What is SWIFT Payment? How It Works and How Long It Takes

When managing cross-border payments, whether you’re paying an overseas supplier and staff or receiving funds from an international client, there’s a good chance your bank transfer will involve something called “SWIFT.” 

SWIFT network is a widely used method for international payments. Knowing how it works can help you send money correctly and understand the likely timing and costs beforehand, making it easier to plan your business operation.

In this article, we explain what a SWIFT payment is, how SWIFT payments work, and what costs to expect when making international payments.

SWIFT, which stands for Society for Worldwide Interbank Financial Telecommunication, is a global financial messaging network used by thousands of banks and financial institutions in more than 200 countries. It enables them to exchange secure, standardised messages related to financial transactions and payment instructions. 

A SWIFT payment is an electronic method for transferring money across borders in which banks use the SWIFT network to securely exchange payment instructions, either in local currency or in the currency of the country where the funds are being received.

SWIFT payments are synonymous with SWIFT transfers. You may also come across financial institutions that refer to SWIFT transfers as telegraphic transfers (TT) or international wire transfers.

They have different names due to historical and regional usage. “Telegraphic transfer” and “international wire transfer” are traditional banking terms, as the instructions to move money were sent via telegraph wires. Although the systems have evolved, many institutions still use these older terms to refer to international transfer.

SWIFT transfers are usually made on behalf of a personal banking or business customer looking to send money abroad. SWIFT itself does not move money; it transmits standardised messages between banks.

In essence, a SWIFT transfer involves a sending bank (Bank A) issuing a payment order to a receiving bank (Bank B), where the intended recipient’s account is located. Typically, these banks are in different countries.

While the process happens behind the scenes, it generally follows these steps:

Step 1: Payment details are submitted
The sender provides the necessary payment information to their bank, including the beneficiary’s name, account number, and SWIFT or BIC code.

Step 2: A SWIFT message is created and transmitted
The sender’s bank generates a structured SWIFT message containing the payment instructions. This message is securely transmitted through the SWIFT network to the beneficiary’s bank.

Step 3: The message is routed, directly or via intermediary banks
The SWIFT message is transmitted to the beneficiary's bank, either directly or through intermediary banks that help facilitate the connection between institutions.

Step 4: Settlement and crediting of funds
Once the beneficiary’s bank receives the instructions, it credits the recipient’s account. 

Banks settle these transfers through Nostro and Vostro accounts, which are accounts that banks hold with one another to facilitate international payments. In practice, settlement occurs by adjusting the balances recorded in these accounts.

One unique aspect of SWIFT transfers is the potential involvement of multiple SWIFT member banks, known as correspondent or intermediary banks, in completing a single transfer.

Within the global banking system, not every bank holds accounts with every other bank worldwide. When the sending bank and receiving bank lack a direct relationship, the payment must pass through one or more third-party banks called “intermediary banks” to reach its destination.

For example, a payment from a Hong Kong business to a supplier in Poland might route through major correspondent banks in both regions that maintain relationships with the local institutions.

One transfer can involve more than one intermediary bank, depending on the banking relationships, currencies, and countries involved. The inclusion of these additional banks can affect both the cost and the timeframe for the transfer.

A Hong Kong trading company needs to pay a UK supplier £25,000 for imported goods. The company banks with HSBC Hong Kong (SWIFT: HSBCHKHHHKH), while the supplier uses Barclays UK (SWIFT: BARCGB22XXX).

The Hong Kong company provides HSBC with the supplier's account details, Barclays' SWIFT code, and payment reference. HSBC sends a SWIFT message to Barclays with the payment instructions. Since both banks have an established relationship, the transfer process is handled directly without intermediaries.

HSBC debits the company's account, converts HKD to GBP, and Barclays credits the supplier within 24 hours. Both parties receive confirmation with a unique SWIFT reference number for tracking. Total fees: approximately HKD 200 for the transfer, plus currency conversion costs.

A SWIFT code is a unique identifier that plays a critical role in the secure and accurate routing of SWIFT international payments.

Each SWIFT code consists of standardised information that your bank needs to ensure your money reaches your beneficiary's bank account safely.

A good analogy for understanding the utility of SWIFT codes is to think of zip/postal codes in an address. If this international postal code is incorrect or missing, any letter sent to this address will never arrive.

The same thing applies if your money is transferred using the wrong SWIFT code.

SWIFT codes are made up of 8 or 11 characters (letters and/or numbers) and are formatted as follows:

It follows a specific structure:

• Bank code: 4 letters that identify the bank
• Country code: 2 letters that show the country
• Location code: 2 letters or numbers that indicate the city
• Branch code: 3 optional letters or numbers for a specific branch

Examples of SWIFT Codes in Hong Kong

• Statrys - STYSHKHH
• DBS – DHBKHKHH
• HSBC – HSBCHKHHHKH
• Standard Chartered – SCBLHKHH
• Bank of China – BKCHHKHH
• ICBC – UBHKHKHH
• Bank of East Asia – BEASHKHH

If you need to find your SWIFT code, there are a few helpful tips to make the process easier. 

1. Check your bank statement: Normally, banks include your SWIFT code on your account statements, both online and offline.
2. Check your bank’s website: You can easily find your SWIFT code by visiting the FAQs page or help centre.
3. Contact your bank directly: Reach out to your bank’s customer service via available channels, such as phone, email, and chatbot.

In addition, you may also use online SWIFT/BIC tools. Enter details such as the country, bank, and location, and the online SWIFT code tool will identify the correct one for you.

You can use one of these tools to verify your codes:

• BIC Code Search by IBAN
• The SWIFT Codes
• Bank Codes

To be 100% safe, triple-check the code you have found with the bank or the recipient.

For European transfers, you may also need an IBAN (International Bank Account Number) alongside the SWIFT code.

Here's a guide to help you successfully initiate a SWIFT payment.

1.  Prepare and Gather Necessary Information:

• Recipient's Bank Details: Collect the recipient's bank name, address, SWIFT code, and account number for accurate fund routing.
• Payment Amount and Currency: Determine the amount you want to send and in what currency. Ensure accuracy by double-checking exchange rates and any fees.
• Purpose of Payment: Provide a brief reason for the transfer (e.g., loan repayment, purchase) for compliance purposes.
• Personal Identification: Be prepared to provide personal ID documents, such as a passport or driver's license, as required by your bank.
• Adequate Funds: Ensure your account has sufficient funds to cover the payment and any fees.
• Fee Responsibility Codes: Decide who pays the fees with codes like OUR (you pay all fees), BEN (recipient pays all fees), or SHA (costs are shared).

2. Initiate the Transaction:

• Contact Your Bank and Complete Forms: Reach out to your bank or financial institution and provide all transaction details. You'll be required to fill out forms that include information about both the sender (you) and the recipient. Ensure all details are provided accurately.

3. Make the Payment and Await Confirmation:

• Provide Payment: Transfer the funds from your account to the designated bank account for SWIFT transfers.
• Await Confirmation: Once you've initiated the transaction, your bank will confirm the successful transfer. However, this may take anywhere from several hours to a few days, depending on various factors, such as payment processing requirements and the complexity of the transaction.

SWIFT transfers usually take between 1 to 5 business days. However, there are instances where delays can occur due to several factors, such as:

• National holidays in the countries involved in the transfer
• Incorrect information is being provided
• The involvement of intermediary banks
• System outages and clearing house processing times for certain currency corridors
• Regulatory compliance checks, including anti-money laundering (AML) screening and sanctions verification
• Time zone differences between sending and receiving countries

The accuracy of your payment details is particularly important. Even minor errors can trigger manual reviews, adding 1-2 days to processing time.

In extreme cases, payments may be held for manual review or rejected and returned to the sender if critical information is incorrect or compliance issues cannot be resolved.

However, a key advantage of using SWIFT is the ability to trace your transfer within its network using a proof of payment, known as an MT103 document. 

You can also track its real-time status using SWIFT GPI (Global Payments Innovation). 

If you notice that your transfer is taking longer than expected, you have the option to request a status update. This means you can get detailed information about the current stage of your transfer, helping you understand any delays and predict when it might be completed.

SWIFT transactions typically cost between USD 10 and USD 50 per transfer. Secondly, fees are derived from foreign exchange rate margins set by the banks involved in a SWIFT transaction.

Handling fees are charged by banks for facilitating SWIFT messages. If more banks are involved, more handling fees are incurred.

As SWIFT transfers are cross-border transactions, they must be converted from the sending country's currency to the receiving country's currency, triggering the aforementioned foreign exchange fees.

Finally, fees may be incurred if you need to trace, investigate, recover, or cancel a SWIFT transfer after it has been initiated. These fees will vary between banks.

Making an international transfer? Statrys is a licensed payment service provider that helps companies registered in Hong Kong, Singapore, and the BVI  manage international transfers with greater visibility and flexibility:

With a Statrys multi-currency business account, you can

• Send international SWIFT payments to over 100 countries
• Track international transfer status in real time 
• Access MT103 document for free
• Use local payout methods in selected currencies, where transfers are routed through domestic payment rails in the destination country — this can lower fees and, in some cases, avoid intermediary bank handling
• Hold 11 currencies in one account, so you can choose to convert when the rate is favourable for you

Together, these features give businesses clearer oversight, better cost control, and smoother cross-border payment operations.

If you own a growing business with clients and partners in Asia, check out our business account to see how Statrys can help streamline your international payment operations.