The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the core of global financial messaging, enabling secure and standardized communication between financial institutions worldwide. For Electronic Money Institutions (EMIs) in Europe, SWIFT membership is detrimental for a customer centric frictionless payment flow, reconciliation and proper e-money issuance and facilitating cross-border payments properly.
While an EMI can become a direct member of SWIFT, it cannot independently clear SWIFT transactions without a correspondent banking partner. This creates a significant challenge for many FinTech companies and digital banks that struggle to create correspondence banking relationships thus creating a seamless international payment processing.
In this article, we will explore:
- The role of SWIFT for European EMIs
- How EMIs can connect to SWIFT
- Why correspondent banking is essential for clearing SWIFT payments
- How Obtained.com can help bridge the gap
What is SWIFT and Why is it Essential for EMIs?
SWIFT is a global financial messaging network that connects over 11,000 financial institutions in 200+ countries. It provides a secure and standardized way for banks, EMIs, and payment service providers to exchange financial messages, including cross-border payment instructions, trade confirmations, and compliance reporting.
For European EMIs, SWIFT connectivity is a game-changer because it:
✔️ Enables access to global banking networks
✔️ Ensures compliance with international payment standards
✔️ Improves security and transparency in transactions
✔️ Allows multi-currency transaction capabilities
However, SWIFT does not process or settle payments itself—it only facilitates secure communication between financial institutions (you can learn more about SWIFT MT103 by reading this article)
Can an EMI Be a Direct SWIFT Member?
Yes. Electronic Money Institutions (EMIs) can apply for direct SWIFT membership to send and receive SWIFT messages. This allows them to:
✔️ Obtain a unique SWIFT Business Identifier Code (BIC)
✔️ Exchange financial messages with global banks and payment processors
✔️ Automate financial messaging and reconciliation processes
However, direct SWIFT membership alone is not enough to process payments. A financial institution (FI) cannot independently clear SWIFT transactions because it does not hold a banking license or direct access to RTGS (Real Time Gross Settlement) such as TARGET2, SEPA, or Fedwire (in some cases EMIs, especially in Europe can gain access to SEPA).
The Role of Correspondent Banks in SWIFT Transactions
Since EMIs cannot clear SWIFT transactions on their own, they must rely on correspondent banks to complete payment settlements. Here’s how the process works:
1️⃣ The EMI initiates a SWIFT payment message
2️⃣ The message is sent via SWIFT to a correspondent bank
3️⃣ The correspondent bank clears and settles the transaction on behalf of the EMI
4️⃣ The funds are credited to the recipient’s bank account
Key Challenges EMIs Face Without a Correspondent Bank:
- Limited ability to send/receive SWIFT transactions
- Delays in cross-border payment processing
- Dependence on third-party payment service providers
- Difficulty in obtaining multi-currency payment capabilities
✔️ This is where Obtained.com can help—by bridging the gap between EMIs and global SWIFT connectivity.
How Obtained.com Helps EMIs Connect to SWIFT & Correspondent Banking
Direct SWIFT Membership Assistance
- Guidance on obtaining a SWIFT BIC and membership registration
- Integration of SWIFT messaging infrastructure (MT & ISO 20022 formats)
- Compliance and risk management for SWIFT transactions
Correspondent Banking Partnerships
- Connecting EMIs with Tier-1 and Tier-2 correspondent banks
- Multi-currency transaction clearing (EUR, USD, GBP, CHF, etc.)
- Support in accessing TARGET2, SEPA, and international clearing networks
Multi-Currency Payment Solutions
- Enabling EMIs to send/receive payments in multiple currencies via SWIFT
- Optimizing FX and cross-border payment processing
Regulatory Compliance & SWIFT Security
- Ensuring compliance with AML/KYC requirements for SWIFT transactions
- Implementing security measures for SWIFT fraud prevention
Final Thoughts: Why SWIFT Connectivity is Key for EMIs
As FinTech companies and EMIs continue to disrupt the financial industry, connecting to SWIFT and establishing correspondent banking partnerships is essential for long-term success.
Is your EMI ready to expand into global payments?
Let Obtained.com help you secure SWIFT connectivity, correspondent banking, and multi-currency transaction capabilities.
📩 Book a meeting with us today for a consultation!
