

Why does SWIFT messages cost money? - JoelJacobson

The SWIFT network is essentially the same thing as the Internet. It allows you to send messages from a BIC to another BIC. The BICs are like IP-addresses.<p>But sending messages over the SWIFT network is extremely expensive, a million times as expensive as The Internet. Why?<p>I cannot see why banks and financial institutions insist on using SWIFT, when they might as well use the Internet, and use public-key cryptography to verify and proove the validity of exchange messages.<p>It&#x27;s just plain stupid.
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pkinsky
Because if SWIFT were replaced with a decentralized system the US wouldn't be
able to exert control via embargo.

(an example: [http://www.ianwelsh.net/have-sanction-threats-brought-
russia...](http://www.ianwelsh.net/have-sanction-threats-brought-russia-to-
heel/))

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mamaki
Not as much stupid as opportunistic and complacent/lazy... Why would a
financial institution invest on something that would bring smaller profit
margins than keeping everything as is ? Making money has a much higher
priority than providing optimal customer service and as such until competition
forces said institutions to adapt they have no incentive to change to a less
profitable model...

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JoelJacobson
Actually, the SWIFT fees is a big deal for many banks.

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munimkazia
A lot of the technology that is used in financial network is there due to
legacy/stability reasons. It is important to keep this in mind when talking
about these types of industries.

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fuj
> It's just plain stupid

Typical HN "hacker" who has no idea how the real world works.

I also cannot see why wouldn't ALL banks in the WORLD change their established
and heavily tested communications protocol that works, with another protocol.
I'm also sure that change would cost a few bucks only, so.. why don't they do
it?!

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JoelJacobson
I'm not suggesting they would change the protocol, the can with benefit
continue to use MT-files, but the communication _channel_ could easily be
replaced with The Internet (which is quite heavily tested), instead of the
SWIFT network.

