SWIFT

What is SWIFT?

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a cooperative of banks, founded in 1973, and a secure network for exchanging financial messages. Banks use it to exchange payment instructions, confirmations and statements. The funds themselves move through correspondent accounts, while SWIFT only delivers the message.

## How it works

Each participant has a BIC code (also called a SWIFT code) that identifies it on the network. The sending bank creates the message in a standard format (historically MT, now gradually moving to ISO 20022, the MX format), and the payment then passes through a chain of banks: the sending bank, a correspondent bank and the receiving bank. Each intermediary may deduct a fee, so the amount sent and the amount received often differ.

## Where it is used in high-risk verticals

In fintech and payments, SWIFT is used for large B2B transfers, payments to partners and overseas suppliers, settlements with payment agents, and transfers to merchant bank accounts in different jurisdictions. For high-risk businesses, it is one of the most closely monitored channels: banks check the payment purpose, the country and the counterparties against sanctions lists.

## Impact and common mistakes

Delays and rejections are most often caused by incomplete details, an incorrect BIC, a payment purpose that does not match the business description, and sanctions screening filters being triggered. A common mistake is failing to specify who pays the intermediary fees: the OUR, SHA and BEN options allocate costs differently, and the recipient may receive less than expected. It is also important to keep supporting documents, since banks request them for every non-standard transfer.