There are many times of international transfers and the SWIFT international payment network is one of many and is today still one of the most popular. It exists after an agreement made with large banks in the 70s to replace Telex as the system was too slow and lacked security. Today it is only able to send or receive certain currencies.
B2B Pay is able to receive payments in USD, GBP or EUR via SWIFT from many countries.
The history of SWIFT payments
SWIFT is acronym for Society for Worldwide InterBank Financial Telecommunications. It's an automated payment system many companies use to transfer funds between different countries. Normally there is a charge for this service and it is the standard method of international payments for banks around the world.
Back in the 70s Telex was the main communication tool that banks used to make international payments happen. In order to make improve upon the system which was too slow and lacked security seven international banks gathered to create a suitable replacement. After three years of work, they created a society that 230 banks joined from 5 different countries and that is how SWIFT came to be. It is a bigger beast now: +10000 members worldwide (in +200 countries) handling millions of messages everyday. Any financial institution with a banking license can become a member of SWIFT.
How to make a SWIFT payment online
If you use a virtual bank or online bank, all you need to is to login to your system and find the section for "special payments", "other payments" or "international payments". Then you follow on-screen instructions which usually asks for the following:
- The payment's destination, which is the country to which you are sending money to
- the beneficiary, which is who you are sending money to
- Country specific details which will be displayed automatically depending on who you are sending money to
- Remember: make sure you enter correct details; check if the country you are sending money to will accept the currency; check if the bank itself needs additional information.
Additional requirements: several countries require special information on payments going in and these need to be provided by the sender so the payment is credited properly. There are government regulations and not following these will either lead to delays or rejection of your payment.
How to receive a SWIFT payment
You are not typically charged to receive a SWIFT payment into your account. There is a possibility that the sender will request their bank to charge the receiving party at the moment of delivery. So make sure that is understood between you and the sending party. The charge is likely to appear as 'Cash Withdrawal' and may be between 20 and 50 euros or equivalent in your currency.
- For current account: account name, number, BIC, SWIFT of intermediary bank number, IBAN or similar account number
- For savings account: account name, number, BIC, SWIFT of intermediary bank number, IBAN and any additional information
As long as there is sufficient funds to cover the transaction and fees, there is no limits (minimum or maximum).
Fees & charges
The transaction fees vary between free and 50 euros (or equivalent in your currency). Be aware that this is not all the charges that are incurred. In order to convert your currency to any other currency there are massive fees involved depending on the market and every step of the day a bank takes a cut of your money. There are varying degrees of this and the same transfer may cost between 1 and 10% of the total amount being transferred. B2B Pay, for example, charges usually 1% for India while PayPal may charge up to 10% for the same route.
SWIFT requests in the EU and the US and between thee countries typically take no more than 48 hours with the normal transfer time being under 24 hours. For some countries, such as India, it may take up to 3 months for the transaction to be completed. See a list of SEPA countries here.
Conditions, typical rules & information
- Your personal data will appear on all related messages.
- Fees are likely to be non-refundable.
- SWIFT transfers are usually the full responsibility of the sending party. Claims or losses are unlikely to be recovered (although these are rare occurrences). Delays are possible and there is nothing one can do, generally speaking.
- it is not possible t recover charges made by receiving banks.
- There could be extra charges that come without authorisation from smaller markets. These are outside of a bank's realm of control.
- There could be multiple currency conversions in the process
- Rates may effectively be different than those provided at the time of signing a contract. It means that it may be higher or lower depending on circumstance and external factors.
- the typical total time for a transfer is 3-5 working days but it is possible that it takes 3 or more months to countries such as India.
- The transfer only starts once SWIFT receives and processed the request.
- Bitcoin and other cryptocurrencies. We advice that you are careful with such methods and refrain from using it unless you understand the concept and its inherent risks. It is usually safe in the right hands.
- Virtual bank accounts such as B2B Pay's offer which will certainly save you 80% and in the case of India, deliver money in 24 hours instead of 3 months.
- Online systems such as Paypal and several others which are just like banks, but operate online.
Questions & Answers
- What if I don't include an IBAN when working with EU banks? Payment processor won't be able to make your transfer. banks in Europe cannot accept incomplete requests.
- What is the purpose of an IBAN/BIC? An IBAN (International Bank Account Number) is the person or business bank account number in a standard international format. When used with a BIC (the number that identifies the bank), it makes international payments possible and automated, more secure and much faster. It also reduces errors in the process.
- Where can I find an IBAN/BIC/SWIFT details of the intermediary bank? For payments in to your account the IBAN, BIC and SWIFT intermediary bank details will appear at the top of your paper/online statement, typically directly above the list of detailed transactions. For payments out of your account, the IBAN details are provided by the person receiving the money. The BIC details are provided by the beneficiary bank or the beneficiary itself.
Country Specific information
- SWIFT Payments to/from Jordan: Beginning in 2/2/14, banks in Jordan are required to accept and process payments only with a valid IBAN. From 2/15, all payments need to have a payment purpose code included. All payments outside of these parameters are declined.
- SWIFT Payments to Russia (RUB): the Central Bank of the Russian Federation has the following requirements: Complete name and address of the beneficiary, the beneficiary's account number (20 digits), beneficiary's INN, complete address of the bank, BIK of the beneficiary's bank, account of the beneficiary's bank in the Russian Central Bank, VO-code, the letters VO + 5 digit payment code (written in format VO12345), explanation about the payment in English, the number and date of the transaction contract (inside the payment details field), NDS (VAT) amount. If no VAT is imposed on the goods or services, then you must add "BEZNDS".
- SWIFT Payments to India (INR). India has imposed new regulations and these are mandatory and specific to the country: remitter and beneficiary and their relationship, nature of the payment to the beneficiary, type of beneficiary account held (savings/nre/nro/etc), whether the payment is towards expenses of branch/liaison/project. Additional info may be required such as a unique identification number provided by local authority (Reserve Bank of India) to the beneficiary. If payment is invoiced or it is service based, details have to be included. We recommend that you include as much information as possible regarding the purpose of the payment.
- SWIFT Payments to Thailand. All SWIFT payment to Thailand require a stated purpose of the payment to go along with the payment instructions. if the purpose of the payment is not included (and details pertained to it, such as invoice or salary details) the payment will be rejected.
- SWIFT Payments to United Arab Emirates. All payments to the UAE must include an IBAN. This is a regulatory requirement. The UAE bank regulators also require the inclusion of a code that references the purpose of payment.
- SWIFT Payments to Saudi Arabia. Effective 1/ 2013, the Saudi Monetary Fund requires that payments into the country include an IBAN.
- SWIFT Payments to Brazil. As of 7/13, all payments sent to Brazil must include the IBAN. Payments above BRL 250,000 need to be accompanied with payer ID (CPF) and beneficiary tax ID
- Payments to Qatar. As of 31/12/13, payments sent to Qatar must include the IBAN.
- SWIFT Payments to Latvia. Effective 1/1/14, Latvia converted to using the Euro. Latvian Lats (LVL) are no longer an available currency option.
How does SWIFT or wire transfers work in international business
Unfortunately, thanks to ecommerce and global trade, both methods are beocming obsolete since businesses are required to have more agility and at the same time work with tighter margins. Therefore it is hard to rely on traditional methods of international money transfer.
SWIFT or wire transfers work similarly from individuals or businesses and requirements do vary on a per country basis. The most obvious difference is that as a business you are likely to be required to provide a lot more information to execute a transfer specially if you are doing this transfer for the first time. For example, you may be required to share copies of your company incorporation documentation, proof of address, invoices in order to establish the legitimacy of the transaction.