Introduction
When it comes to cross-border money transfers, one of the first terms that comes up is SWIFT. For more than 40 years, this international network has served as the backbone of financial communications among banks, institutions, and organizations worldwide. But what exactly is SWIFT, how does it work, and why is it so important?
What Is SWIFT?
The word SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. Founded in Belgium in 1973, SWIFT was created to provide a secure and standardized system for transmitting financial messages between banks. Before SWIFT, institutions relied on telex, which was slow, error-prone, and lacked sufficient security.
It is important to note that SWIFT does not move money itself. Instead, it is a secure messaging system that banks use to exchange payment instructions, transfer requests, letters of credit, guarantees, and many other types of financial communication.
How Does It Work?
When you request an international transfer, your bank sends a payment instruction through the SWIFT network to the receiving bank. Each bank is identified by a SWIFT code (also called BIC), which ensures that the message reaches the correct destination.
In simple terms, the process includes:
- The customer submits a transfer request at the sending bank.
- The bank sends an encrypted message through SWIFT to the receiving bank.
- The receiving bank verifies the message and processes it.
- The money is credited to the beneficiary’s account.
Main Uses of SWIFT
SWIFT is not limited to personal transfers. Its applications cover a wide range of financial operations:
- Cross-border payments between banks
- Messages related to letters of credit and guarantees
- Settlement of securities and stock transactions
- Financial communication between central banks and major institutions
This is why SWIFT is often called the common language of global finance.
Advantages of SWIFT
SWIFT has become indispensable because of its:
- High security: All messages are encrypted and digitally signed.
- Standardization: A unified format used by all member institutions.
- Speed and reliability: Messages are transmitted within minutes.
- Global coverage: More than 11,000 institutions across 200 countries are connected.
SWIFT and Iran
Iranian banks used to rely on SWIFT for international transfers. However, with the escalation of global sanctions, many Iranian banks lost access to the network. This restriction has created significant challenges for companies and individuals trying to conduct cross-border transactions. As a result, many turned to alternative methods such as unofficial remittance services, exchange offices, or intermediary payment platforms.
Alternatives for Iranian Users
For Iranians who cannot directly access SWIFT, localized alternatives have emerged. Platforms like OpexPay provide secure international payment services, including online purchases, subscription payments, and even receiving income from global employers. Unlike unofficial workarounds, these platforms are tailored to the needs of Iranian users, offering more stability and reduced risk.
The Future of SWIFT and Cross-Border Payments
Although SWIFT remains the most widely used global financial messaging network, new technologies such as blockchain and digital currencies are creating alternatives. At the same time, countries facing sanctions are working to develop their own domestic or regional networks to reduce reliance on SWIFT.
Conclusion
SWIFT is the lifeline of global financial communications, enabling secure, fast, and standardized messaging between financial institutions. Yet, due to restrictions, Iranian businesses and individuals face major barriers in using it. In this context, platforms like OpexPay play a critical role in bridging the gap, providing Iranians with safer and more reliable ways to connect to international markets.
