Currently, the time loss during a SWIFT transaction to transfer money between countries is so long and obviously damages the business. The time loss causes results in many problems. Sometimes the time loss is so long that it can exceed the time that would have passed while physically transferring the money from one country to another.
When holidays, weekends, national days, working hours, time zone differences, and suddenly coming-up issues in financial corporations (transaction limitation per day, reaching the quota of foreign currency, announcement of bankruptcy etc.) are considered; SWIFT can result in the exploitation of factors of production and business. Being this sensitive to all these factors turns trade into a vulnerable entity.
At the age of technology, the mobility of SMEs (small merchant entrepreneurs) is taken away by high transactions alongside with the capital pledges in the SWIFT system; at times that SMEs need the money the most! Entrepreneurs from less developed countries are the least solid actors in this competitive market and SWIFT procedure wipes out these entrepreneurs from the system and eventually, from the sector.
SWIFT is unpractical in two ways. First, instructions and the data entry are done manually and second, data storage can be problematic, considering that most of the transaction volumes are high. Therefore, there is an increasing need for message creation, processing and transmission in SWIFT to be automatized. The graphic below demonstrates the financial intermediaries that must be confronted in order to apply SWIFT. Problems that have been mentioned above occur at each of these steps.
In conclusion, there is one question left unanswered: “To SWIFT or not to SWIFT?” The decision is yours.
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