When businesses think about international payments, especially B2B cross-border transactions, the swift network is often the backbone supporting the transfer of funds. Understanding how the swift system works and what it entails is crucial for businesses, particularly those looking to streamline costs and optimise their financial processes.

In this blog, we will break down the swift network, its significance, associated costs like swift transfer costs, and how companies like Infinity can help you mitigate hidden forex fees and excessive swift charges.

What Is the SWIFT Network?

SWIFT, which stands for the Society for Worldwide Interbank Financial Telecommunication, is a global messaging network used by banks and financial institutions to send and receive information securely about transactions. It’s not a payment system itself but facilitates the communication between banks, ensuring that money is moved from one institution to another in a secure manner.

How Does It Work?

When a business initiates an international transaction, the swift network ensures that the bank sends a secure message to the receiving bank or financial institution in another country, detailing the transfer instructions. However, for the payment to be completed, intermediaries—also known as correspondent banks—are often involved.

The Role of SWIFT in B2B Cross-Border Payments

For companies engaging in B2B cross-border payments, swift is indispensable. It provides a standardised way for banks and financial institutions to communicate, making global payments efficient and secure. However, with convenience comes cost, and many businesses are caught off guard by fees that may not always be transparent.

Breakdown of SWIFT Transfer Costs

One of the main considerations for any business making international payments is the cost of using the Swift network. Let’s take a closer look at these charges:

Swift Transfer Cost:

Swift transactions typically incur charges from both the sending and receiving banks, as well as any intermediary banks involved. These costs can vary depending on the bank and the amount being transferred. The more banks involved, the higher the fee.

International Payment Transfer Service Fees:

Banks often charge a service fee for handling international transfers. This may cover the administrative costs, but often, these fees can be higher than expected, especially if several banks are involved.

SWIFT Charges:

In addition to the transfer costs, businesses may face swift network usage fees. These fees vary depending on the size and complexity of the transfer but are generally a small percentage of the amount being sent.

Hidden Forex Fees:

Beyond the obvious fees, many businesses don’t realise that hidden currency conversion charges (forex fees) can inflate the total cost of a swift transfer. Banks may offer less favourable exchange rates, which could end up costing businesses more in the long run.

How to Mitigate Hidden Costs

At Infinity, we specialise in helping businesses reduce these hidden fees and optimise their international transactions. We understand that excessive charges can significantly impact your bottom line, especially for frequent or high-volume transfers.

Here’s how Infinity can help:

Competitive Forex Rates:

We offer transparent and competitive exchange rates to minimise hidden forex fees.

Reduced Transfer Fees:

Our B2B cross-border payment platform ensures that you face minimal swift charges and service fees, helping you streamline international payments.

Faster, More Efficient Transfers:

We leverage modern technology to ensure that your payments reach their destination quickly and securely, reducing the reliance on multiple intermediary banks that add to the cost.

SWIFT vs. Other Payment Methods

While swift remains a dominant player in the world of international transactions, alternative payment methods are gaining popularity. Fintech companies, including Infinity, are offering more cost-effective and faster solutions for B2B cross-border payments.

For example, solutions like Infinity can bypass traditional banking processes, reduce fees, and offer better exchange rates, making it easier for businesses to move money globally without the hefty charges often associated with swift.

Conclusion

The swift network plays a crucial role in facilitating international transactions, but it's essential for businesses to be aware of the associated costs. From swift transfer costs to hidden forex fees, international payments can come with a range of charges that add up quickly.

With solutions like Infinity, you can minimise these fees, streamline your payment processes, and ensure that your business operates efficiently in the global market. By partnering with a fintech platform like ours, you can enjoy greater transparency, lower fees, and a smoother payment experience.

Looking for more information or help with your B2B cross-border payments? Reach out to Infinity today and learn how we can assist you with your international payment needs.