What is SWIFT?

SWIFT (Society for Worldwide Interbank Financial Telecommunications) is a collective that operates the world's most used global messaging system specifically for financial transactions and payments. SWIFT doesn't actually move any money (it does not perform clearing or settlement), but provides the infrastructure for banks to communicate with each other cross-border.

There are over 11,000 banks in over 200 countries on the network. About 42 million messages get sent on SWIFT every day. Roughly half of all high-value cross-border payments happen via SWIFT.

SWIFT isn't the only way that banks communicate cross-border. China has its own system, CIPS. India has SFMS. Russia even has their own in-house system, SPFS, which they started building when the US threatened to disconnect Russia from SWIFT in response to their actions in Crimea.

Network effects are extremely powerful, which is why these systems haven't fundamentally challenged SWIFT. But network effects also exponentially dissipate in value when members leave the network.