Eternity Law International — News — How does SWIFT network work?

How does SWIFT network work?

Published:
April 29, 2021

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), legally S.W.I.F.T. SCRL  gives the ability to financial institutions worldwide to send and receive messages about the financial transactions in accordance with required safety measures, using standardized form and software. SWIFT connects all members of their network using Business Identifier Codes, which is unique for each financial institution who is a member of the network. Business Identifier Codes are also known as BIC codes or SWIFT codes. To be able to send the information to another member, financial institutions shall have corresponding accounts with each other.

Each member pays joining fees and annual support fees. SWIFT also sets fees for each sent message. The fees are different depending on the types of messages and volumes.

Financial institutions cannot actually send money to each other, but they can send payment orders to each other. The payment order is a financial instrument according to which one bank or financial institution has to transfer funds to another party.

Main advantages of SWIFT network:

  • SWIFT takes financial responsibility for delivery of message;
  • Safety of information while sending using SWIFT network
  • Global monetary informing and reference information guidelines. The utilization of normalized messages guarantees that information traded between foundations is unambiguous and machine amicable, working with computerization, decreasing expenses and relieving hazards.

There are different ways to connect to the SWIFT network, such as:

  1. Direct connectivity
  2. Indirect connectivity

Direct connectivity

Direct connectivity through SWIFT is performed when the financial institution applies to SWIFT and gets its own BIC code.  Direct connectivity gives the ability to be connected with a secured net of SWIFT members and exchange information and payment orders with other members. For this type of connection, there are required to employ certain software developed by SWIFT.

Main features:

  • Working with a solitary party – SWIFT
  • The database is aimed at the customers’ needs
  • The protection of dataflow
  • Reduces the cost of messages compared to using of indirect connectivity

Indirect connectivity

Indirect connectivity is performed when the financial institution uses BIC code of the other financial institution which is SWIFT member. Indirect connectivity is also named by SWIFT as bureau service. A bureau service provides affiliates with a cost-effective solution to send SWIFT messages without the need to employ required software internally. A bureau mostly provided by the special organizations authorized by SWIFT. This type of connectivity is also called shared connectivity.

The financial institution can also approach SWIFT member to use their BIC code. It can be performed either with the personal interface of software that financial institution has and to execute message it uses BIC code of SWIFT member, or the financial institution approaches SWIFT member with particular payment order and SWIFT member executes it with their own interface of the software. In this case, financial institution enters into agency agreement with the SWIFT member.

Our legal company can help you to connect to SWIFT network. Contact us to find out more details.

You could be interested

Registration of a cryptocompany in El Salvador

Opening a cryptocompany in El Salvador is highly beneficial due to the recognition of Bitcoin as legal tender, tax exemptions on capital gains from virtual currency transactions as well as low cost of living and doing business. Although registering a crypto entity can seem daunting, especially if you’re unfamiliar with the jurisdiction’s requirements, our lawyers...

Company registration in Brunei

Brunei (Brunei Darussalam) is a small state (sultanate) in Southeast Asia with great potential for opening and running a business. It is one of the richest countries in the world. In the sultanate, the main economic spheres are the oil and timber industries, as well as agriculture. But telecommunications and e-commerce are considered the most...

SEMI license in Latvia

Latvia is in a leading position as one of the leading countries in attracting fintech companies. Unlike other lawfull ment, the Central Bank demonstrates its loyalty by regularly issuing licenses and offering various initiatives aimed at developing the FinTech sector. Following the UK’s exit from the EU, Latvia has become one of the best jurisdictions...

How to Get a FOREX License?

If you intend starting commercial journey by becoming the head of a forex brokerage structure, then one of first aspects that you need paying attention to is obtaining a forex license. Presence of such a document will have a beneficial effect on financial betterment of your company, as well as a positive effect on the...

The Role of MLRO

The MLRO – is a professional who manages the AML and regulative compliance-associated duties applying a risk-grounded approach. Let’s figure out what is the role of MLRO and why it is highly essential to appoint such professionals in businesses dealing with finances. Role of MLRO in the financial business The MLRO is in charge of...

SEMI license in Spain

Spain stands out as one of the most dynamic fintech ecosystems in Europe, with extensive experience in registering payment institutions and e-money institutions. The country provides tax breaks and other privileges, which makes it attractive to entrepreneurs compared to other jurisdictions. The Spanish market is developing rapidly in the payments sector, opening up significant opportunities....

Discover our services

The international company Eternity Law International provides professional services in the field of international consulting, auditing services, legal and tax services.

Ready-made companies for sale

Companies with a bank account around the world

Banks for sale

Established Banks for sale

Ready-made licenses for sale

Forex, cryptocurrencies, gambling, EMI, PSP, SVF, MSO, DLT

Licensing

Forex licenses, cryptocurrencies, gambling, EMI, PSP, SVF, MSO, DLT

Offshore company registration

Expert advice on the acquisition of an offshore company

Open a bank account

Open bank accounts in more than 120 banks around the world
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof
+41 435 50 73 23

Kyiv

Baseina street, 7
+38 094 712 03 54

London

Grosvenor Gardens, 52
+44 203 868 34 37

Washington

1629 K St. Suite 300 N.W.
+1 (888) 647 05 40 Toll Free

Vilnius

Gediminas Avenue, 44A
+370 52 11 14 32

Tallinn

Kesklinna linnaosa, Tuukri 19
+372 880 41 85

Edinburgh

Lochrin Square, 1
+44 203 868 34 37

Nicosia

Jacovides Tower, 5 floor
+371 665 550 51

Riga

Esplanade, 7 floor
+371 665 550 51

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai
800938622 Toll Free

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard
+6531594300

Sydney

20 Martin Place
+61 2 888 00 365

Porto

2609 Avenida da Boavista
+351 800 500 206 Toll Free

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7
+995706070360