How to pay using a SWIFT code?

How to pay using a SWIFT code: 3% to 7% value loss

Mastering how to pay using a SWIFT code protects you from hidden deductions and underpayment disputes. Sending money internationally through traditional channels involves extra markups that reduce the final amount your recipient gets. Review the correct fee structures to ensure your funds arrive safely without unexpected charges.

A Quick Guide to Paying with a SWIFT Code

Paying using a SWIFT code involves initiating how to make an international wire transfer through your banks online portal, mobile app, or local branch. You provide the recipients banking details, including the 8 to 11 character SWIFT or BIC code, and the payment is routed through the international banking network. While the process is generally secure, many first-time users overlook transfer fees and exchange rate markups that can significantly increase the total cost.

The SWIFT network handles the vast majority of the worlds cross-border payments, with over 11,000 financial institutions connected to the system in 2026. This method is highly secure because it identifies the exact bank and branch receiving the money, leaving very little room for ambiguity. However, this security comes with a cost. While the infrastructure is robust, traditional banks often charge anywhere from $35 to $55 for a single outgoing transfer. Understanding how to pay using a SWIFT code correctly helps ensure your money arrives safely and with fewer unnecessary deductions.

What Information Do You Need Before You Start?

Before you even log into your bank account, you must gather five specific pieces of information. Missing just one can lead to a rejected payment and a headache that lasts for weeks.

You will need: Recipient Full Name: Must match their bank records exactly. Recipient Address: The physical address associated with their account. IBAN or Account Number: The International Bank Account Number is standard in Europe, while other regions use standard account numbers. SWIFT/BIC Code: The 8 or 11 character identifier for the recipients bank. Bank Name and Address: To verify the SWIFT codes destination.

Carefully reviewing the recipients information before sending the transfer is essential. Even a single incorrect character in an IBAN or account number can delay the payment or cause it to be rejected. International transfer corrections and recalls may also involve additional bank fees and extended processing times.

Step-by-Step: How to Initiate the Transfer

Once you have your data ready, the actual payment process is relatively straightforward but requires high focus. Errors in data entry are a common cause of international payment delays.^[3] Most systems are designed to catch basic format errors, but they cannot tell if you have entered the wrong persons account number.

Follow these steps: 1. Log in and Navigate: Find the section labeled International Payments, Wire Transfers, or Send Money Overseas. 2. Enter Recipient Details: Carefully input the name, address, and account number/IBAN.

3. Enter the SWIFT Code: This is the most critical part. The system should automatically populate the banks name once you enter a valid code. 4. Choose the Amount and Currency: Decide if you are sending the amount in your local currency or the recipients currency. 5. Select the Fee Type: You will usually see three options: OUR (you pay all), SHA (shared), or BEN (recipient pays all). Choose SHA for most standard business transactions. 6. Review and Confirm: Look over the exchange rate one last time before submitting.

Wait a second. Did you check the exchange rate? Many banks hide their profit there. While a flat fee of $40 sounds like the only cost, the real expense is often tucked away in a markup that can be 4% to 5% higher than the mid-market rate ^[4] you see on Google. Rarely does a bank offer the real exchange rate to retail customers.

Understanding the Costs: Fees and the Hidden Trap

Here is the hidden fee trap I mentioned earlier: intermediary bank charges. When you send money via SWIFT, your bank might not have a direct relationship with the recipients bank. In these cases, the money travels through one or more correspondent or intermediary banks. Each of these banks can take a cut of the money - usually between $10 and $30 per bank - without warning you upfront.

If you send exactly $1,000 using the SHA (shared) fee setting, your friend might only receive $960. This is frustrating for everyone involved. To prevent this, if you need an exact amount to land in the account (like for a bill), always choose the OUR fee setting. This forces you to pay all intermediary costs upfront, ensuring the recipient gets every cent. It might cost you more initially, but it prevents underpayment disputes. Most traditional bank users lose about 3% to 7% of their total transfer value to these combined fees and exchange rate markups. ^[5]

The system can still feel outdated for some users. Even though SWIFT gpi (global payment innovation) has improved processing speeds in 2026, how long does a SWIFT transfer take may still range from 1 to 5 business days depending on the banks involved. If a bank relies on intermediary institutions or older processing systems, delays can still happen before the funds reach the recipient.

SWIFT vs. Modern Alternatives: Which is Better?

You dont always have to use your banks SWIFT service. For smaller amounts, cheapest way to send money internationally options like digital fintech platforms are often cheaper and faster. However, for large transfers (above $10,000), the security and regulatory compliance of a traditional bank are hard to beat.

Comparison of International Transfer Methods

Traditional Bank (SWIFT)

Usually 3% to 5% markup above mid-market

Large, high-security transfers above $10,000

High ($35 - $55 per transaction)

1 to 5 business days

Digital Fintech (e.g., Wise)

Real mid-market rate with no hidden markup

Small to medium personal or freelance payments

Low (Variable, often under $10)

Instant to 2 business days

Liam's Freelance Payment Struggle

Liam, a graphic designer in London, needed to pay a developer in Vietnam for a collaborative project. He used his traditional bank to send $500, thinking the $30 fee he paid was the only cost involved.

He was wrong. Two days later, his developer complained that only $465 had arrived in the account. An intermediary bank had taken an unannounced $15 cut, and the exchange rate was much worse than Liam expected.

Liam realized he had used the 'SHA' fee setting without checking for correspondent banks. For the next payment, he switched to a digital fintech platform that used the real exchange rate and showed all fees upfront.

This switch saved Liam both time and money, ensuring his developer received the exact amount required without any further payment disputes.