SWIFT Transfers for Business: Principles and Features

Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a global network for the secure exchange of financial messages between banks and institutions. It does not physically transfer money, but transmits standardized payment instructions between banking institutions around the world. Unified formats and high reliability make SWIFT transfers for business the backbone of international settlements: banks operate under unified message standards, and transactions are checked and routed through a network of correspondents.

This is critically important for Ukrainian businesses that cooperate with foreign partners. SWIFT international transfers enable official B2B payments under contracts, allowing payments for large contracts in different currencies, receiving invoices, and maintaining transparent accounting. Such payments are recognized by banks and regulators worldwide, which simplifies tax and compliance support.

The purpose of this article is to explain in a simple and straightforward way what SWIFT is and how the SWIFT system works: from the principle of message transmission to how long the transfer takes, what fees arise, and what the final amount depends on. We will also consider where the choice of SWIFT transfer for business is optimal, and when it may be advisable to use an alternative, such as Payoneer, to reduce costs and speed up the receipt of funds.

SWIFT Transfer: What is it and how does it work?

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a global network that provides a standardized and secure exchange of financial messages between banks and payment institutions. SWIFT transmits instructions that banks use to debit and credit funds to real accounts. Simply put, when a bank wants to make an international SWIFT transfer, it does not send banknotes; instead, it sends a SWIFT message specifying to whom, how much, in what currency, and with what details.

How the SWIFT system works

The transfer can go through one or more correspondent banks, which affect the speed and final commission. The network spans over 200 countries and territories, as well as 11,000+ financial institutions, ensuring it works almost everywhere.

SWIFT enables official international transfers under contracts, invoices, and deeds, supports multiple currencies, and meets regulatory requirements in various jurisdictions. Here’s how it works.

1. The client creates a payment order at his bank.

2. The sending bank creates a standardized SWIFT message (according to the system regulations) and sends it to the network.

3. Through correspondent banks (which have mutual ‘nostro/vostro’ accounts), instructions are routed to the recipient bank.

4. The receiving bank, upon the provision of a valid message, credits the funds to the recipient.

Schematically, it looks like this:

[Sender]

│ (payment order)

      ▼

[Sender bank]

│ SWIFT messages (e.g. MT103 / GPI)

      ▼

[Correspondent bank]

│ routing through correspondent accounts (nostro/vostro)

      ▼

[Receiving bank]

│ crediting to the recipient’s account

      ▼

[Recipient]

How to make a SWIFT transfer?

The transfer begins by initiating a payment at your bank, where you provide the recipient’s full details, including their SWIFT/BIC, IBAN/account number, beneficiary name, and currency/amount. If necessary, you can also attach documents (invoice, contract). The bank then generates a standardized SWIFT message and sends it through a network of intermediaries (correspondent banks) to the recipient’s bank. After sending, the bank provides a reference number to track the status. Crediting typically occurs within 1–5 business days, depending on the currency, route, and time zones. Correspondent banks may charge additional fees.

What is a SWIFT code and where do I find it?

The SWIFT code (BIC, Bank Identifier Code) is a unique bank identifier used in international payments, as specified in the ISO 9362 standard. It is required every time you send or receive a payment from abroad: the sending bank uses the BIC to direct the payment instruction to the correct institution.

What is the format of the SWIFT code?

The SWIFT/BIC format has 8 or 11 characters:

• AAAA — bank code (letters).
• BB — country code (letters, for example UA — Ukraine).
• CC — place/location code (letters or numbers).
• DDD — additionally, the branch code (3 characters). If it is not present, it is assumed to be the main office (often denoted as XXX).

Example of Bank SWIFT code (Ukraine):

• PBANUA2X — SWIFT code of JSC CB “PrivatBank”.
• Decoding: PBAN — bank, UA — Ukraine, 2X — location. For the full 11-character form, PBANUA2XXXX (head office) is sometimes indicated.

Where to find your bank’s SWIFT code (Ukraine)

You can find your bank’s SWIFT code (Ukraine):

• in the mobile application or Internet banking — the “Requisites” / “Account Details” section;
• in a statement/reference with IBAN details, which can be generated in the application;
• on the bank’s official website (page “Requisites”, “For international payments”);
• at the bank’s contact center or with your manager.

Useful tips:

• Always specify the SWIFT code, the IBAN, and the recipient’s full name — this reduces the risk of a payment being returned.
• Check whether BIC8 (without branch code) or BIC11 (with branch code) is required for a specific transaction.
• Copy the code without spaces and paste it into the recipient field: some banks use different BICs for individual branches or currency transactions.

What data is needed for a SWIFT transfer?

To avoid delays and repeated fees, collect a complete package of details before making an international payment. If you are just checking how to make a SWIFT transfer for a company, keep this checklist handy: the correct IBAN and SWIFT/BIC, the exact bank name and address, the payment currency, the purpose, and the type of commission distribution (OUR/SHA/BEN). For international SWIFT transfers, it is critical, especially when correspondent banks are involved. Check separately the SWIFT code of your recipient’s bank: a single character error results in a refund. Below is a summary table for SWIFT transfers for business.

Required	Example
Recipient’s name/title	Export Soft LLC / Ivan Ivanenko
Recipient’s address	Dilova St., 10, office 5, Kyiv, 03150, Ukraine
Recipient’s IBAN	UA12 3003 1234 0000 0000 5678 9012
Currency and amount	USD 12,500.00
Bank SWIFT/BIC code	PBANUA2X
Beneficiary’s bank name	PrivatBank
Beneficiary’s bank address	1D Hrushevskoho St., Kyiv, 01001, Ukraine
Interbank intermediary (if necessary)	CITIUS33 (Citibank N.A., New York, USA)
Account with an intermediary bank (if necessary)	12345678 (nostro for the recipient’s bank)
Payment purpose / Reference	Invoice No. 2025-104 dated 10.10.2025, payment for IT services
Commission distribution type	OUR (all fees paid by the sender) / SHA / BEN
Payer details (at the bank’s request)	Import Trade LLC, Tax ID code, payer address

Useful tips:

• Copy the details without spaces and double-check with the recipient.
• If the bank requires BIC11, add the branch suffix (e.g., PBANUA2XXXX).
• For large amounts and sensitive shipments, consider OUR so that the recipient receives the full amount.
• Avoid general wording in the assignment; instead, include the invoice number, date, and nature of the services.

How much does a SWIFT transfer cost?

The cost of international SWIFT transfers consists of several bank fees. To accurately calculate expenses, consider your bank’s commission, correspondent bank fees, any potential commission from the recipient’s bank, and the exchange rate margin during conversion. For business SWIFT transfers, the choice of OUR/SHA/BEN schemes determines who pays which fees.

Parameter	Typical range or model	Who pays (OUR / SHA / BEN)	When is it charged?	How to reduce costs
Sender’s commission	$10–50 (fixed) or % of the amount	OUR/SHA/BEN — the sender always pays his bank	When initiating a payment	Compare rates from several banks; send during business hours
Correspondent bank commissions	$5–30 per correspondent	OUR — paid by the sender; SHA/BEN — deducted from the amount	On the route between banks	Choose OUR for critical amounts; coordinate the route, avoid long chains with different intermediaries
Beneficiary bank fee	$10–20 (sometimes a percentage)	OUR — compensated by the sender; SHA/BEN — deducted from the credited amount	During enrollment	Warn the recipient about the OUR scheme; check local rates
Exchange rate margin (conversion)	0.3%–2.5% to interbank (depends on the bank)	Depends on the party where the exchange takes place	If the payment currency ≠ the account currency	Match invoice currency; send in the recipient’s account currency
Additional costs (return/change of details)	$10–30 per query/trace	Depending on the situation	When making corrections/returns	Avoid mistakes in IBAN and SWIFT/BIC; add the full payment Purpose
Execution time	Up to 5 business days	—	Depends on time zones, AML/KYC, cut-off	Submit in the morning; avoid weekends and holidays; provide supporting documents in advance

Remember the commission distribution schemes:

• OUR — the sender pays all fees, the recipient receives the full amount.
• SHA — commissions are shared: the sender pays their own, and the rest is deducted from the transfer.
• BEN — all fees are paid by the recipient (withheld from the amount).

Calculation examples:

• Transfer $2,000 USD (OUR) from Ukraine to the EU:
  Sender: $25 (own bank) + $15 (correspondent) + $15 (recipient’s bank) = $55. The recipient receives $2,000 in whole.
  
• Same transfer (SHA):
  Sender: $25. En route: $15 (correspondent) + $15 (recipient’s bank) will be deducted from the payment.
  Recipient: $1 970. The loss is $30 for the recipient.
  
• Transfer in the “wrong” currency:
  If the invoice is in EUR and you send USD, it will be converted with an exchange rate margin (0.3–2.5%). Agree on the currency in advance to avoid double exchange.

Useful tips:

• Agree on the payment currency with the customer/supplier — minus double conversion.
• For critical amounts, choose OUR, for insignificant amounts, consider SHA.
• Avoid long chains of correspondents.
• For frequent small payments, consider alternatives (e.g. Payoneer), as they can be faster and cheaper than transferring via SWIFT.

Advantages and disadvantages of SWIFT transfers

To summarize briefly, SWIFT is used by companies as a global standard for international transfers, convenient for large B2B operations, but not always optimal in terms of price and speed. The points below will help you better understand how the SWIFT system works in real business cases.

Advantages	Disadvantages
Reliability and global acceptance (200+ countries)	Higher total commissions (sender, correspondents, recipient)
Standardized formats; transparency via SWIFT GPI	Extended enrollment period: up to 5 business days
Support for large amounts and contract B2B payments	Not profitable for small or frequent transfers
Legal correctness, AML/KYC compliance	Challenging routes and hidden correspondent fees
Multicurrency; OUR/SHA/BEN selection	Requires accurate details (IBAN, SWIFT code of the Ukrainian bank)
Status tracking via GPI (where available)	Not all banks/routes support GPI

A useful tip for SWIFT transfers for business: Use SWIFT for large/official payments, and consider fintech alternatives (e.g., Payoneer) for small, regular amounts. This way, you can reduce fees and expedite the transfer of funds.

How Ukrainian businesses can use SWIFT without losses

To utilize the SWIFT system with minimal costs, use these tips. They will help optimize your international SWIFT transfers and avoid common mistakes.

• Open foreign currency accounts (USD/EUR) for an individual or company.
• Pay in the currency you are invoiced in to avoid double conversion and hidden margins. This is a fundamental step if you are considering how to make a SWIFT transfer without incurring unnecessary losses.
• Reconcile the currency and amount with the counterparty prior to issuing the invoice.
• Ask which currency is more convenient for the recipient; immediately specify this in the contract/invoice. Fewer conversions mean fewer fees and faster crediting.
• Check each character in the details: IBAN, SWIFT/BIC, and bank address.
• A single character error will result in a refund and re-fees. Please check carefully. SWIFT code of the bank of Ukraine or the counterparty’s country, according to official sources/bank application.
• Choose the commission distribution scheme consciously: OUR / SHA / BEN.
• For critical B2B payments, use OUR (the recipient receives the full amount). For regular small transfers, SHA is sometimes sufficient. Agree on this with your partner before sending.
• Ask your bank about alternatives with fewer correspondent banks. Each additional correspondent incurs potential costs.
• Sending in the morning on a business day speeds up execution. Plan international SWIFT transfers based on time zones.
• Prepare documents in advance.
• Add the invoice/contract number to the “Payment purpose” and, upon request by the bank, commercial documents. This reduces the risk of additional checks and delays.
• Use SWIFT GPI (where available) for tracking.
• Ask the bank for a GPI reference: tracking will help you see if the payment is “stuck” and what fees the intermediary bank has charged.
• Create payment templates for regular contractors.
• Save the IBAN, BIC, bank address, OUR/SHA scheme, and standard destination text — this reduces the risk of errors and speeds up the process.
• For small and frequent payments, consider fintech alternatives. If the average check is small, Payoneer (or others) may be faster and cheaper, and leave SWIFT for large/official amounts.

These steps are not just practical when undertaking SWIFT transfers for business, but an operational blueprint that will save you money and time.

SWIFT alternatives for Ukrainian business

For official international SWIFT transfers, it’s a universal standard, but it’s not always the fastest and cheapest option. If you’ve already figured out what SWIFT is and how it works, it’s a good idea to have a Plan B for small or frequent payments. Below are practical alternatives to consider when deciding whether to use a SWIFT transfer for business or opt for an alternative method.

When and what alternative can be chosen instead of SWIFT

Understanding what SWIFT is does not always make it the best choice: for small or regular payments, the fees and time taken by this system can be excessive. In such cases, it is worth considering fintech alternatives (such as Payoneer) or local networks (SEPA, faster payments). They often have faster crediting, transparent rates, and fewer intermediaries; therefore, fewer unforeseen costs for the business.

Scenario	Optimal solution	Why is it better than SWIFT?	Limitations/Notes
Regular small payments to freelancers/partners	Payoneer	Lower and predictable rates, faster enrollment, and invoicing	Both parties must have Payoneer accounts; the direction and currency of the transfer must be supported by the service
Payments in euros within the EU/EEA	SEPA Credit Transfer (SCT)	Low fees, crediting ≈1 business day (sometimes instantly —SEPA Instant), transparent rules	Works only in EUR and in participating SEPA banks; not suitable for payments outside the EU/EEA
UK payments in GBP	Faster Payments	Very fast and cheap for local transfers	Limited by geography and currency
Micropayments/subscriptions in e-commerce	Payment gateways + Payoneer for withdrawal	Better payment conversion, convenient billing and subscriptions	There are payment provider fees for accepting cards; it requires module connection and fraud protection
One-time urgent transfers (<24 hours)	Local payment networks of the recipient’s country	Faster transfer of funds, fewer intermediaries	Subject to availability, local networks (e.g., SEPA, Faster Payments) and limits

Payoneer for recurring payments: a practical alternative to SWIFT

SWIFT is a reliable tool for large contracts and formal B2B payments. For small businesses and e-commerce, it makes sense to combine SWIFT with Payoneer to better control commission costs, speed up payments, and simplify operational routines. Payoneer works well in business scenarios, including with regular B2B payments, invoicing, mass payments to contractors, receiving funds from various marketplaces, and network transfers between accounts with transparent rates — exactly what Ukrainian sole proprietors, agencies, and e-commerce businesses often need.

Why Payoneer stands out:

• Lower, projected tariffs for regular payments and invoicing.
  
• Speed: Network transfers are credited much faster.
  
• Multicurrency balances and easy invoicing of customers abroad.
  
• Convenience for SMB/e-commerce: less paperwork, transparent processes for the financial manager.

Frequently asked questions (FAQs)