International payment system swift: pros and cons. Payment system "Swift" (SWIFT): features and history of creation

When faced with the need to issue pay slips, checks or letters of credit, bank clients are faced with the need to find out the SWIFT code of the financial institution. This simple combination of letters and numbers allows you to identify a bank in the international financial system and makes it more convenient to move money not only within a single country, but also on a global scale. Let's take a closer look at what a SWIFT code is, what it is used for, and how you can find it out.

SWIFT code: what is it?

In 1973, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) began its work to streamline the payment system and disseminate financial information on a global scale. The basis of such a system was a secure network, which included many banks around the world, and each of them was assigned a specific identification code.

Now all banks included in the SWIFT system can freely exchange financial information and transfer funds among themselves. Currently, over 9,000 financial institutions from 209 countries have joined the international community. To participate in it, the bank is required to provide a special commission with a license to conduct transactions in foreign currency and pay an entrance fee.

After the bank is finally accepted into the system as a participant, it is given a personal code, which is unique in nature. SWIFT-code has the following distinctive features:

• Consists of 8 or 11 characters;
• The first 4 characters indicate the bank, and the rest indicate the country, region, city and division of the financial institution;
• The central offices of banks have a shorter SWIFT code and include only Latin letters, while numbers are added to the codes of its branches, indicating their serial numbers.

It should be noted that the SWIFT system is used for interbank interaction only at the global level: other systems operate within the state.

If we are talking about money transfers internationally, then this system can be considered as the most reliable and safe option. The client only needs to know the SWIFT code and the so-called IBAN of the recipient or his identification code. The transaction will be mediated by an international bank from the financial communications community.

As for each of the countries participating in the SWIFT system, their own national group representing the community is formed on their territories. It is designed to track the movement of financial resources and information on a regional scale. Thus, in Russia, SWIFT is provided by the Russian National Association or (ROSSWIFT). According to recent data, the Russian Federation ranks 20th in terms of traffic volumes through the SWIFT network.

How to find out the bank's SWIFT code?

The SWIFT code of a financial institution is not classified or classified information. It is widely available, and therefore anyone can not only find it out on the official website of any bank in the “Details” section, but also even decipher it. So, the standard code looks like this: NNNN MM XX yyy, which can be deciphered as follows:

• NNNN – bank name;
• MM – country code;
• XX – city code;
• yyy – branch number (this part is missing in the code of central offices of banks).

For example, Sberbank of Russia's SWIFT code looks like SABRRU**, where SABR is the international code designation of this financial institution, and RU is, respectively, the country of its registration.

If the client decides to transfer funds from one country to another, he will have to find out the SWIFT codes of both the sending and receiving banks, as well as the bank number of the person to whom the funds are transferred or IBAN.

The SWIFT system of international interbank communications allows you to make international payments, transfer payments, send messages about the sending and receipt of funds, as well as exchange important financial information. Very often, financial institutions use a swift code to carry out their own transactions, and not just for client money transfers.

It is worth noting that the registration of banks in the SWIFT system is voluntary. This means that financial institutions that often carry out international financial transactions are joining the global community to speed up the processes of sending and receiving information and funds, as well as to improve the security of these types of transactions.

Thus, the SWIFT code can be understood as the identifier or login of a financial institution in the global community of interbank communications. This simple combination of letters and numbers allows the bank to seamlessly conduct financial transactions at a global level.

Rumors that Russia could be disconnected from the international interbank system for transmitting information and making payments SWIFT appeared last year, when sanctions were imposed on the country every three days. The banking community and officials did not hide their skepticism: in Russia, 600 leading banks use SWIFT, a European company earns hundreds of millions of dollars on this, and there are no recognized alternatives on the market.

Last week it became known that EU foreign ministers have returned to their previous plans and will consider the possibility of disconnecting Russia from SWIFT on Thursday, January 29. The Village is trying to figure out whether financial obstruction is dangerous and what it threatens.

What is SWIFT?

SWIFT is a single international standard, a system in which banks around the world exchange information and payment data. It is used by thousands of financial institutions around the world, about 10,000 banks exchange messages using it. The system ensures the transmission of about 1.8 billion messages per year. Every day, payment orders with a total estimated value of more than six trillion dollars pass through the SWIFT network.

SWIFT is headquartered in Brussels and is owned by a cooperative and is subject to Belgian law.

How does the system work?

If a bank needs to send a payment or confirmation of a transaction to another bank, it prepares such a message, encrypts it using an encryption system created by SWIFT, and sends it through a special terminal to its counterparty. The counterparty, upon receiving the document, decrypts the message and uses it for its intended purpose. They also transmit statements of correspondent accounts and carry out investigations into unclear payments.

How much do banks pay to use the system?

The cost is formed from two components - annual maintenance and commission for each payment. Annual maintenance depends on the bank's Swift payment traffic and can reach 100,000 euros per year. The cost of each payment also depends on the number of messages per month. The more messages, the cheaper each payment is. The message price is set in euros, so it can fluctuate from the ruble to euro exchange rate.

Why has SWIFT become so popular?

The main advantage of SWIFT is the security of information transferred between banks.

Good news: individuals will not be affected; card payments are not processed through SWIFT. Problems may arise for organizations that use SWIFT to transmit information about cross-border payments through banks - these payments will be delayed and lost. The President of the Association of Regional Banks “Russia”, Deputy Chairman of the Duma Committee on the Financial Market Anatoly Aksakov, in an interview with Business FM, is encouraging: “I would not talk about collapse. There will be no collapse, but difficulties will obviously arise.” There are no complete analogues for international payments. Within Russia, the analogues are the payment system of the Bank of Russia and the settlement systems of the largest banks.

In fact, there are alternatives to SWIFT. In 2012, all Iranian banks were disconnected from the system. The country quickly switched to the SUCRE payment system, which is used in Cuba, Ecuador, Bolivia, Venezuela and Nicaragua.

We would like to thank the press service of VTB24 Bank and Irina Popova, Vice President, Deputy Director of the Operations Department of VTB24, for their assistance in preparing the material.

What is a bank’s SWIFT code (in Russian, SWIFT code), how is it formed and where is it used?
SWIFT code is a unique identification code of a bank or any other participant in financial transactions, which is assigned to a participant upon joining the Community of Worldwide Interbank Financial Telecommunications (SWIFT) and is used for international transfers of funds between banks.

SWIFT code

A unique SWIFT code (SWIFT code) of a system participant is formed after the SWIFT Board of Directors makes a decision on admitting the bank to the company, based on consideration of the documents submitted by the bank for joining the system.

Bank identification codes are formed according to the ISO 9362 standard (ISO 9362 - BIC), including the country code determined according to the ISO 3166 standard. According to this standard, SWIFT code is a digital combination of 8 or 11 characters (letters, sometimes combined with numbers):

BBBB CC LL DDD

And the meaning of each group from the code means the following:

• BBBB is a unique letter code of a bank or financial institution. It always consists of four characters and identifies the participant in the calculations. It comes from the bank's abbreviated corporate name in English. So, for example, if you look at the abbreviated corporate name of some Russian banks, this connection is visible:
  


• CC is a two-character alphabetic country code from the ISO 3166 standard, also in English. So, for example, the letter code of Russia is RU, Germany is DE, Kazakhstan is KZ, the USA is US, etc.;
  

  The country code is needed in order to determine which country's bank made a specific money transfer. And also, so as not to get confused. Thus, under the brand name “Alpha” there are several banks in the world, which is reflected in SWIFT codes, so belonging to a particular country can be determined by the country code:

  Letter codes of countries consisting of two characters can be viewed.



• LL- alphanumeric code of the bank’s location in the country, consisting of two characters. The standard code does not use the numbers 0 and 1. The presence of one in the field indicates an inactive code, and zero is a special case intended for testing (training) work in the SWIFT network.
  


• DDD- bank branch code (this is an optional component). If the head office of the bank is registered in the SWIFT system, then this code is not set for it, and if it is necessary to fill in the 11 characters of the SWIFT code in the details, the values ​​XXX are entered.

  Thus, to ensure the possibility of making cross-border payments to credit institutions using the settlement network of the Bank of Russia, the values ​​XXX are entered in the SWIFT code of the head bank, and when registering a branch, the code of the bank branch is entered.
  

So, for example, when transferring funds from abroad to an Alfa-Bank client (recipient - an individual), you will need to inform the sender of the SWIFT code - ALFARUMM. And in order for the client to transfer funds from abroad to Sberbank of Russia (for example, to the Povolzhsky Bank of Sberbank of Russia OJSC), the sender will need to provide the following SWIFT code - SABRRUMMSE1.

How to find out your bank's swift code?

You can also find out the bank's SWIFT code:

• To the bank's website in the section - Bank details


• On the website of the Russian National SWIFT Association (ROSSWIFT) in the section “SWIFT codes of all Russian banks”


• On the Bank of Russia website in the Directory of correspondence between bank identification codes of credit institutions (branches) making payments through the Bank of Russia settlement network and international bank identification codes SWIFT BIC

Many Ukrainians have heard that it is possible to receive money from abroad to their bank account using swift payment, this became especially important at one time for webmasters and YouTube bloggers who received $ income from Google for advertising on their sites, and As you know, the most common options for receiving money from this company are a bank check and swift payment. Usually the first payments are $100 and the commission for cashing bank checks in Ukraine is very high, which is why swift payments have gained such popularity in our country. We will understand what SWIFT payments are in this article.

International SWIFT payments is a convenient way to make a money transfer abroad from your account to the account of an individual or legal entity. SWIFT payments are ideal for paying for purchases made abroad, booking hotel rooms, paying for education, holidays or treatment, as well as for money transfers to relatives and friends.

History of the international money transfer system SWIFT

SWIFT is an acronym that stands for Society for Worldwide Interbank Financial Telecommunications. In translation - the Community of Worldwide Interbank Financial Telecommunications or simply the system of international interbank payments.

This community was founded in 1973 with the participation of 239 banks from 15 countries. As of 2010, this community already included more than 9,000 banks from 209 countries. SWIFT was founded in Belgium and complied with the laws of this country. The community's head office is currently also located in Brussels. Each bank in this community is assigned a unique code called SWIFT-BIC or SWIFT-ID, and each legal entity or individual that participates in payments is assigned a unique code called IBAN. Essentially, IBAN is something like a bank account number. To transfer money in this payment system, you only need to know 2 details: the SWIFT code of the recipient’s bank and the IBAN of the recipient.

Since its founding, SWIFT has become the most popular international payment system and is not going to lose its position. Several million payments are made in the SWIFT community every day, and more than 2.5 billion transactions pass through this system every year.

Advantages and disadvantages of SWIFT

Pros:

• high speed of translation delivery. The average delivery time anywhere in the world is 20 minutes. for regular or 1.5 min. for urgent message;
• no restrictions on the amount of payment;
• high reliability in the safety of confidential information, which is ensured by a wide range of organizational and technical measures;
• a wide selection of currencies that the system operates;
• tariffs are lower than in other systems;
• wide distribution and popularity in the world, which allows you to make payments to almost any country;
• guarantees of timely delivery of the translation. In the event of a delay in delivery due to the fault of the system, SWIFT covers any losses incurred by customers.

Minuses:

• the need to provide the bank with a rather impressive package of documents;
• since 2011, the US State Department has taken control of this system and monitors payments;
• not every bank, much less a small or medium one, is able to become a member of the SWIFT system due to the rather impressive entrance fee.

What are SWIFT payments for?

Payments in the SWIFT system are a very fast, reliable and convenient way to pay for goods and services abroad. Using this system, you can quickly and easily pay for purchases, pay for studies, order and pay for a hotel room, pay for treatment or vacation. In addition, this is a simple way to routinely transfer money to relatives or friends. Both an ordinary person and any organization can transfer money in this system. The recipient can also be anyone.

How SWIFT works in Ukraine

One of the most active operators of the SWIFT system in Ukraine is PrivatBank. This bank has many correspondent accounts in foreign banks, which helps make transfers abroad in the shortest possible time and without unnecessary bureaucratic delays.

In the realities of Ukraine, there are some legal restrictions for money transfers abroad. Such restrictions, in principle, exist in any state and they do not significantly affect the ease of use of SWIFT payments.

Any citizen of Ukraine or individual can carry out transfer in the SWIFT system abroad foreign currency only for non-commercial purposes. This transfer must not be related to investment or business activities. Also, the transfer amount without providing supporting documents in foreign currency on one business day cannot exceed the equivalent of 500$ . There are no restrictions on the amount per month or per year. In addition, to process a money transfer, there is a mandatory list of documents that must be submitted to the bank, as well as a list of details that must be indicated in the payment document. For citizens of Ukraine (residents), the conditions for making a payment differ from the conditions and required package of documents that persons who are not citizens of Ukraine (non-residents) need to have.

Tariffs for sending a SWIFT payment from Privatbank

If the client only has a dollar account, transfers in any currency in Privatbank can be made using the “Autoconversion” service.

Currently, PrivatBank provides the opportunity to use SWIFT payments in its Internet banking system - Privat24. This makes it possible to access all the benefits of the international SWIFT system without leaving your home.

For legal entities, the rules for SWIFT transfers differ from similar rules for individuals. There are also some specific points here.

Guaranteed delivery time money transfer in the SWIFT system in Privatbank from 1 to 3 days.

For more information on how to receive or send SWIFT transfers, you can read receive - and send -.

SWIFT is a leading international system in the field of financial telecommunications, providing prompt, secure and absolutely reliable transmission of financial messages around the world.

Every day, more than 8 million payments totaling more than 6 trillion are transferred through the SWIFT network. US dollars.

SWIFT was founded in 1973. Every day, SWIFT handles transfers of trillions of dollars between 8,000 thousand financial institutions in 200 countries. More than a million transactions pass through SWIFT every day.

6,000 banks are SWIFT participants, the system includes more than 180,000 service points. This allows you to send funds to any bank in any country in the world.

• you want to send money to your loved ones, friends and acquaintances;
• you need to pay for goods or services;
• you want to transfer a large amount, spending a minimum of funds;
• you do not need to open a bank account.

In order to send a SWIFT transfer, it is not necessary to open a bank account; transfers can be sent both from an account and without opening an account.

The speed of transfer delivery is on average 1-3 days, and the presence of direct correspondent accounts in leading banks in the world allows you to reduce the transfer time to several hours.

Tariffs for SWIFT transfers are much more affordable than those of other transfer systems. A wide network of correspondent bank accounts allows you to introduce flexible tariffs and minimize the cost of transfers. Banks have quite a lot of partner banks in the CIS countries and abroad, which gives you the opportunity to send transfers to these banks at the lowest rate, for example, from 10 US dollars.

1. fill out the application form for transfer of funds. The application must indicate Full name and passport details of the sender, details of the recipient's bank, name and account number of the recipient;
2. hand over the completed form and identification document to the operator;
3. receive a receipt order from the operator and pay it through the cash register;
4. After sending the transfer, you are left with a receipt of the cash receipt order. If necessary, you will be provided with copies of the payment order and transfer application.

The international interbank payment system is about to open a second operations center for bank transfers between European countries. Now SWIFT already has one center in Europe, which is located in Belgium.

The EU authorities in 2006 harshly criticized SWIFT for allowing a US-based company to illegally share bank transfer data with US authorities as part of a counter-terrorism campaign. Later SWIFT admitted that it provided a limited amount of information to US authorities.