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A Guide to SWIFT MT103 Transfers

Understanding the process, risks, timeframes, and fees of customer-to-customer payments using the global standard for cross-border transactions.

hub What is a SWIFT MT103 Transfer?

publicThe SWIFT Network

The SWIFT network is a secure messaging platform used by over 11,000 financial institutions worldwide. It doesn't move money itself, but sends payment orders between banks using standardized messages.

descriptionThe MT103 Message

The MT103 is the specific message format for a single customer credit transfer. It contains all the necessary information for the payment, including:

• Sender and receiver bank details
• Beneficiary account information
• Payment amount and currency

sync_altHow it Works: Serial Method

When banks don't have a direct relationship, the MT103 message is passed through a chain of one or more "intermediary" banks. Both the payment information and settlement instructions travel together through this chain until it reaches the final destination.

upgradeThe Future: ISO 20022 (MX)

SWIFT is migrating to a new, richer data standard called ISO 20022. The MT103's equivalent is the 'pacs.008' message. This new format allows for more detailed and structured data, improving automation and compliance. Both systems will coexist until November 2025.

warning Risks Involved

policyCompliance & Missing Info

In the serial method, if information is missing in the MT103, it's usually obvious to all banks in the chain. This is seen as safer for AML/CFT (Anti-Money Laundering) checks, as it prevents messages with incomplete data from being processed unknowingly.

build_circleOperational Risk

Complex payment chains with multiple banks and systems rely heavily on manual checks and reconciliations. Any error in this process can lead to delays or failed payments, creating operational risk and cost.

manage_searchDifficult Investigations

It's hard for a single bank to see the entire route of a transaction across many intermediaries. This complexity makes investigating fraud or suspicious activity, especially with instant cross-border payments, very challenging.

trending_downDownside Risk Only

In payments, things can only go wrong. A payment that fails to execute on time and efficiently can damage reputations, business relationships, and even impact financial systems if the failure is significant.

hourglass_top Why is it Time-Consuming?

edit_documentManual Processes

A major cause of delays is the lack of technical integration between banks, leading to manual data entry, reviews of legal requirements, and other hands-on processes that slow everything down.

person_searchKYC Due Diligence

Know Your Customer (KYC) checks are incredibly complex and time-intensive. Vetting a customer can take over a month because each correspondent bank may have different information requirements that need to be met.

updateSettlement Delays

Traditional cross-border payments can take up to two business days (T+2) to settle. This timeframe can be extended when multiple intermediary banks are involved in the payment chain.

payments Applicable Fees

account_balance_walletIntermediary Deductions

In the serial MT103 method, it's common for each intermediary bank in the chain to deduct a fee from the payment amount. This means the beneficiary often receives less than the original amount sent.

price_checkHigh Costs

Cross-border payments can cost up to 20 times more than domestic ones. Costs include transaction fees, compliance, FX conversion, and more. Urgent payments or low-volume clients typically face higher fees.

currency_exchangeFX Markup

Even if a direct fee isn't charged for a foreign exchange (FX) payment, providers earn money from the "bid-offer spread" — the difference between the buying and selling price of the currencies involved.

receipt_longCharging Conventions

The sender can specify who pays the fees using one of three codes:

BEN (Beneficiary): The receiver pays all fees.

SHA (Shared): The sender and receiver each pay their own bank's fees. This is often the default.

OUR: The sender pays all fees to ensure the beneficiary receives the full amount.