But that was slow and cumbersome, and not secure. The platform is on pace to process more than 10 billion messages this year, facilitating trillions of dollars in cross-border payments.īefore SWIFT, when banks wanted to communicate financial information from one place to another, they used a 'telex' system, based on old telegraph circuits. Some 11,000 financial institutions located in more than 200 countries and territories use SWIFT. SWIFT's use of standardized codes for instructions enables banks to process payments quickly. Then, when the funds electronically arrive, they will be available for the Russian company to withdraw. The German firm then sends a message from its German account, via SWIFT, to the Russian bank saying a money transfer is incoming. It can transfer money from its German bank account to the Russian firm's Russian bank by entering the recipient's account number and the SWIFT code. Say a German company is buying Russian natural gas, so it needs to pay for it. However, it does not actually move or hold money and securities. SWIFT is a secure communications platform used by banks, brokerages, and other financial institutions to send and receive information, such as instructions for transferring money overseas or settling securities trades.

While analysts agree such a move would cause economic pain for Russia, some say the impact of cutting the country off from SWIFT is overhyped, for various reasons.

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