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Fedwire is instantaneous for US domestic transfers, whereas international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know. The Rippl

Fedwire is instantaneous for US domestic transfers, whereas international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know. The Ripple company offers solutions to replace SWIFT using XRP as the exchange currency.

JumpCrisscross 6y ago
> international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know International wires are a bit of a mess. But there are alternatives to SWIFT. Also, SWIFT is just a messaging protocol. The actual settlement is handled separately. This was Ripple’s original pitch, but it changed along the way.
- pas 6y ago
  Is there a precise overview/description somewhere about how international wire transfer actually works? If I want to send someone a few USD and I know their IBAN or SWIFT + name, address, what does my bank do? Is there a Visa/MC for wire transfer? (I know that SWIFT operates a network for banks, but then how do banks settle? Is the SWIFT message a legal claim?)
  - momothereal 6y ago
    Assuming you mean sending some USD from the US to an overseas recipient, it goes a bit like this: 1. Your bank sends a secure message to the overseas bank through the SWIFT network (this is where the SWIFT number is used for routing the message) to the recipient's bank, detailing the transaction. 2. Through the SWIFT standard message format, the overseas bank validates whether the account exists in their bank. Some additional screening is done at this stage to detect fraud, money laundering, etc. 3. Your bank and the overseas bank have a predefined agreement on a correspondent account, i.e. a bank account in the US owned by the overseas bank to receive USD. If everything checks out, your bank wires the money via a domestic system like Fedwire to settle the transaction. 4. The overseas bank confirms that the money was wired to their US account, and then adjusts the recipient's balance accordingly.
    - enos_feedler 6y ago
      Does this mean that banks participating in international transfer need to have bank accounts located in each of the countries they participate in exchanges with?
      - JumpCrisscross 6y ago
        > Does this mean that banks participating in international transfer need to have bank accounts located in each of the countries they participate in exchanges with? Or have accounts with banks that have accounts overseas, yes. For example, Fidelity piggybacks on JPMorgan for a lot of its overseas transfers.
    - pas 6y ago
      Thanks! Is there a routing system between SWIFT members based on who has settlement (nostro/vostro) accounts between each other?

JumpCrisscross 6y ago

> international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know International wires are a bit of a mess. But there are alternatives to SWIFT. Also, SWIFT is just a messaging protocol. The actual settlement is handled separately. This was Ripple’s original pitch, but it changed along the way.

pas 6y ago
Is there a precise overview/description somewhere about how international wire transfer actually works? If I want to send someone a few USD and I know their IBAN or SWIFT + name, address, what does my bank do? Is there a Visa/MC for wire transfer? (I know that SWIFT operates a network for banks, but then how do banks settle? Is the SWIFT message a legal claim?)
- momothereal 6y ago
  Assuming you mean sending some USD from the US to an overseas recipient, it goes a bit like this: 1. Your bank sends a secure message to the overseas bank through the SWIFT network (this is where the SWIFT number is used for routing the message) to the recipient's bank, detailing the transaction. 2. Through the SWIFT standard message format, the overseas bank validates whether the account exists in their bank. Some additional screening is done at this stage to detect fraud, money laundering, etc. 3. Your bank and the overseas bank have a predefined agreement on a correspondent account, i.e. a bank account in the US owned by the overseas bank to receive USD. If everything checks out, your bank wires the money via a domestic system like Fedwire to settle the transaction. 4. The overseas bank confirms that the money was wired to their US account, and then adjusts the recipient's balance accordingly.
  - enos_feedler 6y ago
    Does this mean that banks participating in international transfer need to have bank accounts located in each of the countries they participate in exchanges with?
    - JumpCrisscross 6y ago
      > Does this mean that banks participating in international transfer need to have bank accounts located in each of the countries they participate in exchanges with? Or have accounts with banks that have accounts overseas, yes. For example, Fidelity piggybacks on JPMorgan for a lot of its overseas transfers.
  - pas 6y ago
    Thanks! Is there a routing system between SWIFT members based on who has settlement (nostro/vostro) accounts between each other?