIFT network. Let's try to understand SWIFT Money transfer with a simple example:
Imagine you are an exporter in Bangalore expecting a SWIFT payment from a client in the United States. You have an account with Axis Bank, and your client needs your account details, including your account number and the branch-specific SWIFT code. Find out the right SWIFT Code for your bank right here
The client then visits their bank, say Bank of America, to initiate the SWIFT money transfer. Bank of America sends a SWIFT message through the secure SWIFT network to Axis Bank’s Bangalore branch. Upon receiving this message, Axis Bank processes the payment and credits the funds to your account.
What is a SWIFT Money Transfer Code?
A SWIFT code is a unique 8- or 11-character alphanumeric identifier assigned to banks and financial institutions. It contains essential information about the institution’s country, location, and branch.
Breakdown of a typical SWIFT Money Transfer code:
- The Bank Code (4 letters): The first four characters of a SWIFT code represent the institution's unique identifier. They could be letters or numbers, such as "BARC" for Barclays Bank or "HSBC" for HSBC Bank.
- The Country Code (2 letters): The next two characters represent the country where the institution is located. For example, "CA” for Canada, GB" for the United Kingdom, or "FR" for France.
- The Location Code (2 letters or digits): Next are two characters that identify the institution's location within the country. They can be letters or numbers and may denote a specific city or region. For instance, "LX" for Luxembourg, "NY" for New York, or "SG" for Singapore.
- The Branch Code (optional—3 letters or digits): If the institution has multiple branches in the same location, it helps direct the transaction to the correct branch. As this code is optional, not all SWIFT codes include the branch code, making them 8 characters long instead of 11.
Examples of SWIFT Money Transfer Code:
Here is the breakdown of two SWIFT codes for a better understanding:
SBININBB101: This unique code refers to the State Bank of India’s Mumbai office. "SBIN" is the bank code, "IN" stands for India, "BB" indicates Mumbai, and "101" denotes the branch in a specific locality.
DEUTDEFF500: This SWIFT code belongs to Deutsche Bank's Frankfurt branch in Germany. "DEUT" represents the bank, "DE" is for Germany, "FF" signifies Frankfurt, and "500" indicates the specific branch at Bad Homburg, a town in the Frankfurt region.
Is SWIFT Money Transfer safe?
SWIFT money transfers are widely regarded as safe. The SWIFT network is trusted globally for secure international financial transactions. Here's why:
Strong Encryption: SWIFT uses encryption to protect your transaction details, making sure that only the intended bank can see the information.
Tight Access Control: Not just anyone can use the SWIFT network—only verified banks and financial institutions have access, minimizing the risk of unauthorized transfers.
Global Trust: SWIFT adheres to international regulations, which helps ensure that your transfer is handled according to the highest standards.
Fraud Monitoring: The system constantly monitors for unusual activity to help prevent fraud before it happens.
While the SWIFT network is highly secure, it's crucial to double-check the details you provide to avoid errors or delays.
How do I make a SWIFT Money Transfer?
Making a SWIFT transfer is similar to a local bank transfer but requires some extra details. Here’s how to do it:
Step 1: Initiating the Transfer
Contact your bank or log in to your online banking portal to start a SWIFT transaction. You’ll need to provide the recipient’s name, bank name, address, unique SWIFT code, currency, and the transfer amount.
Step 2: Verification
Your bank will verify the details and check if you have sufficient funds.
Step 3: Debit
Once everything is verified, the bank will debit the amount from your account and provide a confirmation message or reference number.
Step 4: Credit
The funds are then sent via SWIFT to the recipient’s bank. After verification, the recipient's bank will credit the amount to their account.
SWIFT Money Transfer Charges
Broadly, SWIFT charges can be broken down under the following heads:
- Outgoing Fee: The sender’s bank may charge a fee based on the transfer amount and destination, which can vary.
- Incoming Fee: The recipient’s bank may also charge a fee for processing incoming transfers, which again varies by amount and country of origin.
- Forex fee: A foreign exchange fee may apply for currency conversion, varying based on the exchange rate and the bank's policy.
It's important to clarify that SWIFT money transfer fees vary by bank. Each institution sets its own charges for outward transfers. Here are some popular Indian banks and their SWIFT charges:
ICICI Bank
| Mode of Remittance | SWIFT Money Transfer charges (INR) |
| SWIFT transfer initiated through ICICI Bank (all currencies other than USD in USA) | 1000 |
| SWIFT Transfer initiated through ICICI Bank branch (USD in USA) | 1500 |
| SWIFT Transfer initiated through ICICI Bank Internet Banking / iMobile Pay App (all currencies other than USD in USA) | 750 |
| SWzTransfer initiated through ICICI Bank Internet Banking / iMobile Pay App (USD in USA) | 100 |
HDFC Bank
| Amount | SWIFT Money Transfer charges (in INR) |
| Up to USD 500 or equivalent | 500 |
| Above USD 500 or equivalent | 1000 |
PNB
PNB’s SWIFT money transfer fee stands at INR 500 + GST. However, it is worth mentioning that additional commissions ranging from INR 500-1000 may also be levied depending on the amount that is being sent abroad.
Yes Bank
Yes Bank’s charges for SWIFT money transfers depend on the type of savings account you have. The following table shows the different types of YES savings accounts and their corresponding SWIFT charges:
| YES FIRST | YES PREMIA | YES Prosperity and Other Variants |
| INR 250/transaction | INR 500/transaction | INR 750/transaction |
How Long Does a SWIFT Money Transfer Take?
While SWIFT claims that 89% of international transactions are processed within an hour, that doesn't tell the full story. The clock only starts when the sender’s bank sends the payment to the SWIFT network and stops when the receiver’s bank acknowledges it. After that, your bank will contact you for ‘disposal instructions.’ This may require you to submit documents, fill out forms, or deal with forex rate fluctuations. As a result, the entire process can take up to 5 business days or more, with additional delays caused by factors like:
- Incorrect recipient information
- National or bank holidays
- Processing times of the banks involved
- System outages or technical issues
Therefore, it is always a good idea to double-check relevant information to receive your SWIFT payments in a timely manner.
SWIFT Money Transfer Vs Virtual International Bank Accounts: Which One Should You Pick?
While the SWIFT payment system is the go-to for cross-border transfers, its high costs and longer processing times have prompted businesses to seek alternatives. One viable solution is international virtual bank accounts. Platforms like Skydo offer businesses free virtual accounts in major regions, including the US, UK, Europe, Canada, Australia, and Singapore. These virtual accounts operate like local bank accounts, allowing businesses to receive payments via local transfers instead of incurring SWIFT fees.
For instance, if your client is in the US, they can make a local transfer to your US-based virtual account, avoiding SWIFT fees and delays. Skydo consolidates these payments and transfers the funds to India at live forex rates, ensuring exporters receive the full amount without losses from unfavourable exchange rates. The converted funds are deposited directly into your local Indian bank account within 48 hours, providing a fast, cost-effective, and transparent alternative to SWIFT.
In conclusion, while SWIFT money transfers remain a popular choice for international transactions, alternative solutions like virtual bank accounts offer speed and cost savings. Consider switching to Skydo for a seamless payment experience.
What are some of the essential documents for a SWIFT money transfer?
Some essential documents include the sender’s name and address, the recipient’s name, address, SWIFT code, purpose of payment, and transfer amount.
Is SWIFT money transfer safe?
Which Banks are best for SWIFT Money Transfers?
How long does a SWIFT bank transfer take?
Is a SWIFT Money transfer free?
