SWIFT alternatives for businesses

3 minutes
Business tips
SWIFT alternatives for businesses
In this article

For most people and businesses around the world, SWIFT is the default method of sending money across borders. The Society of Worldwide Interbank Financial Telecommunication is a global messaging network that allows banks and other financial institutions to carry out international money transfers, and it has been in operation for over 50 years. 

Although it is widely used, SWIFT has been criticised for its inefficiency, and alternatives have emerged in recent years, such as Airwallex, that provide a more streamlined service. For businesses that transfer funds across borders on a regular basis, it is worth investigating these alternatives to ensure that the speed and cost of transfers is not hindering financial and operational success. This article will walk you through these options and the benefits they provide, to put you in the best position for continued global growth. 

The limitations of SWIFT

When you send money using SWIFT (this can also be referred to as a “wire transfer” due to the telegram-like system that was originally used) the payment order gets passed from the sender’s bank to the recipient’s bank, often via one or more intermediary banks. Each financial institution involved takes a fee, and these costs aren’t always clear upfront. The process, therefore, can be both costly and slow compared with more modern alternatives,

Alternatives to SWIFT

SWIFT isn’t the only system that facilitates international transfers. Airwallex is a payments and financial platform that leverages local payment networks — such as SEPA in Europe, ACH in the US, and BACS in the UK — to enable faster international money transfers. By leveraging local payment networks, Airwallex is able to reduce the cost and time it takes to send money globally. That’s why 70% of Airwallex transfers arrive instantly or on the same day. 

Benefits of alternative solutions

It can be tempting to have a mindset of ‘if it’s not broken, don’t fix it’ when it comes to financial transactions. However, businesses need to constantly look for new ways to streamline their operations or risk getting left behind. Benefits of alternative solutions such as Airwallex include:

Increased speed and efficiency

Because SWIFT payments rely on the cooperation of multiple financial institutions, SWIFT payments can take up to five days to process, and delays can happen without warning. This can cause problems if employees and suppliers are waiting for payments. With Airwallex, you can send money like a local to multiple countries, with most payments settling on the same-day.

Cost-effectiveness

Traditional SWIFT transfers come with a raft of fees that can’t always be calculated upfront. This makes financial planning tricky and introduces the risk of underpaying suppliers and service providers. As well as sending and receiving fees, there are fees to pay to each intermediary bank involved in a SWIFT transfer. There are also currency conversion fees which can be inflated depending on the financial institution you choose to send the money with. 

Airwallex offers businesses access to the interbank exchange rate, meaning our customers always get market-beating rates when sending money internationally.  

Streamlined workflows

One of the advantages of working with a modern, technologically advanced payment provider such as Airwallex is the enhanced features on offer. These include:

  • Global Accounts, which enable businesses to hold multiple currencies in their account and reduce unnecessary currency conversions.

  • Batch Transfers, which facilitate payments to multiple recipients across currencies and countries in one go.

  • Bill Pay, a feature which helps businesses save time by automating their accounts payable processes.

  • Borderless Cards, which enable businesses to spend globally in multiple currencies. 

  • Integrations with accounting software such as Xero and Netsuite, which enable automated reconciliation. 

Choosing the right payment partner for your business

When choosing a payments partner, there are several factors to consider, these include:

  • Business size: Larger enterprises may prioritise scalability and advanced features, while smaller businesses might emphasise simplicity and cost-effectiveness.

  • Compatibility: Evaluate your existing systems and consider whether the payment method is compatible with your methods and needs.

  • Transaction volume: Businesses that process a high level of transactions may particularly benefit from certain cost-efficiencies and automated services.

  • Geographic reach: If international transfers are important to your business, look for a provider that specialises in cross-border payments and offers additional features such as multi-currency accounts that let you operate like a local wherever your business expands to. You will also need to ensure you are compliant with any payments regulation in the territories where you operate.

  • Time-sensitivity: How crucial is the timeliness of payments to your business? If urgency is important, factor the speed of payments into your decision.

  • Costs, including hidden mark-ups: Price comparison is an obvious starting point, but don’t forget to include fees and markups that may not be clear up-front. These include currency conversion fees, FX rates that add percentage points to the interbank rate and intermediary bank fees.

  • Features and functionality: Don’t forget to look at functional features such as the ability to send batch transfers, schedule payments and integrate your payments with your accounting software. It’s an additional way to save time and reduce operational costs.

Here are some steps you can take to help you evaluate the options and make a decision:

Conduct an analysis of your business’s needs.

  1. Research SWIFT alternatives and compare their features, costs and user reviews.

  2. Talk to representatives of potential providers or request a trial or demonstration.

  3. Consider the future growth of your business, and check the provider will be able to continue to meet your needs as you expand.

  4. Consult with financial experts for specialised advice. 

Fast, cost-effective payments with Airwallex

Streamline payments to suppliers and employees around the world and access market-leading FX rates with Airwallex. Click here to learn more.

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