How does International Money Transfer work?
Have you ever transferred money abroad? If yes, You must have heard about the SWIFT code. SWIFT is not a payment service. It’s simply a secure messaging service used by banks.
SWIFT’s full form is Society for Worldwide Interbank Financial Telecommunications. When we transfer money from one country to another, your bank asks for the recipient’s bank details and the SWIFT code of that bank.
How do bank uses this code to transfer money to another bank account?
let’s see with the help of an example.
For example, Person A who have a bank account in Bank A and wants to send $100 to Person B in Bank B. When Person A is transferring the amount they will provide the SWIFT code of Bank B. SWIFT will then send a secure message communication to Bank B including all the necessary information. When Bank B receives this message payment transfer will get started.
Let’s see how the transfer will work.
SWIFT works when banks have a direct connection to each other, meaning Bank A will have their account in Bank B and Bank B will have their account in Bank A.
Bank A will deduct the $100 from Person A account.
Bank A will credit the $100 to Bank B’s account in their bank.
