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Why does SWIFT messages cost money?

5 points by JoelJacobson ↗ HN
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.

But sending messages over the SWIFT network is extremely expensive, a million times as expensive as The Internet. Why?

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.

It's just plain stupid.

6 comments

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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.
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?!

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