SWIFT payments are international transfers sent using the Society for Worldwide Interbank Financial Telecommunications, one of the leading messaging systems across the globe.
Banks and financial institutions are connected to the SWIFT to send and receive money transfer information, as well as communicate security and treasury transactions. On a daily basis, 11 000 financial institutions in 200 countries worldwide rely on SWIFT’s messaging network. Millions of transactions in many different currencies are sent from one financial institution to another anywhere in the world.
SWIFT was initially created to streamline treasury transactions, but later the platform’s flexibility allowed the organization to expand and offer messaging services to banks and non-bank financial institutions, security dealers, asset management companies, depositories, foreign exchange and money brokers, brokerage institutes and trading houses, etc.
Why is SWIFT important?
There are many messaging services available in the market, including Ripple, SEPA, CHIPS, etc., but SWIFT has the leading position worldwide. The organization commits to deliver operational excellence with the zero-risk approach to failure and continually invests in the infrastructure to increase security and reliability.
By now, SWIFT messaging service has added new message codes and sends a variety of transactions, including security and treasury transactions. 50% of its communications are payment-based messages, but security transactions account for 43% of total traffic. The most recent initiative by SWIFT is the Global Payments Innovation (gpi) that provides transparency over a cross-border transfer in real-time.
How does SWIFT work?
SWIFT network doesn’t transfer money but uses SWIFT codes to send payment information between accounts in banks. It is recognized for standardization of International Bank Account Numbers (IBAN) and Bank Identifier Codes (BIC, also known as SWIFT codes) formats, providing concise and transparent transfer information. A secure, standardized and reliable environment of the BIC system ensures that SWIFT can quickly identify a bank and facilitate automated information processing required to send payment orders between banks and financial institutions.
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