BRICS Pay vs SWIFT

Headlines often say “BRICS Pay vs SWIFT” — sounding like a duel where one has to win. Reality is gentler: SWIFT will not vanish for a long time, and BRICS Pay is being built next to it, not on top of it — like a second road to the same cities.

What SWIFT actually is

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It is a Belgian co-operative established in 1973 by banks from the US, Canada and Europe. Its headquarters have been in La Hulpe near Brussels ever since.

The biggest misconception is that SWIFT “moves money”. It does not. SWIFT is a standardised messaging network: “Bank A, please credit 100 EUR to account Y at Bank B”. The actual money moves over a separate infrastructure — through correspondent banks and central banks. SWIFT just guarantees that the message arrives quickly in a format everyone understands (the MT standard, soon ISO 20022 / MX).

Today SWIFT connects about 11,000 financial institutions in 200+ countries. Around USD 150 trillion of transactions flow through it each year — about 1.5× world GDP. More than 70% is denominated in dollars and euros. It is the “nervous system” of international finance.

What is wrong with SWIFT

If SWIFT has worked for 50 years, why build an alternative? Three reasons.

Problem 1: A chain of correspondents

A normal cross-border bank transfer takes a long path. Suppose a Russian company sends 1,000 EUR to a Brazilian supplier. The route is: your Russian bank → its European correspondent (Deutsche Bank in Frankfurt, say) → a US correspondent (JPMorgan in New York, because most global settlement runs in dollars) → a Brazilian correspondent (Banco do Brasil) → the recipient’s bank.

Four banks in the chain. Each charges a fee (typically USD 15–30 fixed plus a percentage), each runs its own FX (EUR → USD → BRL — two conversions of 1–2% each). All in: up to 6% markup per transfer and 1–5 working days until credited.

Problem 2: Dollar dominance

Historically more than 70% of SWIFT volume is in dollars. Not a “conspiracy” — after Bretton Woods 1944 the dollar became the global reserve, and most international contracts are still denominated in it. Because of that, even when you transfer roubles to Brazil, the chain often goes through a USD conversion: rouble → dollar → real. Double markup, plus dependence on USD- system availability.

Problem 3: Vulnerability to political decisions

SWIFT is a private organisation in Belgium, formally subject to European law. But it is under heavy pressure from the US regulator OFAC (Office of Foreign Assets Control). In practice that means the United States can “ask” SWIFT to exclude specific banks or whole countries — and SWIFT tends to comply.

There are precedents already. Iran was partially cut off in 2012 and again in 2018. A number of Russia’s biggest banks were disconnected in February-March 2022. North Korea and Cuba have been off the network for years. This is not a theoretical threat — it is a real political lever.

What BRICS Pay offers

BRICS Pay differs from SWIFT in two key ways.

First — decentralised architecture. Inside BRICS Pay runs a technology called DCMS (Decentralised Cross-border Messaging System). It is essentially the same thing as SWIFT, only without a Belgian headquarters: servers stand in every participating country and talk to each other as equal peers in a P2P network (the same logic as torrents). If one node goes off by political decision, the others keep operating. “Switching off a country” is technically impossible.

Second — direct settlement in national currencies. BRICS Pay does not route payments through a USD “gateway”. If a Brazilian company pays an Indian one, settlement is real ↔ rupee directly, at market rates. That eliminates the double conversion and its 2–4% markup.

Side-by-side comparison

BRICS Pay vs national payment systems

Each country has its own instant-payment system: SBP in Russia, UPI in India, Pix in Brazil. BRICS Pay does not replace them — it connects them, like an adapter through which an SBP transfer can pass to Indian UPI without going through US dollars in the middle.