Yes, you can recall a SWIFT payment, mistakes and issues can sometimes occur, leading to the need to recall a payment. A recall on a SWIFT payment is a process initiated to retrieve funds that were sent in error or for various other reasons. However, recalls are only performed on a ‘best endeavours’ basis, as they require the cooperation of correspondent and receiving banks, along with approval from the beneficiary. This article will explain how the recall process works, the steps involved, and important considerations for both the sender and the recipient.
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What is a SWIFT Payment Recall?
A SWIFT payment recall is a request made by the sending bank to retrieve funds that were sent through the SWIFT network. The reasons for recalling a payment can include:
- Incorrect beneficiary details
- Duplicate payments
- Fraudulent transactions
- Payment sent to the wrong account
Steps to Recall a SWIFT Payment
Recalling a SWIFT payment involves several coordinated actions between banks and, potentially, the payment beneficiary. Here’s a step-by-step guide to the recall process:
Determine why the payment needs to be recalled. Common reasons include incorrect beneficiary details, duplicate payments, or fraudulent transactions.
Reach out to your bank or account manager to initiate the recall request. Provide them with all necessary details about the original payment.
Your bank will send a SWIFT message to the receiving bank to start the recall process. This message is typically an MT192 (Request for Cancellation) or MT199 (Free Format Message) and includes details about the original payment and the reason for the recall.
Upon receiving the recall request, the receiving bank will review the details to verify the legitimacy of the recall. This involves checking their records to confirm the original payment.
If the funds have already been credited to the beneficiary’s account, the receiving bank will contact the beneficiary to seek consent for the recall. This step is crucial because the transaction can only be reversed if the beneficiary agrees to return the funds. If the funds have already been delivered, you will need to wait for the recipient to approve the recall.
Once consent is obtained, or if the funds are still in transit and have not been credited, the receiving bank will process the return of the funds to the sending bank. This is done through a new SWIFT message, such as an MT202 (General Financial Institution Transfer) or MT103 (Single Customer Credit Transfer).
The sending bank receives the funds and confirms the completion of the recall process to the sender. When this happens, you will usually be notified or see the funds credited to your account on your statement.
How Long Does a SWIFT Recall Take?
Important Considerations
Recalls are time sensitive; the quicker a recall request is made, the higher the chances of a successful recall. Delays can complicate the process, especially if the funds have already been utilised by the beneficiary. Additionally, both the sending and receiving banks may charge fees for processing a recall request, and these fees can vary based on the banks’ policies and the complexity of the transaction. Legal and compliance issues can also affect the recall process, as banks must adhere to regulatory requirements and ensure that recalls comply with relevant laws.
Recalling a SWIFT payment is a process that involves coordination between the sending and receiving banks and in some cases the beneficiary. While it provides a mechanism to correct errors or address issues such as fraud, it is not always guaranteed to be successful. Acting quickly is important, as recalls are completed more easily and quickly if the payment is still in transit. However, if the funds have already been applied to the recipient's account, the process may take longer and be more complex.
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