The Society for Worldwide Interbank Financial Telecommunications (SWIFT) provides safe and secure financial transactions. The Swift transaction method solution offers fast, efficient cross-border payments or global transactions ranging from days to seconds.
How does SWIFT work?
SWIFT works by assigning banks connected to the existing cross-border payment system with a unique ID code that identifies not only the bank name but country, city, and branch. SWIFT can interact by opening and managing current and correspondent accounts. The main condition for the system’s smooth operation is its member users. So as to have the ability to organize and synchronize the information on account balances.
Geographical locations of participating banking institutions can take a longer time for transaction processing. Hence, international transfers normally take between one and two days and if several intermediary banks are involved in a transaction, it sometimes takes as long as a week or 10 business days. Thus, the intermediary banks add the fee for the total cost of the fund transfer.
Blockchain Contributions for SWIFT
The evolution of blockchain technology has contributed tremendously to SWIFT transaction options for many banking institutions and customers alike due to it being cheaper and faster. Participating banks of SWIFT can be the node of the blockchain which automatically replicates data for all member participants in the system. The cryptographic technology protects against any phishing threats or fraud attempts on accounts associated with SWIFT.
As banks can now operate as a p2p network, there will be no need to use many intermediaries for transactions. Member partners or users of SWIFT can engage in more organized and transparent transactions, so as to manage personal information.
Instant international money transaction is now possible with a low transaction fee.