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What is SWIFT payment
A. As with many technological terms, SWIFT is an acronym. It stands for Society for Worldwide Interbank Financial Telecommunications. SWIFT is an industry-owned co-operative that supplies secure messaging services to financial institutions.
Q. How does SWIFT work
A. The SWIFT network sends messages using a technology known as packet switching. Packet switching involves splitting up data into small sections, each of which contain their destination address. The individually addressed packets, which don't need to be sent as a whole, can then be sent independently along the best route at any given time. The packets of information are then reassembled once they reach their destination.
The SWIFT network has a number of components. Processors responsible for operating the system are located in the USA and the Netherlands. These processors route and securely store messages, generate reports on whether messages have been sent and received successfully or not. Additionally they archive information and generate bills and statistics.
Q. How is the SWIFT network accessed
A. Users can either enter the network via a leased line, dial-up connection or Public Data Network connection to regional processors that link up to the SWIFT network. Each user site has its own terminal for entering the network and entering messages once connected.
Access normally requires both a username and password to be entered, and uses Smart Card technology.
Q. Can anyone become a member of SWIFT
A. No, the organisation must hold a Banking License in order to become a member. Members pay a joining fee and are then charged for each message they send.
Q. Why was SWIFT created
A. Because of the limitations of the then used system, Telex. Telex was considered too slow, too insecure and didn't have a standardised format for the data it transferred, all of which added up to an inefficient system.
As a result seven major international banks met in 1974 to discuss a suitable replacement for Telex. A society was formed in 1977 and 230 banks from five countries went live with the system. SWIFT currently has around 7,000 members from nearly 200 countries.
Q. How many messages does SWIFT handle a day
A. Since its inception in the late 1970s, SWIFT has had to increase the number and type of messages it handles to cope with the expansion in the type of financial transactions that are possible. It now handles around five million messages a day.
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by Lisa Cardy