Global business depends on the smooth movement of money between countries. For many years, SWIFT transfers have served as the main channel for processing international bank transfers, offering a standardized and secure way for financial institutions to communicate. While this system has long been trusted for handling international payments, the rise of new technologies is prompting a reevaluation of how money moves across borders.
As business demands grow and more efficient options become available, it’s worth examining how SWIFT operates, where it succeeds, and why some companies are exploring faster, more cost-effective alternatives for cross-border transactions.
How the SWIFT system operates
SWIFT, which stands for the Society for Worldwide Interbank Financial Telecommunication, is not a payment processor in the traditional sense. It doesn’t move funds directly. Instead, it enables banks to send secure messages that initiate international payments.
When someone initiates an international bank transfer, a SWIFT message instructs the recipient’s bank to credit the funds. Typically, the money doesn’t travel straight from one bank to another. It is routed through a series of intermediary institutions, each of which may add fees and cause delays.
For example, a business in Germany might send a payment to a supplier in Kenya. The transfer could be routed through banks in New York and Dubai before it arrives at its final destination. This multi-step process helps explain why SWIFT transfers are reliable but often slow and costly.
Benefits of using SWIFT transfers
Despite growing criticism, SWIFT still offers key advantages. One of its biggest strengths is payment security. The system has built a reputation for securely transmitting financial data, using encrypted messages that meet global standards.
Its reach is also unmatched. With thousands of institutions in over 200 countries connected, SWIFT provides near-universal access. Almost every major bank is part of the network, making it a viable method for sending international payments to almost any corner of the world.
SWIFT is also widely accepted for large or sensitive transactions, such as settling high-value invoices, funding payroll across borders, or making government-related transfers.
Why SWIFT and traditional bank transfers fall short
Even with these benefits, SWIFT is no longer the go-to solution for every type of international payment. Many users report issues related to transaction speed, lack of cost transparency, and limited tracking options.
Transfers can take multiple business days to complete, particularly when several intermediaries are involved. Each of these steps may involve extra charges, and often neither the sender nor the recipient knows the full cost until after the transfer is complete.
Another concern is the absence of visibility during the process. It can be difficult to determine where the money is at any given moment. For companies managing supply chains or time-sensitive payments, this uncertainty can lead to operational problems.
In addition, traditional international bank transfers frequently come with unfavorable exchange rates. Banks might include a markup well above the real market value, leading to hidden costs that affect profitability over time.
How fintech is changing cross-border transactions
In response to the inefficiencies of SWIFT, a new wave of fintech solutions has emerged to support faster and more transparent cross-border transactions. These providers often operate outside the legacy banking framework, enabling businesses to send international payments with greater speed and lower costs.
What sets these platforms apart is their ability to complete transfers in real time or on the same day. They also typically offer competitive exchange rates with clear pricing structures, so there are fewer surprises.
Most fintech platforms come with online dashboards that allow users to track payments from start to finish. Setup is often simpler too, with digital onboarding and automation features designed for high-volume or recurring transactions.
Unlike SWIFT, which relies on intermediary banks, many fintech companies have built their own payment networks or partner with regional institutions to move money directly. This reduces friction and increases efficiency.
Maintaining payment security in modern systems
As businesses move away from traditional bank systems, one common question is whether modern platforms can ensure the same level of payment security. Fortunately, the leading providers in the fintech space place a strong emphasis on protection.
These companies typically implement advanced security protocols such as two-factor authentication, fraud detection, and data encryption. Most are also subject to regulation by financial authorities and must follow strict compliance measures like KYC and AML requirements.
In many cases, their security standards meet or exceed those found in traditional banking, offering users peace of mind even when dealing with sensitive international payments.
When SWIFT remains the right choice
Despite the rise of modern alternatives, SWIFT is still the preferred option in certain situations. It remains important for high-value or regulated transactions, especially those requiring strict documentation or oversight.
Some jurisdictions and institutions still mandate the use of SWIFT for legal or contractual reasons. Additionally, in regions where newer financial technology has not yet been widely adopted, SWIFT may be the only practical method for sending money securely.
Rather than eliminating SWIFT completely, many businesses choose to use it selectively—reserving it for complex transfers while relying on faster systems for routine payments.
Making smarter choices for international bank transfers
Businesses that want to improve how they handle international payments should start by analyzing their current workflows. Understanding the costs and delays involved in traditional systems can help highlight the benefits of adopting newer tools.
A flexible approach is often best. SWIFT may still have a place in your strategy, especially for specific payment types. However, for most day-to-day cross-border transactions, digital-first platforms offer a faster, cheaper, and more transparent alternative.
Before making changes, companies should evaluate factors such as payment frequency, destination countries, currency requirements, and the sensitivity of the transactions. Integration with internal systems and the ability to track payments in real time may also be important.