SWIFT Payments Explained: Fees, Intermediaries and Delays

A SWIFT payment is not a direct transfer of money through SWIFT. SWIFT is the secure messaging network banks use to exchange payment instructions. The funds settle separately through accounts held by the sending, receiving and correspondent banks. That distinction explains why the amount received can differ from the amount sent, why delivery times vary and why tracing sometimes requires several institutions.

How a SWIFT payment works

The payer provides its bank with the beneficiary’s legal name, account number or IBAN, bank identifier code, payment amount, currency, payment purpose and any required intermediary-bank details. The sending bank validates the instruction, debits or reserves funds in the payer’s account and sends the appropriate SWIFT message.

If the sending and receiving banks have a direct relationship in the payment currency, settlement may involve only those institutions. Otherwise, the payment moves through a correspondent banking chain. A correspondent bank provides another bank with access to a currency or market by maintaining an account on its behalf.

A typical indirect route may involve these steps:

1. The sender’s bank accepts the instruction and debits the sender.
2. A correspondent bank processes the payment in the settlement currency.
3. Another intermediary routes the funds to the beneficiary’s bank, if necessary.
4. The beneficiary’s bank completes its checks and credits the recipient.

Each institution has its own operating hours, cut-off times, screening controls and fee schedule. A route with more institutions therefore creates more points at which a payment can be deducted, delayed, repaired or returned. SWIFT does not impose a universal payment maximum; transaction limits are determined by the banks, account terms, corridor and compliance requirements involved.

What are an MT103 and UETR?

An MT103 is a standard SWIFT message for a single customer credit transfer. Finance teams commonly request it when the payer has been debited but the beneficiary has not received the funds.

An MT103 typically contains:

• The transaction reference, currency, amount and value date.
• The ordering customer and beneficiary details.
• The sending, intermediary and beneficiary banks.
• Remittance information, such as an invoice number.
• The OUR, SHA or BEN charge instruction.

The Unique End-to-end Transaction Reference, or UETR, is a reference used to identify and track a payment across participating institutions. When investigating a delay, provide both the MT103 and UETR to the sending bank and ask it to initiate a trace.

An MT103 shows that a payment instruction was issued. It does not prove that the beneficiary’s account was credited.

A payment supported by an MT103 may still be under compliance review, waiting for manual repair, held at an intermediary, rejected by the receiving bank or in the process of being returned.

Where SWIFT payment costs come from

The bank fee displayed at submission is only one part of the cost. Treasury teams should calculate the total delivered cost: every explicit fee, any deduction from principal and the difference between the market reference rate and the customer FX rate.

A lifting fee is deducted from the payment principal rather than invoiced separately. Consequently, a supplier can receive less than the invoice amount even when the payer has already paid its own transfer fee.

OUR, SHA and BEN charge instructions

The charge instruction indicates how bank fees should be allocated. It should be selected according to the contract and invoice terms, not treated as a routine payment-field choice.

OUR reduces the risk of a short payment but should not be interpreted as an absolute delivery guarantee. Bank implementation and corridor practices can differ. If an exact invoice amount is contractually required, confirm the fee treatment with the sending bank before release and reconcile the beneficiary’s net receipt afterward.

Worked example: deductions and FX spread

Consider an illustrative payment of $100,000 to a European supplier under SHA terms. These figures demonstrate the mechanism and are not a quote or Stablerail pricing:

• Sending bank fee: $35, billed separately.
• Intermediary lifting fee: $20.
• Beneficiary bank fee: $10.
• Illustrative reference rate: $1 equals €0.92.
• Illustrative FX margin: 0.60% against the reference rate.

After $30 of deductions from principal, $99,970 remains for conversion. At the reference rate, that equals €91,972.40. Applying a 0.60% FX margin produces approximately €91,420.57 for the beneficiary. By comparison, $100,000 converted at the reference rate without deductions would produce €92,000.

The beneficiary’s illustrative shortfall is therefore €579.43, while the sender also pays the separate $35 fee. The actual result will depend on the route, participating banks, fee allocation and exchange rate applied when the payment is processed.

Why SWIFT transfers can be delayed

There is no single delivery time for every SWIFT payment. A straightforward payment between major currencies may arrive on the same day or within one or two business days. A payment involving several correspondents, manual checks or local holidays can take three to five business days or longer. Those ranges are expectations, not guarantees.

Common causes of delay include:

• The instruction missing the sending bank’s daily cut-off.
• Weekends, public holidays or time-zone differences along the route.
• A mismatch in the beneficiary’s name, address or account details.
• Sanctions, anti-money-laundering or fraud screening.
• An unclear payment purpose or missing invoice information.
• An invalid IBAN, account number, SWIFT/BIC or intermediary instruction.
• Insufficient liquidity or settlement capacity in the required currency.
• The beneficiary bank requiring additional information before crediting funds.

During a delay, the sender may have been debited even though the beneficiary has not been credited. The payment could be awaiting processing at any institution in the chain, so the sending bank should identify the last confirmed status rather than simply confirm that the message was sent.

How to trace a missing SWIFT payment

1. Confirm that the expected delivery date and all relevant banking days have passed.
2. Obtain the MT103 and UETR from the sending bank.
3. Check the beneficiary name, account, currency and bank identifiers against the invoice.
4. Ask the beneficiary to confirm whether its bank has placed the payment under review.
5. Request a formal trace from the sending bank and record the case reference.
6. Keep the invoice, contract and evidence supporting the payment purpose ready.

A recall is not the same as a trace. A trace asks where the payment is; a recall asks institutions to return it. Once funds have been credited, recovery may depend on the beneficiary’s consent and the receiving bank’s process.

When stablecoin rails may be the better corridor

Stablecoins can be suitable when both parties can use the same token and blockchain, the recipient has a reliable route to usable fiat, or payment must move outside banking hours. A USDC or USDT transfer settles on its supported blockchain rather than through a correspondent banking chain, but blockchain settlement is only one stage of the complete payment.

The correct comparison is the amount of usable fiat delivered by the required time, not the SWIFT initiation fee versus the blockchain network fee. Finance teams must also assess wallet controls, address screening, approval segregation and the evidence needed for reconciliation.

Stablerail provides one business account for USDC and USDT treasury, with approvals and signing quorum, sanctions and address screening before send, global payouts, fiat off-ramp, corporate cards and exportable audit evidence. Whether SWIFT or a stablecoin route is preferable still depends on the corridor, recipient requirements and complete delivered cost.

Pre-payment checklist for finance teams

• Match the beneficiary’s legal name to the destination account.
• Validate the IBAN or account number, SWIFT/BIC, currency and bank country.
• Confirm whether an intermediary bank is required.
• Select OUR, SHA or BEN according to the invoice terms.
• Compare the quoted FX rate with a current reference rate.
• Add the invoice number and a specific payment purpose.
• Record the expected delivery date, approvers and payment reference.
• Retain the MT103 and UETR after release.
• Compare the net delivered amount and availability time with any viable stablecoin route.

The best payment rail is the one that delivers the required amount, in the required form, by the required time, with acceptable controls and evidence. For SWIFT payments, that means looking beyond the visible fee to the full correspondent route, FX treatment, charge instruction and investigation process.