What is SWIFT? How the SWIFT payment network works in 3 steps

Key takeaways:

• SWIFT is a secure messaging network that banks use to send payment instructions across borders. It is not a bank, and it does not move money itself.

• SWIFT says 90% of cross-border payments reach the receiving bank in under an hour. Delays often happen later, before the funds are credited to the recipient’s account.¹

• Airwallex sends 94% of transfers through local payment rails instead of SWIFT, helping you save on SWIFT fees.

What is SWIFT? It stands for the Society for Worldwide Interbank Financial Telecommunication, and it’s a secure messaging network that banks use to send payment instructions to each other across borders.

This guide explains what SWIFT is and how a SWIFT payment works in three steps.

You will also see what a transfer can cost a Singapore business, how newer upgrades improve tracking, and when local payment rails are faster.

What is SWIFT and why does it matter?

Think of SWIFT as the courier, not the vault. It carries instructions from one bank to another, while the money moves through the banks’ own accounts.

Banks created SWIFT in 1973 to replace the telex, an older messaging system. The network went live in 1977, and Singapore started live operations at the start of the 1980s.² Today, SWIFT carries more than 53 million messages a day.¹

SWIFT also supports securities transactions and offers compliance and treasury tools for banks and corporates.

How SWIFT payments work in 3 steps

When you send an international transfer through your bank, it uses the SWIFT network to send payment instructions to the recipient’s bank. Here’s how the process works, using a Singapore bank as an example.

Step 1: Gather the recipient’s bank details

Before you make a SWIFT payment, you’ll need the recipient’s full name and address, account number, and bank name and address. You’ll also need the recipient bank’s SWIFT code.

A SWIFT code, also known as a Business Identifier Code (BIC), identifies a bank. It has 8 characters, or 11 if it includes a 3-character branch identifier. The code contains the institution code, country code and location code, with the optional branch identifier at the end.³

Our SWIFT/BIC code guide explains how the code works, with examples from Singapore banks.

A SWIFT code identifies a bank, not an individual account. An International Bank Account Number (IBAN), where used, identifies a specific bank account. If you’re sending money to a DBS account, see our DBS SWIFT code guide.

Step 2: Request the transfer and check the fees

You can usually make a SWIFT transfer through your bank’s online banking platform or at a branch. Before confirming the payment, check the transfer fee and whether any additional charges may apply.

For example, DBS lists a S$20 cable charge for regular online overseas transfers.⁴ Agent bank charges may also apply. These are fees charged by intermediary banks that help route the payment to its destination.

Depending on the payment arrangement, you may be able to choose whether you or the recipient pays these charges.

For USD transfers, DBS warns that intermediary banks may deduct their fees before the money reaches the recipient. This means the recipient could receive less than the amount you sent.

Step 3: Confirm the destination and currency, then wait for the funds

Before submitting the transfer, confirm the recipient’s country and the currency you want to send. Your bank will then process the payment through the SWIFT network.

According to DBS, regular overseas transfers generally take 2 to 4 working days.⁵ If you submit a transfer on a weekend or a public holiday in Singapore or the destination country, processing may begin on the next business day. Additional compliance checks can also delay the transfer.

SWIFT upgrades: GPI, ISO 20022 and Swift Go

SWIFT has introduced several services and standards to improve cross-border payments, from tracking transfers to sharing more detailed payment information. Here are three key developments to know about.

SWIFT GPI: tracking cross-border payments

SWIFT Global Payments Innovation (GPI) helps banks track cross-border payments from start to finish. Each payment has a Unique End-to-End Transaction Reference (UETR), which allows banks in the payment chain to track its progress.

SWIFT reports that nearly 60% of GPI payments reach the end recipient within 30 minutes.⁶

Since 22 November 2020, financial institutions and payment system participants in scope have been required to confirm whether a payment has been credited, placed on hold or sent outside SWIFT.⁶

If you want to track your transfer, check whether your bank supports SWIFT GPI tracking.

ISO 20022: richer payment data

ISO 20022 is a global standard for exchanging financial information. It allows SWIFT payment messages to carry more detailed, structured data throughout the payment process. This can give recipients clearer remittance information and help banks carry out compliance checks more accurately.

Swift Go: low-value international payments

Swift Go is designed for consumers and small businesses sending low-value international payments. It supports payments of up to the equivalent of US$10,000.⁷

Before sending a payment, customers can see the applicable fees and exchange rate. Participating banks also commit to ensuring the recipient receives the full amount sent, subject to the service's terms.

Swift Go is available only through participating banks, so check with your bank to see whether it offers the service.

Who uses SWIFT, and who oversees it?

SWIFT connects banks and other financial institutions around the world, but it also operates within a regulatory framework. Here’s who uses the network, how sanctions affect access, and who oversees its operations.

Who uses SWIFT?

Banks, financial institutions and corporations use SWIFT to exchange financial messages. Other organisations can also join if they meet SWIFT’s eligibility requirements.

SWIFT and sanctions

SWIFT is a cooperative messaging network, not a body that decides who should be sanctioned. Governments impose sanctions, and SWIFT must comply with applicable laws and regulations because it is incorporated under Belgian law.

In March 2012, an EU regulation required SWIFT to disconnect certain Iranian banks subject to EU sanctions. Many were reconnected in January 2016 after the EU lifted the relevant sanctions.⁸

In March and June 2022, SWIFT also disconnected designated Russian and Belarusian entities and their designated subsidiaries in line with EU regulations.⁸

Who oversees SWIFT?

SWIFT is overseen by central banks, with the National Bank of Belgium acting as the lead overseer. The G-10 central banks and the European Central Bank are involved in this oversight framework.⁸

The Monetary Authority of Singapore also participates in the SWIFT Oversight Forum, where central banks exchange information on oversight.

Advantages and drawbacks of SWIFT

SWIFT makes it easier for banks to exchange cross-border payment instructions, but transfer speed, fees and the time it takes for funds to reach the recipient can vary. Here’s a quick overview:

SWIFT's figures distinguish between payments reaching the receiving bank and funds being credited to the final recipient. Delays can occur during processing at the receiving bank or elsewhere along the payment chain.⁹

SWIFT vs wire transfer

A wire transfer is an electronic transfer of money between bank accounts, whether domestic or international.

SWIFT, by contrast, is a messaging network that banks use to exchange payment instructions. It doesn't move money itself; the banks and other financial institutions handle the actual transfer of funds.

Why Singapore businesses choose Airwallex for transfers

Regularly make overseas transfers? Instead of relying on SWIFT transfers, Airwallex lets you use local rails with $0 transfer fees. Here’s what you get with Airwallex:

• Lower transfer costs: 94% of our transfers go through local rails with $0 SWIFT fees.

• Faster payments: Local payment rails avoid intermediary banks and help eligible transfers reach recipients faster. 93% of Airwallex’s transfers arrive on the same day.

• Hold multiple currencies: You can hold funds in 20+ currencies and use those balances to pay overseas suppliers, avoiding unnecessary currency conversions.

You can sign up for an Airwallex account fully online. There are no setup fees, monthly fees, or minimum balance requirements on the free Explore plan.

Frequently asked questions

What is SWIFT, and is it a bank?

SWIFT is a global cooperative that runs a secure messaging system for banks, and it is not a bank itself. It does not move money. Your bank or another institution carries out the actual transfer of funds.

Who owns SWIFT?

SWIFT is owned and controlled by its shareholders, which are financial institutions. It has approximately 2,400 shareholders, and they elect a board of 25 directors.⁸ SWIFT is a cooperative company under Belgian law.

How long does a SWIFT transfer take?

It depends on the route and the receiving country. SWIFT says 90% of cross-border payments reach the receiving bank in under an hour, but delays often happen before the funds are credited to the recipient’s account.¹ DBS says its regular overseas transfers generally complete within 2 to 4 working days.⁵ In comparison, 93% of Airwallex transfers arrive on the same working day.

Is SWIFT safe?

SWIFT describes itself as a secure messaging network, and it does not hold your money. It reported 99.99% availability for its FIN messaging service in 2024.¹ It also runs a Customer Security Programme to help customers protect their SWIFT-related systems from cyber threats.

Does Singapore use SWIFT?

Yes. SWIFT supports the Singapore dollar, and the Monetary Authority of Singapore takes part in the SWIFT Oversight Forum, where central banks share information on oversight.⁸

Is SWIFT only for large companies?

No. SWIFT says its network can support payments of all sizes, from an individual sending wages home to a small business buying supplies overseas. Organisations that connect directly must meet SWIFT’s eligibility rules.

Sources

1. https://www.swift.com/about-us/who-we-are

2. https://www.swift.com/about-us/who-we-are/our-story

3. https://www.swift.com/standards/data-standards/bic-business-identifier-code

4. https://www.dbs.com.sg/personal/support/bank-overseas-funds-transfer-fees-and-charges.html

5. https://www.dbs.com.sg/personal/support/bank-overseas-funds-transfer-service-standards.html

6. https://www.swift.com/products/swift-gpi

7. https://www.swift.com/products/swift-go

8. https://www.swift.com/about-us/legal/compliance-0/swift-and-sanctions

9. https://www.swift.com/insights/news/swift-data-shows-focus-needed-beneficiary-leg-faster-international-payments