Money transfers have become an integral part of our lives, especially with the rise of globalisation and the digital economy. You may need to send money online to friends and family in another country or transfer it to your own bank account – and without a doubt, you want the process to be safe and fast.
The SWIFT is a part of the global payment system. It has been the standard for international payments for five decades. However, it has some limitations, and many people are looking for alternatives to SWIFT for sending money online. How does SWIFT work, and why are certain people looking for 'alternatives for the SWIFT payment system'? Read the article to find out!
What is SWIFT?
SWIFT refers to the Society for Worldwide Interbank Financial Telecommunication. SWIFT was established in 1973 in Belgium and is a global messaging network for secure communication and settlement of international payments. It has constantly been evolving for almost five decades and currently operates in over 200 countries, connecting more than 11,000 banks and financial institutions. SWIFT helps global payment systems handle over $5 trillion worth of transactions every day. It offers advanced solutions for banking, as well as for corporates and global markets. Technically, SWIFT itself is not a payment system, but it helps banks and financial institutions exchange encrypted data and keep their processes secure.
What are SWIFT's advantages?
As SWIFT network has dominated the global remittance market for almost half a century, its core advantages are its widespread and employee experience. The service is available in hundreds of countries, connecting banks worldwide and setting the standards for the transfer industry. SWIFT specialists can both monitor payment systems’ and their customers' demand and set remittance trends. SWIFT is an ISO regulation authority, keeping the standards of international financial operations (notably, transfers) high.
What are the disadvantages of SWIFT?
While SWIFT has been the standard for international payments, it has drawbacks. One of the most significant issues with SWIFT is the time it takes to process payments: typically, a transfer goes through several banks within the SWIFT network, and the process is rather complex. Even though the system's creators claim that cross-border transfers should be 'not only trusted but instant' and that a significant percentage of the transfers are proceeded in a short period of time, it still takes an average of two to five days to complete a standard cross-country payment through SWIFT. This delay can cause certain inconveniences, especially when the money is needed urgently.
Moreover, SWIFT transfers are sometimes pricey, as the intermediary banks may add their fees to the cost. As a result, it may take a lot of work to figure out the price of a transfer.
Why one may need alternatives to SWIFT?
The rise of globalisation gives people new opportunities. Digital nomads may move to new places without changing their occupations. If they work from anywhere in the world and still receive a salary at home, they must send money to a card in another country to spend it there. The number of international projects keeps growing yearly, and their participants may also need international transfers to bring together the financial resources. Since everyone is used to speedy and accessible services, the requirements for money transfer solutions are relatively high. That's why any disadvantage of a particular system may make it less attractive for the customers.
Alternatives to SWIFT for international transfers
When SWIFT was first established, there was no comparable system for processing international payments. Half a century later, new options keep emerging – and even though all of them may have their pros and cons, many people use the opportunity to choose a transfer service they prefer rather than stick to the only one available. Here are just some of them:
Cryptocurrency
In some cases, crypto may be an excellent alternative to SWIFT. You may choose the convenient option to send money:
- Crypto-to-crypto (both the sender and receiver must have cryptocurrency wallets);
- Peer-to-peer (the sender trades a certain amount of crypto for the needed sum of fiat money, which is transferred to the receiver’s account).
Cryptocurrency transfers are believed to be fast and transparent compared to traditional remittance options. However, crypto has its drawbacks:
- For crypto-to-crypto transactions, cryptocurrency payments are mostly accepted on particular websites. So after receiving a crypto transfer, you may still need to somehow turn it into the money in your bank account – or cash.
- For peer-to-peer payments, you must either wait for the peer or agree to the less beneficial transaction terms. Therefore, the process becomes either longer or more expensive than via a more traditional remittance system.
Furthermore, the security of cryptocurrency transfers is a complex matter. Banks and most payment systems bear the responsibility for any problems that may occur during a transaction. Your funds are protected by both international standards and national laws of the bank’s registration country. In case of a cryptocurrency transfer malfunction, it may be hard to file a complaint.
SEPA
SEPA, or Single European Payment Area payment system, is often called an alternative to SWIFT. It unites 46 countries (within and outside the EU) and makes remittance easier and cheaper thanks to its standards that unify banks in different countries. However, completing a SEPA transfer may take up to several days, which can cause certain inconveniences.
Wise
Wise is a popular online money transfer service that allows individuals and businesses to send and receive money internationally. Wise uses a peer-to-peer system that matches currency transfers between individuals and companies and claims to offer faster and cheaper international payments than most traditional banks and services. A Wise transfer may be processed in just a few hours, which makes the system attractive to people worldwide. For SWIFT transfers, you may try using Wise’s own International Receive solution which speeds up the process. Yet, this SWIFT alternative has flaws: the system's fees differ depending on the currency and the transfer amount. As for Wise's mobile app, some find it 'misleading', as the logic behind charging fees may be unclear at times.
Why should you consider Profee if you are looking for a SWIFT alternative
Profee is a Cyprus-based international money transfer service available in more than 45 countries. Profee takes cross-border remittance to a new level, making it smart, secure, and hassle-free.
One of Profee's game-changing advantages is making remittance simple. For example, imagine that you are sending money to someone's card. The information about the receiver you need to provide are the person's name and surname and the card number. For a SWIFT transfer, the list of details is more extensive: you will need the name and surname, the BIC number (the IBAN for some transfers to the EU) or the SWIFT number, and the address and the full name of the receiver's bank. Sometimes additional information is requested to complete the transfer.
Another feature of Profee is the speed: card-to-card transfers are executed instantly. Therefore, the service is a perfect solution when the money must be received urgently. For some remittance services, the transfer time is much longer, which may be disappointing and irritating.
At the same time, Profee offers a variety of payment methods; for some people, trust is more important than timing. It supports SEPA and Sofort transfers, meeting the demand of EU residents who are used to these payment methods and want to ensure their transfers' security.
It's important to mention that Profee's security standards are high: a team of dedicated professionals keeps the protocols updated and ensures that the data and the assets of Profee customers are protected. Profee is PCI DSS certified and has Tier 4 data centres to maintain its safety. Profee is acting by European law as a licensed electronic money institution (EMI).
Profee is convenient: you can access it via the website or the mobile app (Android or iOS). Profee's interface is designed to be intuitive and works just as you expect – with helpful short tips appearing when necessary. The transfer procedure is straightforward, and Profee's support team is always on hand to clarify any issues.
The future of SWIFT
While many people keep looking for SWIFT alternatives, it keeps developing and implementing new features to improve the service. One is SWIFT gpi, the result of what SWIFT calls a 'largescale transformation' in cross-border remittance. SWIFT financial network addresses the needs of numerous payment systems and their clients worldwide to make international transfers more transparent and increase their speed. Without a doubt, SWIFT professionals are aware of the needs of their customers, but keeping up with the pace of technology development in the modern world is always challenging.
