Global payments
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So, this happened to me once: three days after the invoice was paid by my German client, the money still hadn’t shown up in my account. I checked my net banking every morning, refreshed it like it was going to change something, and got increasingly annoyed with my bank for “sitting on my money.” When it finally landed, the amount was also about 2% short of what I had invoiced. No one had warned me about that either.
It took me a while to actually understand what was going on. The delay and the missing amount had nothing to do with my bank being slow or dishonest. It had everything to do with how the SWIFT network works, and honestly, once I understood it, the whole thing made a lot more sense. This is the explainer I wish someone had handed me back then.
Read this article to understand how the SWIFT network actually works. We will be talking about Infinity as well, which is the best alternative to SWIFT in India.
TL;DR
SWIFT does not move money. It moves secure payment instructions between banks.
Your payment usually travels through one or more correspondent (intermediary) banks before it reaches your account. This is the reason why it takes 2 to 5 working days.
Each bank in that chain can deduct a fee (also known as intermediary fees), which is why the amount you receive is often less than what was invoiced.
SWIFT codes (also called BIC codes) identify the exact bank and branch where an international payment needs to reach.
SWIFT is migrating to a new messaging standard called ISO 20022. This will make cross-border payments faster and more transparent over the next few years.
Platforms like Infinity settle international payments outside this correspondent banking chain. So, this helps freelancers and exporters receive the maximum amount of their invoice without the usual deductions.
What Is the SWIFT Network?
SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. It is a secure messaging network that over 11,000 banks and financial institutions across more than 200 countries use to talk to each other.
Here is the part that surprises most people: SWIFT does not actually transfer money. It transfers instructions. When your client’s bank sends a payment, SWIFT carries a secure message saying, in effect, “pay this amount, to this account, at this bank.” The actual movement of funds happens separately, through each bank’s own settlement accounts, often with other banks in between.
You must think of SWIFT as a highly secure courier for payment instructions, and not a delivery truck for cash. That distinction explains almost everything else about why international payments behave the way they do.
Check out: Use Infinity’s free SWIFT code finder to find the correct SWIFT code of your bank.
How a SWIFT Transfer Actually Works
A typical SWIFT payment does not go directly from your client’s bank to yours. Unless both banks have a direct relationship, the payment passes through one or more correspondent banks, banks that act as middlemen. This is because your client’s bank and your bank do not have a direct account relationship with each other.
Here is what that journey usually looks like:
Step | What Happens |
1 | Your client’s bank sends a SWIFT payment instruction along with the funds from its own account |
2 | If there is no direct relationship with your bank, the funds route through one or more correspondent banks |
3 | Each correspondent bank verifies the instruction, deducts its handling fee, and forwards the remaining amount |
4 | The funds reach your bank, which runs its own compliance and KYC checks |
5 | Your bank credits the amount to your account, often after deducting its own conversion or handling charge |
Every additional correspondent bank in this chain adds time and, usually, a fee. A payment between two banks with a direct relationship might take a day. A payment that has to hop through two or three correspondent banks can easily take 3 to 5 working days.
Why International Payments Take So Long
Here are three things that typically slow down a SWIFT payment:
Reason | What It Means For You |
Correspondent bank hops | Each additional bank in the chain adds its own processing time, and not all banks process payments on the same schedule |
Time zones and working days | A payment sent Friday evening in the US may not be picked up by a bank in India until Monday |
Compliance and AML checks | Every bank in the chain independently screens the transaction, even when everything is legitimate |
Cut-off times | Banks process SWIFT payments in batches at fixed times of day, so a payment initiated just after a cut-off waits for the next batch |
This is one of the biggest structural differences between SWIFT and platforms built specifically for cross-border receivables. Infinity, for instance, settles payments outside this multi-bank correspondent chain, which is why receipts through Infinity tend to land faster than a traditional SWIFT route.
Review of the SWIFT network on Reddit:
This is what a user has to say about the SWIFT network payment delays on Reddit
Source: Reddit
Why You Don’t Receive the Full Amount
This is the part that caught me off guard, and it catches most freelancers and exporters off guard too. If you invoiced $1,000, you might see something closer to $970 or $980 land in your account, with no clear breakdown of where the rest went.
Here is where the money typically goes:
Sender’s bank fee: charged by your client’s bank for initiating the SWIFT transfer
Correspondent bank fees: each intermediary bank in the chain can deduct its own handling charge, often called an “OUR,” “SHA,” or “BEN” charge depending on who agreed to bear it
Receiving bank fee: your own bank may charge a fee to process and credit an incoming international payment
Currency conversion markup: if the payment is converted to INR, the exchange rate is often used that includes a margin over the actual market rate
None of these charges is usually clearly visible, which is why the amount feels like it has quietly shrunk. This lack of transparency is one of the most common complaints from freelancers and exporters dealing with SWIFT transfers regularly. It is also one of the specific problems Infinity was built to solve. International payments received through Infinity are received with minimal deduction and without any mid-market exchange rate. So, this helps in avoiding the layered deductions that a correspondent banking chain typically involves.
Who Pays the Fee: OUR, SHA, and BEN
When a SWIFT payment is initiated, the sender picks one of three fee options. This decides who ends up absorbing the correspondent bank charges.
Code | What It Means | Who Bears the Fee |
OUR | Sender pays all charges | Sender’s bank and all correspondent bank fees are paid by the sender upfront |
SHA (Shared) | Charges are split | Sender pays their own bank’s fee, receiver’s bank and correspondent fees are deducted from the amount received |
BEN (Beneficiary) | Receiver pays all charges | All fees, at every stage, are deducted from the amount you receive |
Most clients, often without realising it, send payments as SHA by default, which is why some deduction on your end is common even when your client believes they paid the full amount.
A Worked Example: Where a $1,000 Invoice Actually Goes
Here is a simplified example of how a $1,000 SWIFT payment sent as SHA might break down by the time it reaches an Indian bank account.
Stage | Amount Deducted | Running Balance |
Invoice amount sent by client | – | $1,000.00 |
Sender’s bank fee (paid separately by client under SHA) | $0 | $1,000.00 |
Correspondent bank 1 handling fee | $10.00 | $990.00 |
Correspondent bank 2 handling fee (if applicable) | $8.00 | $982.00 |
Receiving bank’s incoming payment fee | $6.00 | $976.00 |
Currency conversion markup (approx. 0.5 to 1% over market rate) | $5 to $10 | $966 to $971 |
Amount actually credited: roughly $966 to $971, against a $1,000 invoice.
The exact numbers vary by bank and route, but this is the kind of gap freelancers and exporters commonly see, usually with no line-by-line explanation from their bank.
SWIFT Codes in India: Different Banks, Different SWIFT Codes
A SWIFT code, also known as a BIC (Bank Identifier Code), is an 8- or 11-character code that identifies a specific bank and branch. Your client needs this code to make sure the payment reaches the correct bank.
A typical SWIFT code looks like this: HDFCINBBXXX
Part of Code | Example | What It Identifies |
First 4 characters | HDFC | Bank code |
Next 2 characters | IN | Country code (India) |
Next 2 characters | BB | Location code |
Last 3 characters | XXX | Branch code, or XXX for the head office |
If you are looking for the exact SWIFT code for your bank, we have detailed guides for HDFC Bank, ICICI Bank, and Axis Bank SWIFT codes.
What’s Changing: SWIFT gpi and ISO 20022
SWIFT has been actively upgrading its infrastructure over the past few years, and two developments are worth knowing about if you regularly receive international payments.
SWIFT gpi (Global Payments Innovation) allows payments to be tracked end-to-end, similar to a courier tracking number, so both the sender and the receiver can see where the payment is in real time.
ISO 20022 is a new, richer messaging standard that SWIFT member banks are migrating to. Unlike the older message format, ISO 20022 carries more structured data with each payment, including clearer information on fees and remitter details. As more banks complete this migration, cross-border payments are expected to involve fewer errors, better transparency on charges, and potentially faster processing.
This migration is still ongoing across the global banking network, so the improvement in speed and transparency will be gradual rather than immediate. It is worth watching, but it does not change the fundamental structure of correspondent banking that SWIFT payments rely on.
Infinity: A Simpler Way to Receive International Payments
Understanding how SWIFT works does not make the delays or the deductions disappear. The correspondent banking structure is built into the system, and as long as your client’s bank does not have a direct relationship with yours, some version of this journey, multiple banks, multiple fees, multiple days, is likely to repeat itself.
This is exactly the gap platforms like Infinity are designed to close. Infinity lets Indian freelancers, exporters, agencies, and SaaS businesses receive international payments without routing through the traditional SWIFT correspondent chain. That means no unexplained deductions along the way when receiving your international payments.
Infinity charges a minimum amount of 0.5% (inclusive of all fees), without any FX markup. Infinity settles your payments within 24-hours, so this eliminates the issue of delayed payments with the SWIFT route.
Infinity also generates instant and free FIRA for every successful transaction, so you don’t have to manually follow-up with the bank for your compliance paperwork.
Traditional SWIFT Transfer | Infinity | |
Amount received | Reduced by correspondent and bank fees | Flat transparent fee (0.5% inclusive of all) |
Settlement time | 1 to 5 working days | within 24 hours, since it bypasses the correspondent chain |
Compliance paperwork (FIRA) | Manual and often chargable | Free and auto-generated |
Regulatory status | Standard bank wire | AD-1 licensed, RBI-regulated |
If chasing missing amounts and waiting on unpredictable settlement times sounds familiar, it might be worth comparing how a SWIFT transfer and an Infinity transfer actually play out for your next payment.
FAQs
Is the SWIFT network safe?
Yes. SWIFT is one of the most secure financial messaging networks in the world and is used by thousands of banks globally. The security of the message itself is not usually the concern, the fees and delays from the correspondent banking process are.
How long does a SWIFT transfer take?
SWIFT network takes typically 1 to 5 working days, depending on how many correspondent banks the payment passes through and the working schedules of the banks involved.
Why was money deducted from my SWIFT transfer?
Each bank in the payment chain, the sender’s bank, any correspondent banks, and the receiving bank, can deduct its own handling fee. There may also be a currency conversion markup if the payment was converted.
What is a SWIFT code or BIC code?
It is an 8 or 11-character code that identifies a specific bank and branch, used to make sure an international payment reaches the correct destination.
Is SWIFT the same as a wire transfer?
Not exactly. A wire transfer is the actual movement of money between banks. SWIFT is the messaging network that carries the instructions for that transfer. Most international wire transfers use the SWIFT network to communicate.
Is there an alternative to SWIFT for receiving international payments in India?
Yes. Platforms like Infinity are built specifically for Indian freelancers, exporters, and businesses to receive international payments without going through the traditional SWIFT correspondent banking chain, which helps avoid the usual deductions and delays.
