SWIFT vs. Local Transfers

3 min read

Many Asian SMBs typically rely on SWIFT wire transfers to manage their international transactions. They’re often unaware of other methods that are just as quick (if not quicker) and reliable as SWIFT, and also more affordable. In this article, we compare the two options, and scenarios in which each is more relevant.

What is  SWIFT ?

SWIFT is a secure, electronic global payment and settlement system i.e. the SWIFT International Payment network. A SWIFT wire transfer is executed by the payer’s bank debiting their account, and is routed through a series of intermediary banks in the SWIFT network and ends with the recipient’s bank crediting their account. This method of transfer, also typically called a wire transfer, is the largest financial messaging system in the world.

What are Local Transfers ?

Local transfers are powered by RTGS and other electronic local payments systems.The customer uses a domestic transfer to send funds to the remittance providers local bank account in the sending currency. The remittance provider does the FX conversion through its network and pays the converted amount at a pre-agreed rate in the destination currency.  

Traditionally, SWIFT transfers were heavily used for transferring money overseas, however local transfers are now picking up due to the significant advantages they offer to end customers. Wallex’s cross-border platform supports both types of payments for customers with differing needs.  

Cost Differences between SWIFT and Local Transfers

SWIFT transfers involve routing the funds through a network of intermediary banks (up to 3)  and each of those intermediaries charge a transaction and/or service fee. The intermediary banks also determine their own exchange rates over which the sender has no control. Due to the unpredictable nature of the fees and FX margins involved, the final amount to be received by the beneficiary can not be promised.

SWIFT transfers thus tend to be more expensive and we recommend that they are initiated only when elaborate documentation is required and cost is not a consideration. SWIFT is also very useful when transferring large sums of money which may not be supported by local channels.

Local transfers on the other hand use a network of bank accounts all over the world - with local currencies. This process cuts out intermediary banks in the process, saving customers multiple transfer fees and unreasonable bank determined exchange rates.

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

They are also getting much faster , especially with Wallex , as we are continuously strengthening our payments network and offer even near real time transfers through them.

Having said that, in some cases local channels can be restricted in the currencies supported by the network of the remittance provider. They may also have a limit of the amount one can pay out at a time.

We recommend using local transfers, if the option is available, as the comparative total cost differences can be massive especially in case of frequent international payments. These savings add up over time, and ultimately improve cash flows, revenues and profits.

SWIFT Transfers vs Local Transfers: Details Required and Common Mistakes

Information needed for international wire transfers

  1. Recipient’s:
  • Full name and address
  • Account number and account type

2. Recipient’s bank:

  • Name and address
  • Routing number
  • SWIFT or BIC code
  • IBAN (if applicable)

3. Currency

4. Transfer amount

5. Reason for transfer

Most countries and banks have a unique SWIFT or BIC code, and it’s essential to provide it. Many European countries also use IBAN codes, so payments to these countries must also include this information.

Information needed for local transfer channel

  1. Recipient’s:
  • Full name and address
  • Local bank account number

2. Recipient country’s local routing number if applicable (e.g. IFSC code in India, BSB code in Australia etc.)

Common errors with international transfers:

  • Incorrect city or country names
  • List bank name without address
  • Incorrect SWIFT or IBAN codes
  • Mismatch in account name and account number

Such errors can lead to processing delays or the wrong recipient receiving funds. Wire transfers are irrevocable, so it’s critical to provide correct information.


Eventually both methods keep your money secure and are supported on our platform. Wallex uses an intelligent routing system that deploys SWIFT or Local transfers depending on a combination of factors like urgency of transaction, amount, currency corridor amongst many others.

You've successfully subscribed to Wallex Blog
Great! Next, complete checkout to get full access to all premium content.
Error! Could not sign up. invalid link.
Welcome back! You've successfully signed in.
Error! Could not sign in. Please try again.
Success! Your account is fully activated, you now have access to all content.
Error! Stripe checkout failed.
Success! Your billing info is updated.
Error! Billing info update failed.