Swift

Swift is a global financial infrastructure spanning 200+ countries and servicing more than 13,000 companies. Alongside a range of merchants and institutions, it enables online brokers and swing traders to make international payments via a secure messaging system. Our introduction to Swift payments will cover the process of making trading deposits and withdrawals, plus a review of transaction charges and transfer speeds.

Top brokers that accept Swift deposits in 2024 include Plus500, eToro and AvaTrade.

How Swift Works

The Swift payment mechanism was developed in the 1970s to create a global financial messaging service. Essentially, a common problem needed to be addressed; how to communicate cross-border payments. Thus, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) was born.

Headquartered in Belgium, services were officially launched in 1977 and the firm rapidly became one of the most reliable global partners for companies around the world. New offices continue to open today, with an ambition to widen its global presence even further. In 2020 alone, the company recorded over 30 million daily Swift payments.

Swift Payments Explained

The Swift payment method is a comprehensive messaging network. It is used by banks and financial institutions to quickly, accurately, and securely send and receive information, including money transfer instructions. Essentially, the company organises the movement of funds between two accounts, for example, a payment to an online trading account. After the sender pledges the transaction through the broker’s platform, the instruction is passed through the secure network.

Each payment is unique, identified by account codes, currency, value and date. Once the payment message types have been acknowledged, funds will be transferred via wire transfer or clearing bank. This is the same process whether transactions are made from the UK, South Africa, New Zealand, Canada or Australia. It is a global network.

Transaction Times

Deposits to a swing trading account via Swift can take several days. Once a transaction is initiated, message details are sent to the first corresponding bank before being passed to other intermediary banking institutions involved. Due to coordination with intermediary banks and the volume of messages, Swift payments can take around 2-5 working days to be processed. Additional time may also be required for AML checks or due to the time zone differences of the recipient’s destination.

The payments company is also working on an instant transfer gateway project, however, this is yet to be rolled out in full. The payments platform, known as GPI, is being trialled to facilitate instant international payments with up-front fees and foreign exchange transparency for traders.

Note, brokers may also have their own timescales which can cause delays in funds being available in your trading account. In addition, Swift does not clear payments over the weekend or public holiday dates. As a result, faster alternatives such as Skrill and Trustly, are increasingly being used in the trading world.

Looking to the future, we expect payments to be executed in seconds with Swift, but it’s unfortunately not quite there yet.

Pricing Review

Transaction fees vary depending on intermediary banks, the final destination and transfer volumes. Some of the biggest banks in the UK, for example, charge a flat rate for payments using Swift, meaning swing trading clients can deposit frequently with no price volatility or unexpected charges. Also, online brokers typically absorb fees for payments. Still, it is always worth checking and understanding any charges on the broker’s deposit and withdrawal page.

Security Overview

Swift is a highly secure, international payment method. The messaging system focuses on the principles of traceability and transparency, operating between member banks on dedicated networks. As individual customers and traders are not directly involved in the process, the likelihood of scams or fraudulent activity is reduced.

The payment gateway provides banks with several security enhancement features. This includes Relationship Management Application (RMA) and Swift Payment Controls – systems designed to detect high-risk payments. It combines real-time monitoring, alerts and the blocking of sent payments with independent daily reporting. An additional measure available to member institutions is called Payments Plus – API integration that automatically validates transactions and reduces risk.

Pros of Swift Payments for Traders

• Customer Support – Registered users can access a 24/7 customer service team. Regional telephone support centres are available for help and guidance on payments
• International Payments – The system was developed to streamline global payments regardless of currency or language restraints. The message file formats are recognised internationally so there are no process flow restrictions regardless of your broker’s location
• Availability – Swift digital payments are recognised across various industries in Europe and worldwide. Major UK standard banks including Barclays, NatWest, Nationwide and HSBC use the payment service, for example, so you can be assured of secure payments to your trading account
• User Reviews – The Swift payments platform has a host of positive user experiences. Customers highlight the ease of retail and vendor payments, useful transaction tracking and confirmation protocols as the main benefits
• Accountability – Swift wire payments detail transaction routes and applicable charges meaning clear proof of payment is provided. Traders can track deposits and understand the expected clearing and settlement time frame to a live account.

Cons of Swift Payments for Traders

• Slow Processing Times – The payment gateway does not always provide instant processing versus competitors. Typical timings are up to five working days for funds to clear in a trading account
• Bank Account Registration Required – Traders must hold an account with a participating bank to enable Swift payments. Minimum requirements to register for an account will vary by country but typically involve providing proof of residency
• Expensive – Fees can be incurred by both the sender and receiver. It is cheaper to use local, low-cost infrastructure to make global payments, though these often don’t provide the same levels of transparency and traceability. Look for a broker that will absorb these charges so they don’t eat away at profits

How to Make Swift Deposits & Withdrawals

The global payments system is not directly involved in the movements of funds. Instead, it is a standard bank-to-bank messaging flow that companies use to communicate payment instructions via a secure network. This can be used for making overseas payments or local transactions.

Rather than depositing directly through your broker’s site, you will complete the transaction via your bank. Swift codes (BIC) and IBAN numbers will be provided by compatible brokers so you can complete the fields for your bank to send the messages. Look out for the logo on your broker’s site to see if this is an accepted method of deposit.

It is a similar process to receive Swift withdrawals. Swing traders will need to request the broker submits a bank wire transfer to a registered account. The time frame for this to be actioned varies between trading platforms. Thankfully, Swift GPI payments tracking allows banks to provide end-to-end tracking to customers. This includes step-by-step visibility of each transaction.

Verdict

Swift is an industry-recognised payment system offering secure international transfers. Services are integrated directly from your existing bank account, providing a straightforward and safe way to deposit and withdraw trading funds. On the downside, swing traders should take note of the relatively slow processing times and third-party fees and exchange rates that may be charged by some brokers.

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