The following reasons explain why a SWIFT fee may be charged:

• Transaction Processing Costs: 

  • Processing a payment through the SWIFT network, or wire more generally, is expensive to OFX than other payment means. For example, processing a local USD wire in the US can be 10 times more expensive than the same payment being made through ACH.

  • This is because of several factors:

    • The structure of the instruction: SWIFT and wire payments are usually more data-rich than normal local payments like ACH, EFT or DE. The references have more character allowance and the parties involved in processing the payment are more transparent. It also contains information that enable the necessary Compliance reporting and screening to be conducted more readily.

    • International SWIFT payments attract a higher Compliance cost: International incoming and outgoing payments are more highly regulated than local payments and therefore place a higher overhead to OFX and its partner banks to process.

    • More features: SWIFT participants are charged by SWIFT an on going minimum fee for features such as real-time payment tracking, secured messaging and counterparty due diligence. This cost is included within the payment fee.

• Minimum Fee Structure: Typically, OFX charges a minimum fee (equivalent to AUD10) for using the SWIFT network, regardless of the amount being transferred.

• Intermediary Bank Fees: If the payment involves intermediary banks, additional fees may be deducted from the payment value, resulting in the beneficiary receiving less than the amount sent. These fees are usually bilaterally agreed between banks making the deducted amount opaque prior to a payment being made.

• Currency Conversion Fees: If the transaction involves converting currencies, a margin is applied by the bank doing the FX.

• Receiving Bank Charges: The beneficiary bank may also charge a fee to receive a SWIFT or wire payment. Before making an international or wire payment, it is prudent for a client to get their payee to check with their bank if any incoming SWIFT or wire fees are expected.

Why is this page important? Understanding the reasons for SWIFT fees helps customers anticipate costs associated with international payments and make informed decisions regarding their payment methods.

Next Steps: To address concerns about SWIFT fees:

1. Review the details of your recent SWIFT transaction, including any breakdown of fees provided by your bank.

2. Contact your bank or financial institution for clarification on specific charges related to your transaction.

3. Consider alternative payment methods if SWIFT fees are a concern for future transactions.