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Receiving International Money Transfers: Behind the Scenes

By Gianvito Grieco

International trade has seen significant growth over the last 20 years. According to data from The World Bank, international trade as a percentage of global GDP has increased from 44.2 percent in 1995 to 57.7 percent in 2015, despite volatile swings since the 2008 financial crisis.1 This continues a decades-long trend going back at least to 25 percent in 1960, when the World Bank started keeping records. New electronic payment and delivery systems and improved Internet access are among the many developments that have reduced costs and supported an increase in globalisation during the last 20 years. In other words, as national economies continue to open up, businesses are more commonly buying and selling goods and services from overseas suppliers. As a result, the need for sending and receiving international money transfers has increased steadily.

Money transfers are commonly used to send and receive money internationally. While the process is relatively simple for senders and recipients, international money transfers are more complicated for the banks involved because they rely on a series of correspondent banking relationships between banks in different countries.


How to Receive International Money Transfers

In order to receive international money transfers, recipients provide their bank account information to the business that is sending the payment, along with specific money transfer information obtained from their bank.2 The information may include the recipient’s International Bank Account Number (IBAN), which is used in most countries to identify bank accounts across borders.3 The information provided by the bank will also include a SWIFT/BIC code.


SWIFT, the Society for Worldwide Interbank Financial Telecommunications, is the worldwide financial messaging network that enables international money transfers between banks by securely transmitting payment instructions and other information.4 The SWIFT/BIC code is a unique code used to identify the financial institution. Banks will also provide their full name and address, the beneficiary (i.e., recipient’s) account number and name. Directions may vary depending on the bank’s practice for receiving international money transfers.


How Funds Are Transferred


If a transfer is made between two accounts in the same bank, the money is simply moved through a “book transfer” or accounting change that debits one account and credits the other. If the transfer is made between accounts in different banks, there is still the possibility of using a book transfer if the two banks have a correspondent banking relationship.


A correspondent banking relationship involves one bank maintaining an account at another bank for the purposes of settling money transfers. Correspondent relationships are usually two-way relationships, but not always. How costs, balances and foreign-exchange transactions are handled is based on a negotiated arrangement between the two banks. If the two banks do not have a correspondent relationship, the transfer goes through a third-party payments system, such as Australia’s Real-Time Gross Settlement (RTGS). ASX’s Clearing House Electronic Subregister System (CHESS)


SWIFT may also be used to provide instructions for an international money transfer. SWIFT is not an electronic funds transfer system. Rather, SWIFT is an international cooperative communications service. Australian banks and their respective subsidiaries of foreign banks use SWIFT codes to send and receive transfer instructions. SWIFT is also used to carry messages regarding foreign exchange and money markets, securities and trade financing.


Tips on Receiving an International Money Transfer Safely


It’s important to be careful when receiving an international money transfer because the transaction is typically irrevocable. Therefore, recipients and senders should always be sure that the required wire information is correct.


Both parties should also be vigilant about money transfer fraud. Scams have affected businesses in many countries, often targeting companies with international dealings.5,6 Businesses are urged to know the habits of their customers and suppliers, including the “details of, reasons behind, and amount of payments.” The Australian government urges businesses to refuse offers from unknown parties to accept a money transfer and then send any of that money to someone else, possibly internationally, because of the likelihood that it is a scam.



Globalisation has increased the prevalence of cross-border transactions and the need to make payments internationally. Receiving international money transfers is generally a fast and convenient way to obtain funds in overseas business transactions. Recipients and senders who know how international money transfers work, behind the scenes, can take the necessary precautions to ensure that money transfers are successful and safe.

Gianvito Grieco - The Author

The Author

Gianvito Grieco

Gianvito Grieco has served in a variety of roles in investment banking, financial services, and law. Gianvito holds a Bachelor of Science in Finance from the University of Florida, and a Juris Doctor from Stetson University College of Law. He is also fluent in English, Italian, and Spanish.


1. “Trade (% of GDP)”, The World Bank;
2. “Bank Wire Transfer Basics”, The Balance;
3. “International Bank Account Number”, Wikipedia;
4. “Society for Worldwide Interbank Financial Telecommunications – SWIFT”, Investopedia;
5. “Beware 'CEO fraud' costing British businesses millions: Workers warned to watch out for bogus requests from bosses to transfer money as one firm loses £18.5m”, This is Money;
6. “Stop! Did your executive really request that wire transfer?,” PwC,
7. “Business Email Compromise Public Service Announcement”, Federal Bureau of Investigation;



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