What Is The Swift Banking System?

So, you have to send money to someone on the other side of the globe. Your main concerns are transaction security and speed. For many people, that’s where the wire transfer vs direct deposit debate begins. Technology has made it possible to submit your transfer request online. This is a quick and easy way to get money to friends and family in other countries. But have you ever stopped to wonder how such transfers are possible? The Society for Worldwide Interbank Financial Telecommunications (SWIFT) system is behind it.

So, what exactly is the Swift banking system? It’s the intricate network responsible for sending money transfer instructions in a quick, accurate, and secure way. Banks and financial institutions alike use this system. As you may want to know how long does a domestic wire transfer take, and we’ll also discuss how long SWIFT transfers take, among other aspects.

How SWIFT Transfers Works

SWIFT is an international payment network. It allows safe and secure financial transfers around the globe. Banks use this messaging network to send information and money transfer instructions securely. And this is done through the use of standardized codes. But for banks to enjoy this service, they must be members of the SWIFT co-operative. Each member institution affiliated with the network receives a unique identification code. The special ID code is commonly known as the SWIFT code. It identifies the bank in question and its country, city, and branch. 

Once you start the transfer, your bank sends a payment transfer SWIFT message to the recipient’s bank. This is done via the SWIFT network. The SWIFT code contains eight or eleven characters. The first four characters represent the bank, the next two are the country code, and the next two are the city code. The last three, which are optional, represent the individual branches. The bank in question gives the customer the SWIFT code to facilitate the transfer. Once the receiving bank gets the SWIFT message concerning the incoming payment, it clears and credits the money to the recipient’s account. The process can take anywhere between one to four working days.

Factors That Affect The Transfer Time Frames

The time it takes for the recipient to receive funds depends on several factors. The destination, time zones, and various banking procedures are the culprits that can lengthen or shorten the processing timeframes. SWIFT transfers aren’t instant because banks conduct anti-money laundering and anti-fraud checks on the funds before crediting the recipient’s account. Another reason that drastically affects the time frames is whether the two banks handling the transfer have a direct relationship or not. By direct connection, we mean the two banks have commercial accounts with each other. If that’s the case, naturally, the process will go much quicker and easier. 

Unfortunately, if the two banks don’t have commercial banks with each other, then the process becomes a tad complex, not to mention slower. That’s because a third party, referred to as the intermediary bank, becomes part of the equation.  The intermediary bank is the bank where the two banks have commercial accounts. And the intermediary bank becomes responsible for facilitating the transfer. As if that’s not enough, it’s not uncommon for both banks to not have commercial accounts with an intermediary bank. When this happens, more than one intermediary bank has to be involved, dragging out the process even longer, not to mention increasing the fees. Also, when there are different currencies involved the processing time is further extended. So while the SWIFT system is highly reliable, it’s also quite slow.


The SWIFT transfer system used by banks and financial institutions is why you can transfer funds to someone in another country with ease. And the process takes anywhere from one to four business days, depending on the banks’ procedures, relationships, time zones, and involved currencies.

Content Disclaimer:
As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.

App Disclaimer:
The Cashero App is now available for download in both the Apple App Store and Google Play Store, though not all features are currently functional. Cashero has not yet officially launched.

Categorized as Tips

Leave a comment

Your email address will not be published. Required fields are marked *