International Payment Mechanisms

How International Payments Work

• Overview of cross-border money movement
• Correspondent banking relationships
• TODO: explain how money doesn't actually "move" - it's ledger entries

The SWIFT Network

• What is SWIFT (Society for Worldwide Interbank Financial Telecommunication)?

  • TODO: messaging system, not a payment system
  • TODO: SWIFT codes / BIC codes
  • TODO: how a typical SWIFT transfer works

• SWIFT message types:

  • TODO: MT103 (customer transfers)
  • TODO: MT202 (bank-to-bank)

• Fees and timing:

  • TODO: intermediary bank fees
  • TODO: typical processing times (2-5 days)

Wire Transfers

• Domestic wire (Fedwire in US):

  • TODO: same-day settlement
  • TODO: fees and limits

• International wire:

  • TODO: relies on SWIFT
  • TODO: currency conversion

ACH and International Equivalents

• ACH (US):

  • TODO: batch processing
  • TODO: slower but cheaper

• SEPA (Europe):

  • TODO: eurozone transfers
  • TODO: near-instant with SEPA Instant

• Other systems:

  • TODO: BACS (UK)
  • TODO: Interac (Canada)

Anonymous Payment Methods

• Cash:

  • TODO: physical transport limitations
  • TODO: structuring laws

• Cryptocurrency:

  • TODO: Bitcoin, Monero, etc.
  • TODO: pseudonymous vs anonymous
  • TODO: mixing services and privacy coins

• Prepaid cards:

  • TODO: limitations on international use
  • TODO: KYC requirements

• Hawala and informal value transfer:

  • TODO: how it works
  • TODO: legal status varies by country

Traceable Payment Methods

• Bank transfers:

  • TODO: full paper trail
  • TODO: regulatory reporting

• Credit card payments:

  • TODO: networks (Visa, Mastercard)
  • TODO: cross-border fees

• Payment services:

  • TODO: PayPal, Wise, Remitly
  • TODO: trade-offs in speed, cost, traceability

Reporting Requirements

• Currency Transaction Reports (CTRs):

  • TODO: $10,000 threshold in US

• Suspicious Activity Reports (SARs):

  • TODO: bank's obligation to report

• Cross-border reporting:

  • TODO: FBAR, FATCA for US persons

References

• TODO: Add references