What are SWIFT transfers and how long do they take?
SWIFT payments are a method of making an international money transfer sent by the SWIFT international payment network. SWIFT stands for ‘Society for Worldwide Interbank Financial Telecommunication’, and is the largest and most widely used financial messaging system in the world.
What is a SWIFT transfer?
A SWIFT transfer is otherwise known as an international money transfer, SWIFT is simply the dominant messaging system used to transfer money across the globe to recipients in different countries.
Founded in 1973, the SWIFT payment system consists of 11 thousand financial institutions, located in over 200 different countries worldwide and there are more than 35 million SWIFT transactions taking place every day. SWIFT has become the most dominant and standardised method for sending money to recipients in different countries safely, securely and relatively quickly.
What are SWIFT/BIC codes?
BIC stands for ‘Bank Identifier Code’ and are used when transferring money between bank accounts. A BIC Code (BIC number) is a unique address that identifies financial institutions involved in cross-border payments.
A SWIFT/BIC Code consists of eight to eleven characters (numbers and letters) which comprise the first three or all four of the following:
- Bank Code
- Country Code
- Location Code
- Branch Code
For example, the BIC code of ABN AMRO CAPITAL USA LLC is: FTSBUS33.
Also known as SWIFT-BIC, SWIFT ID or SWIFT code. BICs are standardised, allocated and managed by the SWIFT payment network. Each bank that is a member of SWIFT is assigned its own unique code and these are public information so can easily be found online on the bank’s own website.
How long does a SWIFT transfer take?
SWIFT money transfers are by no means instant. It can take around one to four working days for your funds to reach the destination bank account, with the length of time varying based on the destination country, variations in time zones and differing banking processes. In addition to this, there are multiple checks in place for fraud and laundering which add to the length of time it takes to transfer funds.
If your bank doesn’t have a direct relationship with the destination bank, the money will also have to go through an intermediary bank before it is passed to your recipient, again adding to the length of transfer time.
Are there any fees when using a SWIFT payment system?
There are two factors to consider when it comes to the fees involved in using the SWIFT payment system, the fees charged by your bank and the exchange rates. The overall costs are determined by your bank’s fees and the exchange rates you agree to.
When making a SWIFT transfer, your bank is likely to charge a fee:
- Transfer fees
- Recipient fees
- Correspondent fees (only if your money needs to go through an intermediary bank in transit)
- Priority fees (only if you need your money to get there quicker)
Some examples of the fees charged by main UK banks are Lloyds charging £9.50 to transfer and £12 for recipients and HSBC charging £4 to transfer online or £9 in-branch and £8 for recipients.
The largest cost involved in carrying out SWIFT money transfers is the exchange rates, which vary depending on how much you’re transferring and the current exchange rate at the time of sending your money. Most main banks charge around 3 to 5% for exchanging your money to the recipient’s currency.
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How to transfer money using the SWIFT international payment system
You will need the following information:
- Name of your recipient
- Address of your recipient
- Name and address of your recipient’s bank
- BIC code (otherwise called SWIFT code) of the destination bank
- Account number or IBAN number of your recipient
The process of making a SWIFT transfer:
- Anyone attempting to transfer money internationally will need their identity verified. To do this, your bank will usually request a photo of your passport and a recent bill to confirm your address.
- You will then need to send your money to the bank you’re using to transfer your funds.
- The bank you are using to SWIFT transfer will send you a quote with their current exchange rate, which you can then choose to accept or not. Or, you can use an online currency exchange platform to benefit from the best exchange rates and smaller charges when sending large sums of money.
- If you accept the exchange rate, it then becomes fixed and your money will be converted to the destination currency and sent using the SWIFT system to your destination bank account.
- You’re all done!
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