Local Transfers vs SWIFT

Cost discrepancies between local transfers and SWIFT

SWIFT transactions involve transferring funds through a network of intermediary banks (up to 3) and a transaction and/or service fee is paid by each of those intermediaries. The intermediary banks often decide exchange rates of their own over which the sender has no power. Because of the uncertain nature of the payments and FX margins involved, it is not possible to guarantee the final amount to be paid by the recipient.

Therefore, SWIFT transfers appear to be more costly and we suggest that they be initiated only when elaborate documentation is required and costs are not taken into account. When moving large amounts of money that might not be covered by local networks, SWIFT is also very useful.

On the other hand, local transactions use a network of bank accounts across the globe - with local currencies. In the end, this process cuts out intermediary banks, saving clients numerous transfer fees and unfair exchange rates dictated by the bank.

Local channels are almost always cheaper than SWIFT channels. They cost very little (almost like a local transfer) for transmitters. They are also typically free for receivers of any receiving bank charges and beneficiaries receive their funds in full.

That said, in certain instances, local channels may be limited to the currencies sponsored by the remittance provider's network. They can even have a cap on the sum that can be paid out at one time.

If the option is open, we suggest using local transfers, as the comparative overall cost differences can be enormous, in particular in the case of regular foreign payments.