A brief history of SWIFT transfers
SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications which is a member-owned cooperative network designed to improve the communication of financial transactions. The network was set up in 1973 to support electronic international wire transfers.
The SWIFT headquarters are based in La Hulpe, Belgium and the organization employs nearly 3,000 people as part of a cooperative society under Belgian law. Readers arranging an international money transfer will do well to learn more about SWIFT codes, how the network operates, and the safety procedures in place.
What is a SWIFT code?
Each financial institution included in the SWIFT network is assigned a unique ID code 8 - 11 characters long which identifies the name, city, country, and branch.
For example, the UniCredit Milan branch can be identified by using the SWIFT code UNCRITMM. The code can be broken down as follows:
Characters 1-4: UNCR refers to the bank name; UniCredit
Characters 5-6: IT stands for the bank’s country; Italy
Characters 7-8: MM stands for the city code or location; Milan
Characters 9-11: These are optional and used to specify the exact bank branch
When a transfer is initiated, the sender’s bank will communicate transaction details with the recipient bank. The SWIFT network is used to communicate instructions and only once a SWIFT message has been received can the funds be released and deposited into the designated account.
Find out everything you need to know about SWIFT codesPros and Cons of SWIFT Transfers
In this section we will outline the distinguishing aspects of this kind of transfer, to help our readers decipher the difference between SWIFT codes and other bank codes.
Pros
Cons
How a SWIFT transfer works
Setting up your first SWIFT transfer may be a daunting prospect so we will have put together a step-by-step guide for sending and receiving this type of payment.
Sending money
Step 1: Start by creating a bank account with a bank that allows for SWIFT transfers.
Step 2: Navigate to money transfers and enter the recipient details. You will need to enter the account number and SWIFT code to complete the transaction.
Step 3: Enter the amount you wish to send.
Step 4: Review the details for accuracy before confirming the transaction.
Receiving money
Step 1: Create a bank account with a bank that accepts SWIFT transfers.
Step 2: Provide your bank account details to the recipient, which should include the SWIFT code.
Step 3: Look out for confirmation of money arriving in your account.
Alternatives to SWIFT transfers
This section will showcase the best alternatives to SWIFT transfers that provide you with different unique advantages that could save you money and reduce transfer time.
1. Balance transfers
Money transfer companies Wise offer balance transfers. Typically, all you need for transfers is the recipient’s email address or other unique identification code. Most balance transfers have an instant transfer time, which offers an advantage over SWIFT transfers.
Also, balance transfers can save you money compared to using the SWIFT network. Some companies offer free balance transfers no matter the transaction size. This is perfect for customers that want to send small amounts without incurring charges.
2. Cash pick up
Cash pick up is ideal when the recipient does not have a bank account to receive funds. You can send a money order to a specific bank branch or other pick up location. The recipient will need to bring their ID and transaction details to pick up the money. Most cash transfers can be picked up immediately after the transfer has been initiated. However, they can come with expensive charges depending on the pick up location.
3. Personal checks
This old-fashioned money transfer method takes a long time because the check needs to physically arrive in the recipient's hands. Then they have to take the check to a bank branch or other location for the funds to transfer.
Bottom line
In conclusion, SWIFT transfers are a safe and widely accepted money transfer method that you can use to send money internationally. However, it is limited by transfer time and the costs can be high compared with what alternative transfer providers offer.Consider learning more about bank transfers by checking out our guide on if bank transfers are safe. It will help you determine how to avoid scams and the different transfer options available to you.
