What is SWIFT?
SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication, a cooperative based in Belgium that runs a secure messaging network for banks. SWIFT does not hold or move money itself. It carries the standardised messages that tell banks to debit one account and credit another, and the banks settle the funds between themselves, often through correspondent accounts. When a foreign client says they have "sent a wire", the instruction almost always travelled over SWIFT.
Why it matters for exporters
If you are paid by direct bank transfer from abroad, the payment reaches your Indian bank through SWIFT. Your client's bank needs your bank's SWIFT code (also called a BIC), your account number and name, and sometimes an intermediary bank's details. A wrong code or a missing beneficiary detail can delay the payment or send it back. Each bank in the chain may also take a fee, which is why the amount received can be less than the invoice value.
The SWIFT message for a customer payment, usually an MT103 or its newer equivalent, is useful evidence. It shows who paid, how much, and what charges were deducted, which helps when you match the payment to an EDF row or chase a short receipt. Put your bank's SWIFT details on every export invoice so clients have them in one place.
Example
Neon Labs Pvt Ltd invoices a Canadian client USD 8,000. The client's bank sends a SWIFT message through a US correspondent bank to Neon's AD bank in Mumbai. USD 7,975 arrives after a USD 25 transit charge, and the bank credits ₹6,98,000 with a FIRA. Neon notes the charge when closing the entry.
Common confusion
SWIFT is not a currency or a payment app; it is the messaging layer behind traditional wires. Read SWIFT MT103 explained to understand the message itself.