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Can I Recall a SWIFT Payment?

June 6, 2024June 13th, 2024No Comments

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 corresponding 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.

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

The SWIFT Network

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a network used by banks and financial institutions worldwide to securely and reliably send and receive information about financial transactions. The SWIFT network facilitates cross-border payments by ensuring that messages about transactions are transmitted in a standardised format.

Steps Involved in a SWIFT Payment Recall

The process begins when the sender or sending bank identifies that a payment needs to be recalled, which could be due to an error, fraud, or another reason necessitating the recall. The sender should then contact their bank or account manager to initiatate the recall request. This involves The sending bank contacting the receiving bank via a SWIFT message, typically an MT192 (Request for Cancellation) or MT199 (Free Format Message) to initiate the recall. This message includes details about the original payment and the reason for the recall.

Upon receiving the recall request, the receiving bank reviews the details to verify the legitimacy of the recall. This may involve checking their records to confirm the original payment and ensuring that the recall request is valid. 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 as banks typically require the beneficiary’s agreement to reverse the transaction, especially if the funds have already been withdrawn or used.

Once consent is obtained (or if the funds are still in transit and have not been credited), the receiving bank processes 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.

The entire process can take weeks, depending on the banks involved and the complexity of the situation.

Important Considerations

Time sensitivity is crucial in the recall process; 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 the beneficiary. While it provides a mechanism to correct errors or address issues such as fraud, it is not always guaranteed to be successful. Understanding the steps involved and acting quickly can significantly improve the chances of a successful recall, ensuring that funds are retrieved efficiently and securely.

Paying International Suppliers?

If you are making international payments Rutland FX can help you by reducing the cost of cross border payments, you can call us on 0203 026 0112 or request a callback to discuss your requirements.