SWIFT vs Local Transfers: Which One Should You Use?

When you're sending money across borders, the way you send it matters.
If you choose the wrong method, you could end up with slow transfers, high fees, or confusing currency conversions.

That’s where the SWIFT network and local transfer systems come in. They’re two of the most common ways to move money internationally, but they work very differently.

At Statrys, we help businesses send money internationally using both methods. In this article, I’ll explain the key differences between SWIFT and local transfers, when to use each, and what to watch out for.

Let’s take a look.

A SWIFT transfer is an international payment sent through the SWIFT network, a global messaging system used by banks and financial institutions to securely exchange payment instructions. It doesn’t move money itself, but enables banks to communicate across borders to complete a transfer. 

Also known as a wire transfer, a SWIFT transfer involves your bank sending payment instructions through a network of intermediary banks to reach the recipient’s account in another country. Each bank in the process is identified by a unique SWIFT code, which the sender must provide to ensure the funds are routed correctly. 

Here’s how a SWIFT transfer works.

To make a SWIFT transfer, you’ll need to provide specific details to ensure the funds reach the correct recipient:

• The recipient’s full name and bank account number
• The Recipient’s bank name and address
• SWIFT code (also known as BIC) of the recipient’s bank
• Currency and amount to be transferred
• Purpose of payment, if required by the sending or receiving country

The SWIFT/BIC code is an 8 to 11-character identifier that specifies the bank, country, city, and branch. You can usually find a bank’s SWIFT code on your bank statement, on the bank’s official website, or by searching for it on a reliable website that lists SWIFT codes.

SWIFT transfer costs vary by bank or payment provider, with the charges typically fall into two categories: transfer fees and exchange rate margins.

Transfer fees usually range from USD 5 to USD 20 or more per transaction. The exact amount depends on the bank, the transfer amount, and whether intermediary (correspondent) banks are involved. Additional charges may apply for priority processing or urgent transfers.

Exchange rates can also impact the total cost. Traditional banks often apply less favourable rates than mid-market rates, and fees may be proportionally higher for smaller transfers.

According to Statrys’ analysis of 2,000 outgoing SWIFT payments, the average processing time is around 18 hours.

However, the actual time can be shorter or longer depending on several factors, such as the destination country, time zone differences, the recipient bank’s internal processing, and the number of intermediary banks involved in the transfer.

A local transfer is a payment made within a country or currency zone using domestic payment systems. Instead of routing funds through the international SWIFT network, the payment is processed through local banking infrastructure, often resulting in lower fees, faster settlement times, and full-value delivery to the recipient.

Local transfers are typically supported by local clearing systems such as FPS in Hong Kong, SEPA across Europe, Faster Payments in the UK, or ACH in the United States. These systems are designed to move funds efficiently within their respective markets.

In some cases, payment service providers or banks can process transfers using local payment methods, even if your account is outside the destination country’s payment network.

Let’s look at how it works.

This process is sometimes referred to as "local routing" or "local payout" and is commonly used by fintech platforms and payment service providers to improve efficiency and reduce the hidden costs often found in international transfers.

To make a local transfer, you typically need:

• The recipient’s full name
• Their local bank account number
• The bank name and, in some cases, the branch code
• The currency and amount to be transferred

Some systems may also require a payment reference or purpose, depending on local regulations. Unlike SWIFT transfers, you won’t need a SWIFT/BIC code, and the transfer must be in the local currency supported by the network (e.g. HKD for FPS, EUR for SEPA).

Local transfers are often low-cost or free, especially when processed within the same country or currency zone. However, costs may vary slightly depending on the provider, but they are generally much lower than SWIFT transfers.

Local transfers are often processed within minutes to a few hours, especially when sent during business hours through real-time payment networks like FPS (Hong Kong) or Faster Payments (UK). However, some systems, such as ACH (US) or bank cut-off times, may result in processing times of 1 to 2 business days.

Delays can also occur due to weekends, public holidays, or if the recipient’s bank processes payments in batches rather than in real time. 

Now that you understand how each transfer method works, here’s a side-by-side comparison to highlight the main differences:

Choosing between SWIFT and local transfers might not be exactly straightforward. Each method serves different needs depending on where you're sending money, in what currency, and how quickly it needs to arrive. 

To decide which option is right for your payment, start by asking these key questions:

1. Are you sending domestically or abroad?
   If you're sending money within the same country or currency zone, a local transfer is usually the best choice. It's faster, more cost-effective, and avoids intermediary bank fees. For cross-border payments, particularly those involving different banking systems or currencies, a SWIFT transfer is often necessary.
2. What is the amount you're transferring?
   The amount of the transaction can impact which payment option to choose, as local transfers typically support lower limits compared to SWIFT payments.
3. Does your payment service provider or bank offer local transfers?
   Not all providers offer local transfer options. Some modern payment providers, like Statrys, use local payout networks even for international transactions. This approach can combine the benefits of local transfers with the global reach of SWIFT, so it’s worth checking what your provider supports.
4. Do you need to send a specific currency?
   Local transfers only support the domestic currency of the payment system. For example, FPS in Hong Kong only processes payments in HKD. If you're sending money in a foreign currency or to a country where your local network doesn’t operate, you’ll need to use a SWIFT transfer, which supports multi-currency payments across different banking systems.
5. Do you need proof of payment?
   If you require a formal record that the payment was sent, especially for audits, suppliers, or dispute resolution, SWIFT transfers offer an MT103 document. This serves as official proof of payment and includes full transaction details. Local transfers don’t always provide the same level of traceability, and documentation may vary by network.

Here are situations where each transfer method is most suitable.

Use SWIFT transfers for:

• Cross-border supplier payments
• Paying in foreign currencies (e.g. from a euro account to a RMB account in China)
• Transfers outside major currency zones
• Sending large amounts

Use local transfers for:

• Domestic payroll and bills (e.g. paying employees in the same country)
• Intra-currency zone payments (e.g. SEPA, FPS, ACH)
• If international payments are supported by local routing via a payment provider
• Sending remittances or smaller-value transfers

In short, there’s no one-size-fits-all answer when it comes to choosing between SWIFT and local transfers. SWIFT transfers are best when you need to send funds across borders in foreign currencies, especially to banks outside major currency zones. Local transfers are ideal for faster, lower-cost payments within the same country or currency zone, or when your provider offers local routing abroad.

If you’re looking for flexibility, the Statrys business account lets you hold and manage 11 currencies in one place, supports SWIFT transfers globally, and enables local payments in HKD and 12 other currencies, including EUR, GBP, SGD, THB, TRY, and KRW. This helps your business save on fees and streamline cross-border transactions.

View our pricing to see how we support global businesses with local efficiency.