What is SWIFT?
SWIFT stands for Society for World-wide Inter-bank Financial Telecommunications and is an international organization. It provides secure communications between Banks and its members. Membership to the society is regulated and only vetted applicants are permitted to use the system at varying access levels.
It ensures that banks can communicate with each other and provided validation and verification checks on their communications. It operates largely as a database of varying levels of communication and transmittance of financial documents and messages. Physical documents cannot be sent by SWIFT.
To be able to send and receive authenticated SWIFT messages one must be accepted and subscribed to the Society. Banks will have a trained SWIFT operator responsible for the management of SWIFT messages, both out-bound and in-bound. In smaller private banks, this may be one single individual, Larger banks will have SWIFT operator departments.
Each SWIFT message will have a Message Type (MT) depending on the database field. For Example, MT100 relates to cash transfers and the sending of the client funds between banks. MT700 relates to Documentary Credits and Guarantees.
In dealing Corporate Guarantees and Letter of Credits, one may hear the phrase of MT799.
This is SWIFT Message Type that Corporate Guarantee can communicate authenticated free format messages securely. Inter-communicating banks may use this Message Type on their SWIFT systems to communicate various types of messages and offer pre-advice of intended transactions. This Message Type is free format, allowing the Operator to type freely various different messages connected with MT700 communications. i.e., Guarantees or Letter of Credits.
It is important not to get caught up in inter-bank jargon and would advise that this phrase is not used when discussing Corporate Guarantees as it neither concerns the client nor the recipient. Its meaning is strictly inter-bank communication and nothing else.
This is also a SWIFT Message Type that Corporate Guarantees are sent and received by inter-communicating banks. When sending a Corporate Guarantee by SWIFT, the SWIFT Operator will enter the details of this Message Type relating to the specifics of the Guarantee.
It is only Guarantees and Letter of Credits that are sent with this Message Type 760.
This Message Type is for cash transfers specifically for cross border/International wire transfers. It serves as a valid proof of payment including all the payment details such as payment date, amount, currency, sender and recipient details.
All banks and financial institutions which make payments via SWIFT will have an MT103 for every payment they make, but they are unlikely to provide them to you.