Receiving international (non-EU) payments - BIC, SWIFT, correspondent bank etc

firsttimestudent

Hi,

Just interested to know more about receiving international payments from non-EU countries.

I've looked up the SWIFT website, and it seems that most of the UK banks are connected to SWIFT.

Say if someone were to send a payment to me from abroad, will the payer's bank pay directly to my bank; or will they go through their bank's choice of Correspondent Bank, before the Correspondent Bank transfers it to my bank?

Reason is that having looked up details, it seems that some banks are cheaper in receiving international payments (e.g. Abbey and Nationwide, which specifically says no fees when receiving SWIFT payments). Compare that to banks like Natwest or Lloyds which levy £7 per payment.

However, I know that if the payments get routed through a correspondent bank, the benefits that I can reap from Abbey and Nationwide will be gone, as these correspondent banks will levy a charge - and foreign banks will be more likely to have links with RBS or Lloyds or HSBC than with Abbey or Nationwide!

So, has anyone worked in this area, who has some insight into this? Thanks!

Olipro

all international payments are routed via SWIFT unless the foreign bank is owned by/owner of your UK bank. the sending bank will almost always charge a fee for the service, Abbey may well also apply a currency conversion spread which they profit from, Nationwide do not and you will get the interbank rate.

System

The SWIFT organisation provides a means for banks to send each other secure messages in a standard format. In addition, the banks need a means of making actual payments to each other. They do this by having accounts with each other. As the OP says, in practice every bank in (say) Paraguay is not going to have reciprocal accounts with every bank in the UK. Therefore a sending bank in Paraguay may have reciprocal accounts with a another bank in Paraguay which has reciprocal accounts with another bank in the UK which has reciprocal accounts with the OP's bank in the UK. All these banks may, and usually do, take a cut for their trouble. However, as Olipro says, Nationwide does not (currently) charge for incoming SWIFT payments sent via HSBC. The bank(s) sending the funds may charge the sender, or charge the recipient by taking a cut from the funds as they pass. In theory, the sending bank should tell the sender what these charges will be.

firsttimestudent

Thanks a lot!

I guess my main question now is, is there a way to 'force' the sending bank to pay using a particular routing.

For example, paying from Singapore to the UK, in GBP (i.e. converted at source):

Is the bank in Singapore, for example, at completely liberty in whichever bank they want to choose?

Is it going to be, Singapore Bank >> HSBC (intermediary for Nationwide)>> Nationwide

Or can they do anything like Singapore Bank >> Any bank >> HSBC >> Nationwide?

I know I'll save a lot with the 1st one... but if they were to route it, with each one taking a cut along the route, that's what I'm concerned about!

Thanks for any advice.

System

I guess, but don't know for sure, that most or all banks in Singapore have direct arrangements with HSBC UK. After all, the former HongKong and Shanghai Banking Corporation is big in the far east!

If poss, ask the sender to verify what the sender's bank will charge to make (a) 1000 (or whatever) Singapore dollars; or (b) 1000 (or whatever) GBP arrive at HSBC UK for the credit of your Nationwide account. Or check out fees for international transfers at the sender's bank's website?

Olipro

firsttimestudent wrote: »

Thanks a lot!

I guess my main question now is, is there a way to 'force' the sending bank to pay using a particular routing.

For example, paying from Singapore to the UK, in GBP (i.e. converted at source):

Is the bank in Singapore, for example, at completely liberty in whichever bank they want to choose?

Is it going to be, Singapore Bank >> HSBC (intermediary for Nationwide)>> Nationwide

Or can they do anything like Singapore Bank >> Any bank >> HSBC >> Nationwide?

I know I'll save a lot with the 1st one... but if they were to route it, with each one taking a cut along the route, that's what I'm concerned about!

Thanks for any advice.

the routing depends entirely on the BIC number you give, the sending bank route it to SWIFT who in turn route it to the appropriate bank based on BIC or SWIFT Intermediary number - the Nationwide BIC is an "unconnected" BIC which means it's not part of the live system, as a result the SWIFT Intermediary is obviously used for routing, it will never see any bank unless the sending bank also uses an intermediary.

As for what you send, that's entirely arbitrary, you can send any currency you like, whether it's a good idea depends entirely on what rate you would get from the sending bank, as a rule of thumb though, it's generally always better to send the currency as-is without converting since Nationwide always give spot rate.

firsttimestudent

Thanks, that was really helpful.

I was quite shocked as I was sent £500.00 (converted at source), to my Nationwide account. However, I only received £488.00.

Why did this happen, and what do you think can be done for both this transaction and also future?

I know previously when I receive from Natwest, it was only £7 deducted.

Quite disappointed, as my reason for looking up Nationwide was to reduce the costs, but instead, it has actually increased it!

Any ideas? Thanks!

Olipro

when someone sends a transaction by SWIFT they have 3 options:

1) sender pays no fees and all fees are deducted from the total amount to be sent (beneficiary pays)
2) sender pays sending fee and beneficiary pays any fee levied by their own bank for receiving
3) sender pays all fees.

I would bet on it that the sender picked option 1.

bengalknights

firsttimestudent wrote: »

Thanks a lot!

I guess my main question now is, is there a way to 'force' the sending bank to pay using a particular routing.

For example, paying from Singapore to the UK, in GBP (i.e. converted at source):

Is the bank in Singapore, for example, at completely liberty in whichever bank they want to choose?

Is it going to be, Singapore Bank >> HSBC (intermediary for Nationwide)>> Nationwide

Or can they do anything like Singapore Bank >> Any bank >> HSBC >> Nationwide?

I know I'll save a lot with the 1st one... but if they were to route it, with each one taking a cut along the route, that's what I'm concerned about!

Thanks for any advice.

in this case i would have thought it would be singapore bank-Standard Chartered-Nationwide as most of asia is there territory and they have active links with all uk banks

firsttimestudent

Olipro wrote: »

when someone sends a transaction by SWIFT they have 3 options:

1) sender pays no fees and all fees are deducted from the total amount to be sent (beneficiary pays)
2) sender pays sending fee and beneficiary pays any fee levied by their own bank for receiving
3) sender pays all fees.

I would bet on it that the sender picked option 1.

Thanks.

I'm very sure 'he' chose no. 2, as the 'he' was me actually! The sending fee (cable + commission in Singapore) has been borne by my Singapore account.

Hence why I'm quite unhappy seeing the much reduced amount I receive!

Olipro

Nationwide clearly state that they do not charge for incoming SWIFT transfers on this page: http://www.nationwide.co.uk/search/DisplayArticle.aspx?article=1572

I suggest you phone them up and get an explanation from them as to how and why you were docked £12 - best time to do so is before 4pm as I believe the SWIFT team all go home by that time.