How a SWIFT Payment Works and Other SWIFT Services

How a SWIFT Payment Works and Other SWIFT Services

Today, it’s quite simple to transfer money from country-to-country using international banking and services such as a SWIFT Payment. SWIFT, which stands for Society for Worldwide Interbank Financial Telecommunications, is an extensive messaging network used by banks around the globe to securely transmit information and instructions through a standardized system of codes. According to Investopedia, nearly 10,000 SWIFT member institutions send approximately 24 million messages on the network every day.

In this article, we’ll explore how a SWIFT payment works and the other services available through the global messaging network.

How a SWIFT Payment Works

SWIFT is an identifier and also referred to as a Bank Identifier Code (BIC), which is used in many countries around the world. This eight (8) to eleven (11) digital code contains information about the receiving country, bank, and branch. When using SWIFT, your organization will also have to include its unique account number. Each bank has its own unique bank code and every country has an official two-letter ISO country code. Financial institutions also have unique location codes.

Most international banks require an IBAN code along with the SWIFT code and account number to process transactions and messages. The combination of these codes, when used during financial communication, encompasses all the information necessary to get a payment from one bank to another bank while mitigating errors.

In many cases, the SWIFT code is incorporated into the IBAN detail. But there are times where the SWIFT code is not built into the IBAN. In that case, the bank will likely request the SWIFT code separately. As a result, organizations should always have their SWIFT, IBAN, and account number on record and easily accessible. For executing payroll across borders, SWIFT validation helps decrease errors, improves the efficiency of money transfers and ensures your employees are paid on time.

Additional Services Offered by SWIFT

Messaging and Connectivity: Through an exclusive messaging environment, SWIFT provides a secure, reliable, and scalable network for a streamlined movement of messages relating to financial transfers and transactions. There are several methods for customers to connect to the SWIFT environment, which include directly via permanent leased lines, the Internet, or SWIFT’s cloud service (Lite2). SWIFT also provides a range of interfaces, providing seamless links between users’ internal systems and the SWIFT environment. These additional products give its customers the tools and abilities to send and receive transactional messages quickly and easily.

Compliance Management

When it comes to international payroll, managing compliance is critical. SWIFT offers exclusive crime compliance services for its customers to help them reduce the cost and complexity involved in tackling sanctions and Know Your Customer (KYC) requirements. Small to mid-sized institutions benefit from the SWIFT managed service by getting extra assistance with monitoring financial transactions and larger institutions gain third-party assurance that their sanctions environments are performing properly.

The KYC Registry enables banks to exchange a standard set of due diligence information, mitigating the cost of data collection and enabling effective decision-making, according to the SWIFT website. The data bank and analytics services help banks identify, investigate and reduce possible compliance risks related to financial transactions and correspondent relationships.

Software

SWIFT offers integration and messaging management solutions to support everything from the high volume messaging needs to the lower volume, cost-sensitive needs of smaller banks and corporations. The SWIFT software supports all financial messaging needs, while offering options for storage, formatting, translation/conversion, archiving, as well as repair functionalities.

Business Intelligence

SWIFT also offers its customers integrated dashboards and reporting utilities to provide dynamic, real-time access to messages, activity, trade flow, and reporting.


In addition to understanding the ins and outs of SWIFT payment, your organization will need to maneuver treasury management while paying employees across borders. Celergo makes it easy to manage payroll by accepting payments in a single currency (US dollars, British pounds, or Euros) and then converting it to local currency.

We also handle payments to employees, statutory agencies, and benefit providers.

Since we’re the ones doing it, we take full responsibility for funding that passes through Celergo’s treasury operations, because that’s the Celergo Guarantee. To find out more, get in touch with our team today!

 

 

**This article is for informational purposes only. It is not intended to constitute legal advice.

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