What Are SWIFT Charges?

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What Are SWIFT Charges? A Guide for International Transactions


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When sending money abroad, especially for students, you might encounter the term “SWIFT charges.” If you’re not sure what they are or how they impact your international payments, this guide will help explain it.

What Are SWIFT Charges?


SWIFT charges are fees associated with sending and receiving money internationally via the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network. The SWIFT network is the most commonly used system for secure, standardized financial messaging between banks worldwide, enabling cross-border transactions

Let’s say you’re a college student in India, and you need to send ₹50,000 to a friend studying in the US to help cover their rent. You go to your bank to transfer the money. Since your bank doesn’t have a direct connection with your friend’s bank in the US, the transfer has to pass through several banks, known as intermediaries.

  1. You send ₹50,000 from your Indian bank. Your bank initiates the transfer, but it doesn’t have a direct connection with the US bank.
  2. Intermediary banks get involved: The money gets passed to an intermediary bank, which then passes it to another bank in the US before finally reaching your friend’s bank.
  3. Each of these banks and the SWIFT network charges a fee for handling the transaction.

Types of SWIFT Charges


There are typically three types of SWIFT charges:

  1. OUR: You, as the sender, bear all the costs. The recipient will receive the full amount without any deductions.
  2. SHA: Both the sender and the recipient share the costs. The recipient receives the transferred amount after deducting their portion of the fees.
  3. BEN: The recipient bears all the costs, meaning the fees are deducted from the amount received.

How to Avoid SWIFT Charges


While SWIFT charges are difficult to avoid entirely, you can minimize or even eliminate them by using the following strategies:

  • Ask for a Reduction: Contact your bank and ask if they can reduce or waive SWIFT charges, especially if you’re a frequent user or have a premium account.
  • Use Niyo for International Transfers:
    Niyo offers a smart alternative to avoid excessive charges:
    • Zero SWIFT Fees: Niyo reverses SWIFT fees into Niyo Coins, allowing you to save on international transfers.
    • Zero Platform Fee: You won’t pay any platform fees when using Niyo, making it even more cost-effective.
    • Fast Transfers: Transactions are completed within 72 hours, ensuring your funds arrive quickly.
    • Multi-Currency Convenience: Hold and spend in multiple currencies without worrying about fluctuating exchange rates or hidden fees, perfect for international students and frequent travelers.

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Conclusion


SWIFT charges can quickly add up when you’re making frequent international payments. Understanding how they work and the types of fees involved can help you plan better and reduce unnecessary costs.

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