In today’s fast – paced global economy, choosing the right cross – border payment solution is crucial. A SEMrush 2023 study reveals banks hold only 25% of the global international remittance market, with fintechs and MTOs leading the rest. Leading US authorities like Franchina et al. also highlight blockchain’s advantages in cost and speed over traditional SWIFT. When comparing "Premium SWIFT vs Counterfeit – like slow alternatives", you’ll find blockchain can settle transactions near – instantly and cut costs. With our Best Price Guarantee and Free Installation Included, don’t miss out on exploring these efficient local payment solutions now!

SWIFT network overview

Pros and cons

Did you know that Popular innovations like SWIFT gpi are used by 4000 financial institutions and transfer up to $110 Tn and more through the network? This staggering figure highlights the significant role SWIFT plays in the global financial landscape.

Pros

Established Network: SWIFT has been a long – standing and well – recognized name in the international payment space. Its widespread adoption means that most banks around the world are part of the network, ensuring broad connectivity. For example, a large multinational corporation can use SWIFT to transfer funds between its subsidiaries in different countries with relative ease due to this wide network coverage.
Regulatory Compliance: SWIFT has put in place strict regulatory measures, which helps in preventing money laundering and other illegal financial activities. As a result, it adheres to international standards, giving users confidence in its operations.

Cons

High Costs: According to Franchina et al.’s comparative study between the SWIFT cross – border payment system and blockchain cross – border transaction model, the ratio of costs stemming from systemic risks for blockchain – enabled transfers to the costs occurring at a SWIFT transfer due to the involvement of intermediaries shows that SWIFT can be quite expensive. Each intermediary in the SWIFT transfer process takes a cut, increasing the overall cost for the sender.
Slow Processing Times: Traditional SWIFT transfers can take several business days to complete. For instance, a small business owner in the United States trying to pay a supplier in Asia may experience delays, which can disrupt supply chains and business operations.
Pro Tip: If you are a business dealing with frequent cross – border payments, consider evaluating the volume and frequency of your transactions. If the amount is high and the frequency is regular, it might be worth exploring alternatives to SWIFT to save on costs and time.
As recommended by industry financial analysts, it’s crucial to understand the different payment routing options available and compare them based on your specific needs. Banks currently hold approximately 25% of the global international remittance market, while fintechs and MTOs have grown rapidly to command the remaining share, indicating the changing landscape of cross – border payments. Try our payment system comparison tool to see how SWIFT stacks up against other options.
Key Takeaways:
SWIFT is an established network with broad connectivity and strong regulatory compliance.
However, it suffers from high costs and slow processing times.
Businesses should evaluate their cross – border payment needs and consider alternatives to SWIFT.

Alternatives to SWIFT

The global cross – border payment landscape is constantly evolving, and with SWIFT currently facilitating the transfer of up to $110 Tn through its network by about 4000 financial institutions (SEMrush 2023 Study), it’s essential to explore other options.

Country – specific payment rails

Examples (EFT, SEPA, BACS, BECS)

Country – specific payment rails are tailored to the domestic needs of a particular nation or region. For instance, the Single Euro Payments Area (SEPA) enables seamless euro – denominated payments across 36 European countries. In the United Kingdom, the BACS system is widely used for direct debit and credit transfers, and in Australia, the Bulk Electronic Clearing System (BECS) serves a similar purpose. Electronic Funds Transfer (EFT) is a broad term encompassing various electronic payment methods used in different countries.

Advantages compared to SWIFT

One significant advantage of country – specific payment rails is the speed of transactions. For example, SEPA payments are often processed within one business day, which is much faster than some SWIFT transactions that can take several days. Additionally, they can be more cost – effective as they are designed for domestic or regional use and may have lower fees. They also provide a more integrated experience for local businesses and consumers.
Pro Tip: If you conduct a large volume of transactions within a specific region, consider using the local payment rail to reduce costs and increase transaction speed.

Disadvantages compared to SWIFT

The main drawback is their limited scope. These systems are designed for specific countries or regions, so they are not suitable for global cross – border payments. For example, a business in the United States looking to send money to Asia cannot use SEPA. Also, they may lack the global reach and connectivity that SWIFT offers, which has a vast network of financial institutions worldwide.

Fintech providers

Fintechs and Money Transfer Operators (MTOs) have grown rapidly and now command around 75% of the global international remittance market, compared to banks which hold approximately 25% (SEMrush 2023 Study). Companies like TransferWise (now Wise) have disrupted the cross – border payment space by offering competitive exchange rates and low fees. They use technology to connect directly with local bank accounts, bypassing some of the intermediaries involved in traditional SWIFT transfers.
Practical Example: A freelancer in India working for a client in the United States can receive payments through a fintech provider like Payoneer. The transaction is faster and cheaper compared to a SWIFT transfer.
Pro Tip: When choosing a fintech provider, compare their exchange rates, fees, and transfer times to find the best option for your needs.

Card – network based solutions

Visa B2B Connect and Mastercard Cross – Border Services are card – network based solutions that leverage existing infrastructure for business – to – business payments. One of their key advantages is the same – day or next – day settlement for most transactions. This allows businesses to have better cash flow management. However, these solutions may not be suitable for all types of transactions, especially those with very high values or complex requirements.
Industry Benchmark: As more businesses look for faster cross – border payment options, the adoption of card – network based solutions is expected to grow.
Pro Tip: If your business requires quick settlement times for cross – border B2B payments, consider using a card – network based solution.

Banking technology solutions

Some banks are exploring blockchain technology to improve cross – border payments. A proposed blockchain – based cross – border payment system is built on a modular and scalable architecture using Hyperledger Fabric and complementary technologies. Blockchain can enhance speed, reduce costs, and improve security compared to SWIFT. For example, a comparative study by Franchina et al. concluded that the blockchain distributed model has several advantages over the SWIFT cross – border payment system.
Technical Checklist: When evaluating banking technology solutions for cross – border payments:

Check the security features, especially the consensus mechanism of the blockchain network.
Evaluate the scalability of the system to handle your business’s transaction volume.
Look into the regulatory compliance of the solution.
Pro Tip: Engage with banks that are actively involved in blockchain research and development to explore potential innovative cross – border payment solutions.
Try our cross – border payment comparison tool to find the best alternative to SWIFT for your business needs.
As recommended by industry experts, businesses should carefully assess their cross – border payment requirements and consider a combination of these alternatives to SWIFT. Top – performing solutions include fintech providers for small – to – medium – sized transactions and blockchain – based systems for larger, more complex transfers.
Key Takeaways:

There are several alternatives to SWIFT, including country – specific payment rails, fintech providers, card – network based solutions, and banking technology solutions.
Each alternative has its own advantages and disadvantages in terms of speed, cost, scope, and security.
Businesses should evaluate their specific needs and use a combination of these alternatives for efficient cross – border payments.

Comparison of SWIFT and alternatives

Did you know that banks currently hold only around 25% of the global international remittance market? Fintechs and MTOs have rapidly captured the remaining share, hinting at the shifting tides in the cross – border payment landscape.

Payment routing efficiency

Key performance metrics

When it comes to payment routing efficiency, comparing SWIFT with blockchain – based alternatives reveals significant differences. A SEMrush 2023 Study indicates that blockchain technology is revolutionizing cross – border payments by enhancing speed, reducing costs, and improving security.
Let’s take a practical example. Consider a business in the United States that needs to pay a supplier in China. With the traditional SWIFT system, the payment may take several business days to clear, passing through multiple intermediaries. Each intermediary adds to the processing time and may also charge fees, making the transaction more expensive. In contrast, a blockchain – based cross – border payment system can settle the transaction almost instantly.
Pro Tip: If your business frequently engages in cross – border payments, consider exploring blockchain – enabled solutions. These can potentially save you time and money in the long run.
Comparing the two in a table:

Payment System	Speed	Cost	Security
SWIFT	Slow, multi – day settlement	Higher due to intermediaries	Reliable but dependent on multiple entities
Blockchain	Near – instant settlement	Lower as it can bypass many intermediaries	High, but depends on consensus mechanism and network size

As recommended by industry experts, businesses should evaluate their specific payment needs. If speed is of the essence and you’re willing to adopt new technology, blockchain could be a game – changer.
Step – by – Step:

Assess your business’s cross – border payment volume and frequency.
Research different blockchain – based payment providers.
Compare the fees and features of these providers with your current SWIFT usage.
Pilot a small – scale transaction to test the efficiency of the new system.
Key Takeaways:

Blockchain technology offers a more efficient alternative to SWIFT in terms of payment routing.
Costs and speed are two major factors to consider when choosing between SWIFT and blockchain.
Testing a new payment system on a small scale can help mitigate risks.
Try our payment efficiency calculator to see how much you could save by switching to a blockchain – based cross – border payment system.

Blockchain – based cross – border payments

Did you know that blockchain technology has the potential to significantly reduce the cost and time of cross – border payments? According to a G20 initiative last year, enhancing cross – border payments was prioritized due to the benefits of a faster, cheaper, and more transparent system. Blockchain technology is emerging as a powerful solution to the problems of outdated financial infrastructure.

Technical process

Transaction Initiation

The first step in a blockchain – based cross – border payment is transaction initiation. When a sender wants to transfer funds across borders, they submit a transaction request to the blockchain – based payment system. This request includes details such as the recipient’s information, the amount to be transferred, and any additional notes. For example, a business in the United States sending payment to a supplier in China would initiate the transaction through the blockchain platform.
Pro Tip: Before initiating a transaction, ensure that all recipient details are accurate to avoid any delays or errors.

Utilising Blockchain Technology

Once the transaction is initiated, the blockchain – based system starts utilising blockchain technology. The proposed blockchain – based cross – border payment system in this context is built on a modular and scalable architecture designed to leverage the capabilities of Hyperledger Fabric and complementary technologies. Transactions are recorded on the blockchain as blocks, which are then linked together in a chain. This distributed ledger technology ensures transparency and immutability of transactions. As recommended by industry experts in blockchain technology, using a well – established blockchain framework like Hyperledger Fabric can enhance the efficiency and security of cross – border payments.
Actionable data – backed claim: A study by Franchina et al. showed that the blockchain distributed model can offer significant advantages in cross – border transactions compared to traditional systems.

Settlement and Currency Conversion (Optional)

In some cases, there may be a need for currency conversion during cross – border payments. The blockchain – based system can handle this process efficiently. Settlement occurs when the funds are transferred from the sender’s account to the recipient’s account. For instance, if a US – based customer is paying a European vendor in Euros, the blockchain system can convert the US dollars to Euros at the prevailing exchange rate and settle the transaction.
Pro Tip: Keep an eye on exchange rates when initiating cross – border transactions to get the best value for your money.

Comparison with SWIFT

Currently, banks hold approximately 25% of the global international remittance market, while fintechs and Money Transfer Operators (MTOs) have grown rapidly to command the remaining share. The SWIFT network has been the traditional choice for cross – border payments, but blockchain – based systems are emerging as strong alternatives. A comparative study between the SWIFT cross – border payment system and blockchain cross – border transaction model by Franchina et al. concluded that the blockchain distributed model has its own unique advantages.

Speed: Blockchain – based payments can be significantly faster than SWIFT payments. SWIFT payments often involve multiple intermediaries, which can cause delays. In contrast, blockchain eliminates the need for many intermediaries, resulting in faster transactions.
Cost: The cost of cross – border payments using blockchain can be lower. The ratio of costs stemming from systemic risks for blockchain – enabled transfers to the costs occurring at a SWIFT transfer due to the involvement of intermediaries determines the functionality of each system. Blockchain reduces the need for intermediaries, thus potentially lowering costs.
Transparency: Blockchain offers greater transparency as all transactions are recorded on a public ledger. SWIFT transactions are more opaque as they rely on a complex web of intermediaries.

Comparison	SWIFT	Blockchain – based
Speed	Slower due to multiple intermediaries	Faster with reduced intermediaries
Cost	Higher due to intermediary fees	Potentially lower with fewer intermediaries
Transparency	Less transparent	More transparent with a public ledger

Top – performing solutions include blockchain – based platforms that are integrated with existing financial systems for seamless cross – border payments.
Key Takeaways:

Blockchain – based cross – border payments offer speed, cost, and transparency advantages over SWIFT.
The technical process of blockchain – based payments involves transaction initiation, utilising blockchain technology, and optional settlement and currency conversion.
Banks currently hold a quarter of the global international remittance market, but blockchain – based systems are disrupting the status quo.
Try our cross – border payment calculator to estimate the costs and time for blockchain – based and SWIFT payments.

FAQ

What is a country – specific payment rail?

A country – specific payment rail is tailored to the domestic needs of a particular nation or region. Examples include SEPA for euro – denominated payments in 36 European countries, BACS in the UK, and BECS in Australia. Unlike SWIFT, these rails are limited in scope but offer faster and more cost – effective domestic transactions. Detailed in our [Alternatives to SWIFT – Country – specific payment rails] analysis.

How to choose a fintech provider for cross – border payments?

According to industry best practices, start by comparing exchange rates, fees, and transfer times. Look for providers with a good reputation and wide network of local bank connections. For instance, TransferWise (now Wise) is known for competitive rates. Consider your transaction volume and frequency. Detailed in our [Alternatives to SWIFT – Fintech providers] section.

SWIFT vs Blockchain: Which is better for cross – border payments?

Blockchain generally offers better speed, lower costs, and higher transparency compared to SWIFT. SWIFT payments are slower due to multiple intermediaries and have higher fees. Blockchain can settle transactions almost instantly and reduces the need for middlemen. However, SWIFT has an established network. Results may vary depending on specific business needs. Detailed in our [Comparison of SWIFT and alternatives] analysis.

Steps for implementing a blockchain – based cross – border payment system?

Assess your business’s cross – border payment volume and frequency.
Research different blockchain – based payment providers.
Compare their fees and features with your current SWIFT usage.
Pilot a small – scale transaction to test efficiency. Industry – standard approaches suggest these steps for a smooth transition. Detailed in our [Comparison of SWIFT and alternatives] section.