SWIFT payments explained: fees, intermediary banks 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 through accounts held by the banks, often using one or more correspondent institutions. This distinction explains why a sender may see a payment marked complete while the beneficiary is still waiting, and why the amount received can be lower than the amount instructed.

How a SWIFT payment works

Suppose a company sends US dollars from its European bank to a supplier’s bank in Asia. If the two banks do not maintain a direct settlement relationship, other banks must connect the route. The usual participants are:

• Ordering customer: the company making the payment.
• Sending bank: the company’s bank, which validates the request and sends the payment instruction.
• Correspondent or intermediary bank: an institution that holds settlement accounts for another bank or connects the currency route.
• Beneficiary bank: the institution expected to credit the recipient.
• Beneficiary: the supplier, employee or other recipient receiving the funds.

Banks settle through correspondent accounts commonly described as nostro and vostro accounts. A bank’s nostro account is its money held with another bank; the same account is a vostro account from the other bank’s perspective. Ledger entries across these accounts move the value while SWIFT messages provide the instructions.

The route depends on the currency, destination, bank relationships and payment data. In a serial payment, the instruction and settlement move along a chain of banks. In a cover payment, the customer payment message and the interbank settlement route can take different paths. Either structure can complicate an investigation because the institution holding or reviewing the funds may not be visible to the beneficiary.

What an MT103 does and does not prove

An MT103 is the traditional SWIFT message for an individual customer credit transfer. Banks and treasury teams commonly request it when confirming or tracing an international payment. It may contain the payment reference, value date, currency, amount, ordering customer, beneficiary, involved banks, charge instruction and Unique End-to-End Transaction Reference, or UETR.

Cross-border payment messaging is moving to ISO 20022, so equivalent information may appear in formats such as pacs.008 rather than an MT103. Bank support teams may still use “MT103” informally to mean the payment record or proof that instructions were transmitted.

An MT103 or equivalent record shows that a payment instruction was sent. It does not, by itself, prove that the beneficiary’s account was credited.

Proof of final receipt comes from the beneficiary’s account record, confirmation from the receiving bank or a completed bank trace. A message can be valid even if the payment is later held, rejected, returned or posted to a suspense account pending more information.

Where SWIFT payment costs come from

The sending bank’s transfer fee is only one component of the total cost. A meaningful comparison must include every deduction, currency conversion and repair charge across the route.

Intermediary deductions are often called lifting fees. They are difficult to forecast when the sending bank cannot guarantee the correspondent route. The operational consequence is a short receipt: accounts payable records the invoice as paid, but the supplier receives less and reports an outstanding balance.

OUR, SHA and BEN charge instructions

• OUR: the sender is intended to bear transfer charges so the beneficiary receives the instructed amount. The result still depends on how each bank and corridor handles downstream charges, unless the bank provides a guaranteed-credit product.
• SHA: the sender pays its own bank’s charges, while downstream and receiving charges are borne by the beneficiary.
• BEN: charges are borne by the beneficiary and deducted from the payment amount.

These codes allocate charges; they do not guarantee the final economic cost. Before sending an invoice-critical payment, ask whether the bank guarantees the credited amount, which charges are included and whether foreign exchange occurs at any point in the route.

Why a SWIFT payment can be delayed

There is no universal SWIFT delivery time. A direct route submitted before the relevant cut-offs may settle quickly, while a multi-bank route or compliance investigation can take several business days or longer. The messaging network may deliver the instruction promptly even though the banks have not completed settlement or posted the funds.

Common sources of delay include:

• Sending, correspondent and receiving bank cut-off times.
• Weekends and public holidays in each relevant jurisdiction.
• Currency settlement windows and insufficient correspondent liquidity.
• Sanctions, fraud or anti-money-laundering screening.
• Name, address, account number, bank code or purpose-code mismatches.
• Requests for invoices, contracts, source-of-funds evidence or payment purpose.
• A beneficiary bank holding the funds before allocating them to the recipient’s account.

“Completed” in the sending bank’s portal often means the bank released the instruction and debited the sender. It does not necessarily mean every intermediary completed its processing or that the beneficiary bank posted the credit.

How to trace a delayed SWIFT transfer

Begin with the sending bank because it initiated the transfer and can start a formal trace. Avoid relying only on screenshots or a portal status. Give the bank enough structured information to identify both the message and the settlement route.

1. Collect the MT103 or ISO 20022 equivalent, UETR, bank reference, amount, currency and value date.
2. Confirm the beneficiary name, account number or IBAN, bank identifier and payment purpose exactly as submitted.
3. Ask whether the payment is held, rejected, returned or awaiting documents—not merely whether it was sent.
4. Ask the sending bank to identify the last institution that processed the payment and the current investigation owner.
5. Have the beneficiary ask its bank to search by UETR, amount, value date and ordering customer.
6. Record all fees, deductions and return reasons for future corridor decisions.

If the transfer must be recalled or amended, act promptly. A recall is a request through the banking chain, not an automatic reversal; completion may depend on intermediary processing, the beneficiary bank and whether the beneficiary has already received the funds.

When stablecoin rails may be a better corridor

Stablecoin payments may be worth evaluating when both parties can legally and operationally use USDC or USDT, the recipient supports the chosen blockchain, and the full route is more predictable than correspondent banking. Potential use cases include repeated supplier payments, destinations with recurring intermediary deductions, transfers outside bank operating hours and recipients that intend to retain stablecoins.

The comparison is not simply “SWIFT fee versus network fee.” Include fiat funding, conversion spread, blockchain fees, recipient conversion, off-ramp or local payout costs, and the internal work needed to approve and reconcile the transaction. Confirm the token, network and destination address before authorizing a send; the same stablecoin on two networks is not interchangeable at the wallet level.

A controlled stablecoin process should separate preparation from approval, verify the recipient and network, screen the address before sending, and retain evidence for reconciliation. Stablerail brings USDC and USDT treasury, approvals and signing quorum, sanctions and address screening, global payouts, fiat off-ramp, corporate cards and exportable audit evidence into one business account.

A finance team’s corridor checklist

• Record the total amount debited and the exact net amount expected by the beneficiary.
• Compare all explicit fees and foreign exchange spreads.
• Confirm the expected delivery window, cut-offs and holiday effects.
• Identify every required currency or token conversion.
• Verify beneficiary details, wallet network and supporting documents before approval.
• Assign responsibility for short receipts, returns and investigation costs.
• Retain payment instructions, approvals, references and proof of final receipt.

SWIFT remains appropriate when the beneficiary needs a bank deposit, the banking route is direct and predictable, or stablecoins are unsupported. Stablecoin rails may be more practical where correspondent chains repeatedly cause deductions or delays. The correct choice is the route that provides the best verified net receipt, timing, control and audit evidence—not the lowest headline fee.