Most cross-border payments in the world are sent over SWIFT network. According to official statistics, on average 44.8 mln messages were processed by SWIFT in 2022. Here we have collected everything you need to know about international payments from basic terms to methodologies of SWIFT payments investigation.
Messages in SWIFT
Information between banks in the SWIFT network is exchanged through various message types. The most common one encountered by end-users is the MT103, which represents a single customer credit transfer. In simple terms, it serves as a confirmation of a funds transfer from one client to another.
Take a look at our examples of MT103 forms. It contains structured fields with information about sender, beneficiary, banks involved, amount, currency, value and some other. You can find here a full description of MT103 fields.
Each MT103 message can be identified by UETR code or/and Sender's Reference Number.
UETR - Unique End-to-End Transaction Reference, 36-character alphanumeric code that serves as a unique identifier for a specific payment transaction. Here is an example of UETR code: de2da6c9-18be-48d4-8053-867ed90a316a.
You will need the MT103 form and UETR code to track the status of your SWIFT payment or when the beneficiary contacts their bank to expedite compliance procedures.
Correspondent Banking
Most of cross-border payments go via correspondent and/or intermediary banks. They are required to build a trust and transfer funds between two banks which don't have direct relations.
A correspondent bank is a third-party financial institution that acts as a go-between for domestic and foreign banks that need to conduct cross-border payments with each other.
There could be more than one bank involved between sender's bank and beneficiary's. The basic rule of safe SWIFT transfers - the more banks in a chain, more potential problems could happen. You can check in advance which correspondent banks will your payment go through and sometimes even influence the route.
Ohmyfin has an access to a database of correspondent banks. You can find sender's or beneficiary's bank by a SWIFT/BIC code and request a list of their correspondent accounts.
Establishing new correspondent relations is very challenging for banks, so normally they value them and try to prevent de-risking catastrophe by establishing procedures for due diligence of each cross-border payment and overall KYC/KYB procedures.
Lost SWIFT Payments
SWIFT payments cannot be irrevocably lost, however they can take an unacceptable time for a funds transfer.
Step 1. Understand the current status of the payment.
Check the status of your payment in our payments tracker. At a minimum, you should get a Status Code, but in many cases, you can also see some of the banks through which the payment passed or even the full chain. The sender can also request this information from their bank.
Step 2. Request a status from a beneficiary's bank.
If your payment is in progress (ACSP), take the MT103 form and all supporting documents, and ask the beneficiary to contact their bank. Often payments get stuck at the beneficiary's bank, waiting for compliance procedures. Please note that only the beneficiary can take this action, as the sender, you cannot contact their bank on their behalf.
Step 3. Perform a payment investigation or a payment recall.
If your payment was sent three or more weeks ago and the funds have still not been credited, you likely need a payment investigation. This can only be performed by the sender's bank. The bank will send MT192/MT195 or MT199 message over the SWIFT network through the same chain of banks, inquiring about the status and the reason for the delay. Please note that banks often charge approximately $50 USD for payment investigation procedures.
You can also request to recall a payment. Before re-sending a SWIFT payment, check for a better route to avoid a long chain of correspondent banks.
Step 4. Check if your actions have any result.
When you track a SWIFT payment, you see a last update date. Basically it means a date when the last time something has changed, at least internally in a current bank. If nothing changes, your previous efforts were not enough and you need to escalate a situation. Find a right person in a customer service or in a branch who will be kind enough to talk with back-office colleagues responsible for international payments.
There is an only one exception when a payment could never be delivered to a beneficiary and return back - sanctions. If your payment has been blocked under sanctions, you need to get a license to unblock it. Normally, bank should provide with an info related to a jurisdiction. For USA it is OFAC, for UK it is OFSI, for European Union it depends on a country. To make it more complicated, if you've transferred US dollars from a bank under sanctions to, for example, Standard Chartered, you could require to receive both OFAC and OFSI licenses. More information about OFAC licenses.
Take a look at our examples of MT103 forms. It contains structured fields with information about sender, beneficiary, banks involved, amount, currency, value and some other. You can find here a full description of MT103 fields.
Each MT103 message can be identified by UETR code or/and Sender's Reference Number.
UETR - Unique End-to-End Transaction Reference, 36-character alphanumeric code that serves as a unique identifier for a specific payment transaction. Here is an example of UETR code: de2da6c9-18be-48d4-8053-867ed90a316a.
Suggested reading: Where to Find a SWIFT Reference Number and a Role of UETR Code.
You will need MT103 form and UETR code in order to track a status of your SWIFT payment or when beneficiary contacts his bank to speed-up compliance procedures.