SWIFT interbank payments system explained.
SWIFT is the acronym for The Society for Worldwide Interbank Financial Telecommunication. Founded in 1973, Belgium-based SWIFT is the world’s international payments network.
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Swift does not handle actual transfer of funds itself, but instead uses a messaging system (operates more like a middleman) to facilitate rapid cross border payments in a secure and inexpensive manner.
The SWIFT messaging system was developed in the 1970s to replace relying upon Telex machines.
The firm is a co-operative of banks that uses messaging service to facilitate cross border payments. The firm is managed by the G-10 central banks (Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, United Kingdom, United States, Switzerland, and Sweden), the European Central Bank, and the National Bank of Belgium.
In 2012, a SWIFT Oversight Forum was further established, in which central banks from several major economies also joined the G-10 central banks.
Today, thousands of financial institutions in over 200 countries use the SWIFT international payments system.
A per SWIFT’s official website, over 40 million messages are sent every day using the SWIFT system, amount to transactions worth trillions of dollars.
Today, SWIFT is to the financial world like what Internet is to the common population.
Website: Swift.com
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