Most cross-border payments worldwide are processed through the SWIFT network. According to official statistics, an average of 44.8 million messages were processed by SWIFT in 2022. Here, we’ve compiled everything you need to know about SWIFT, from basic terms to SWIFT payment investigation methods.
Messages in SWIFT
Information between banks in the SWIFT network is exchanged via different types of messages. The most common one encountered by end-users is the MT103, which is a single customer transfer. Simply put, it serves as a confirmation of a money transfer from one customer to another.
Take a look at our examples of MT103 forms. It contains structured fields with information about senders, recipients, participating banks, amount, currency, value and much more. A full description of the MT103 fields can be found here.
Each MT103 message can be identified by the UETR code or sender reference number.
UETR – Unique End-to-End Transaction Reference, 36-digit alphanumeric code that serves as a unique identifier for a specific payment transaction. Here’s an example of a 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.
Correspondents
Most cross-border payments go through correspondent and/or intermediary banks. They are required to build trust and transfer funds between two banks that do not have direct relations with each other.
A correspondent bank is a third-party financial institution that acts as an intermediary between domestic and foreign banks that need to make cross-border payments with each other.
There could be more than one bank involved between the sender’s bank and the beneficiary. The basic rule for secure SWIFT transfers – the more banks in the chain, the more potential problems could arise. You can check in advance which correspondent banks your payment will go through and sometimes even influence the route.
TrackMySwift has access to a database of correspondent banks. You can find the sender’s or beneficiary’s bank through a SWIFT/BIC code and request a list of their correspondent accounts.
Establishing new correspondence relationships is very challenging for banks, so they usually value them and try to prevent disaster through de-risking by establishing due diligence procedures for each cross-border payment and the general KYC/KYB procedures.
Lost SWIFT payments
SWIFT payments cannot be irreversibly lost, but they can take an unacceptable amount of time to transfer money.
Step 1. Understand the current status of the payment.
Check the status of your payment in the GPI Basic Tracker. As a minimum, you get GPI status codes, but often you can also see some of the banks a payment went through or even a full chain. The sender can also request this information from his/her bank.
Step 2: Request a status from the beneficiary’s bank.
If your payment is in process (ACSP), take the MT103 form, all supporting documents and ask the beneficiary to contact his/her bank. Most of the time, payments are stuck in the beneficiaries’ banks, awaiting compliance procedures. Please note that only the beneficiary can do this, you cannot contact his/her bank as the sender.
Step 3. Conduct a payment investigation or recall.
If your payment was sent 3 or more weeks ago and the funds still haven’t been credited, you probably need a payment investigation. This can only be done by the sender’s bank. The bank sends fin messages over the SWIFT network through the same chain of banks, asking about the status and reason for the delay. Please note that banks often charge ~$50 for a payment investigation.
You can also ask to recall a payment. Check a better route to avoid a long chain of correspondent banks before resending a SWIFT payment.
Step 4. Check if your actions have shown results.
If you’re tracking a SWIFT payment, you’ll see a last update date. Basically, it means the date on which something last changed, at least internally in a current bank. If nothing changes, your previous efforts have not been enough and you will have to escalate the situation. Find the right customer service or branch person who is willing to talk to the back-office colleagues responsible for international payments.
There is only one exception when a payment can never be delivered and returned to a beneficiary – sanctions. If your payment has been blocked under sanctions, you will need to obtain a license to unlock it. Usually, the bank should provide information about a jurisdiction. For the US it is OFAC, for the UK it is OFSI, for the European Union it depends on the country. To complicate matters further, if you’ve transferred U.S. dollars from a bank under sanctions to, say, Standard Chartered, you might need both OFAC and OFSI licenses.
Take a look at our examples of MT103 forms. It contains structured fields with information about senders, recipients, participating banks, amount, currency, value and much more. A full description of the MT103 fields can be found here.
Each MT103 message can be identified by UETR code or/and sender reference number.
UETR – Unique End-to-End Transaction Reference, 36-digit alphanumeric code that serves as a unique identifier for a specific payment transaction. Here’s an example of a UETR code: de2da6c9-18be-48d4-8053-867ed90a316a.
Recommended reading: Where to find a SWIFT reference number and the role of the UETR code.
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.
