Society for Worldwide Interbank Financial Telecommunication (SWIFT)

International funds transfer operates differently from domestic large-value funds transfer. While the SWIFT operates as a messaging system, transmitting instructions to move funds, the domestic systems discussed above accomplish the actual funds movement.
SWIFT is an industry-owned cooperative, which supplies secure, standardized messaging services and interface software to 7,500 financial institutions in 199 countries. The SWIFT community includes a variety of financial services firms, including banks, broker/dealers, and investment managers, as well as their market infrastructures in payments, securities, treasury, and trade. The SWIFT core application is the FIN (Financial Transaction) application, which provides a store and forward financial messaging service accessed over X.25 network connections.X.25 is the software that SWIFT provides to its users for access capability to SWIFT's core FIN application. The system now uses bilateral key security and provides message validation to ensure messages are formatted according to SWIFT standards.

SWIFT messages may be used to transmit payment instructions for both domestic and international financial transactions. Financial institutions generating a high volume of funds transfer activity typically establish direct SWIFT connectivity with their internal, intrabank funds transfer system. The SWIFT network controls the integrity of the messages once properly entered at the point of origination. Thus there is no requirement for the receiver to re-verify payment orders. As a result, payment instructions pass through the system without human intervention unless programmed conditions (e.g., overdraft limit excesses) or error messages occur.

In 2002, SWIFT began migrating its core FIN application from an X.25 network to SWIFTNet, an IP-based network using the Secure Internet Protocol Network (SIPN). The introduction of IP-based technologies, that uses both bilateral keys and public keys, will allow SWIFT to expand its services. Payment-related business solutions currently being developed include cash reporting, bulk payments processing, and securities reporting. To promote the use of SWIFTNet and XML (Extensible Markup Language) based cash reporting tools among major cash clearing institutions and their correspondents, a working group has been set up to design the industry solution, including query/response standards and a rule book. In bulk payments, SWIFT developed a new XML-based message standard that was introduced in 2002.


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Telex-based Messaging Systems