Most cross-border payments in the world are sent over SWIFT network. According to official statistics, on average 44.8 mln messages were processed by SWIFT in 2022. While the internet is full of articles on how SWIFT is reliable and becomes even better over time, those who pay often using SWIFT know that sometimes it takes several months to receive their payment. Here we have collected everything you need to know from basic terms to methodologies of SWIFT payments investigation.
Fin Messages
Information between banks in SWIFT network transfers with Fin messages. The most common one is MT103:
MT103 - single customer credit transfer. The most common Fin message across SWIFT network which confirms a funds transfer from one bank to another.
Take a look at our examples of MT103 forms. It contains structured fields with information about sender, beneficiary, banks involved, amount, currency, value and some other. You can find here a full description of MT103 fields.
Each MT103 message can be identified by UETR code or/and Sender's Reference Number.
UETR - Unique End-to-End Transaction Reference, 36-character alphanumeric code that serves as a unique identifier for a specific payment transaction. Here is an example of UETR code: de2da6c9-18be-48d4-8053-867ed90a316a.
Suggested reading: Where to Find a SWIFT Reference Number and a Role of UETR Code.
You will need MT103 form and UETR code in order to track a status of your SWIFT payment or when beneficiary contacts his bank to speed-up compliance procedures.
Correspondent Banking
Most of cross-border payments go via correspondent and/or intermediary banks. They are required to build a trust and transfer funds between two banks which don't have direct relations.
A correspondent bank is a third-party financial institution that acts as a go-between for domestic and foreign banks that need to conduct cross-border payments with each other.
There could be more than one bank involved between sender's bank and beneficiary's. The basic rule of safe SWIFT transfers - the more banks in a chain, more potential problems could happen. You can check in advance which correspondent banks will your payment go through and sometimes even influence the route.
TrackMySwift has an access to a database of correspondent banks. You can find sender's or beneficiary's bank by a swift/bic code and request a list of their correspondent accounts.
Establishing new correspondent relations is very challenging for banks, so normally they value them and try to prevent de-risking catastrophe by establishing procedures for due diligence of each cross-border payment and overall KYC/KYB procedures.
Lost SWIFT Payments
SWIFT payments cannot be irrevocably lost, however they can take an unacceptable time for a funds transfer.
Step 1. Understand the current status of the payment.
Check a status of your payment in GPI Basic Tracker. As a bare minimum, you will get a GPI Status Codes, but often you can also see some of the banks which a payment passed or even a full chain. Sender can also request this information in his/her bank.
Step 2. Request a status from a beneficiary's bank.
If your payment is in progress (ACSP), take MT103 form, all supporting documents and ask beneficiary to contact his/her bank. Most of the time, payments stuck in beneficiary's banks, waiting for compliance procedures. Please note that only beneficiary himself can do that, you can contact his/her bank as a sender.
Step 3. Perform a payment investigation or a payment recall.
If your payment was sent 3 or more weeks ago and still funds were not credited, you probably need a payment investigation. It could be only performed from a sender's bank. Bank will send Fin messages over SWIFT network via the same chain of banks asking about status and reason for delay. Please note that banks often charge ~ $50 USD for a payment investigation procedures.
You can also ask to recall a payment. Check a better route to avoid a long chain of correspondent banks before re-sending a SWIFT payment.
Step 4. Check if your actions have any result.
When you track a SWIFT payment, you see a last update date. Basically it means a date when the last time something has changed, at least internally in a current bank. If nothing changes, your previous efforts were not enough and you need to escalate a situation. Find a right person in a customer service or in a branch who will be kind enough to talk with back-office colleagues responsible for international payments.
There is an only one exception when a payment could never be delivered to a beneficiary and return back - sanctions. If your payment has been blocked under sanctions, you need to get a license to unblock it. Normally, bank should provide with an info related to a jurisdiction. For USA it is OFAC, for UK it is OFSI, for European Union it depends on a country. To make it more complicated, if you've transferred US dollars from a bank under sanctions to, for example, Standard Chartered, you could require to receive both OFAC and OFSI licenses.
Suggested reading: How Long Can a SWIFT Payment Take?
Alternatives
There are several alternatives to SWIFT payments. Euro-based payments inside European Economic Area go via SEPA, which is normally more reliable. Chinese yuan (renminbi) often sent via CIPS. Below we have collected more universal solutions:
- Bridge between national payment systems - there are several fintech projects, like Wise, which allow to receive payments in one currency via national payment system, for example, ACH in USA, convert them to another currency and send over other payment system, like SEPA in euro. In some scenarios you can fully avoid SWIFT.
- Cryptocurrency - transfers of stablecoins, like USDT, normally takes maximum 40 minutes with all network confirmations involved. They are fully traceable and often the price is $1 per transfer. For geographies where cryptocurrency transfers are legal, it could be a perfect solution. Use Binance or other well-known cryptoexchanges to avoid scam and high transfer costs.
- Card-based money transfers - VISA and Mastercard provide services for banks to make low-value direct card-2-card transfers. Please keep in mind, that not every bank accepts those transfers, so try a minimum payment first to check. If your bank doesn't have built-in functionality to send money directly to the card, you can try external services like a Paysend.
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