How to choose the right payment solution for your needs: local rails or SWIFT?

Liam LinnaneAugust 01, 2025

7 minute read

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This guide explains when businesses should use local payment solutions or SWIFT, helping them choose the most cost-effective, transparent and efficient method for sending and receiving funds based on destination, currency, speed, and cost considerations.

Key considerations for using local payment solutions and SWIFT to optimise cross-border and domestic payments.

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Navigating the global payments landscape

For businesses with a global footprint, navigating the payments landscape can involve a range of providers, processes and costs.

Every time a business sends or receives funds – whether to suppliers, employees or partners – the transaction moves along a payment rail. These rails form the underlying infrastructure that enables the transfer of funds and data between payment service providers (PSPs).

There are two primary types of payment rails used in payments: local and international. Depending on your needs and the services offered by your PSP, you can use either to send and receive funds. Understanding the difference between the two is crucial for selecting the most efficient and cost-effective payment method.

This guide examines when it is advisable to utilise local payment solutions versus international payment routes, highlighting the key factors that corporate businesses and platform providers should consider, including cost, speed, currency, and destination. It also includes examples of how services like Fire’s multi-currency payout solution can support local payment needs in a global context.

Understanding the difference between local payment solutions and international payment routes

What are local payment rails?

Local payment rails are domestic payment networks designed to process transactions within a specific country or economic area.

In Ireland and across the wider European Economic Area (EEA), local payments are processed through SEPA (Single Euro Payments Area). In the UK, the main local payment rails are Faster Payments and BACS, while in the US, ACH and FedWire are commonly used.

Local payment rails are typically faster and more cost-effective than international payments made through SWIFT.

What is SWIFT?

SWIFT is a global financial messaging network used to facilitate communication between banks involved in cross-border transactions. While it enables international payments, the actual movement of funds occurs through one or more correspondent or intermediary banks before reaching the recipient’s account. SWIFT is the most common method for international payments, processing over $530 billion per day. While its global reach makes it a key component for many businesses’ payment capabilities, SWIFT payments are typically slower and more expensive than those made through local payment rails.

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Choosing between local payment solutions and SWIFT: key considerations

When determining which type of payment rail is most appropriate for your processing needs, there are several key factors to consider, including destination, currency, cost, speed, and transparency.

Consideration	Local payment rails	SWIFT payments
Destination & currency	Designed for domestic or regional transfers (e.g. SEPA for euro payments). Typically supports the local currency of the destination country.	Enables international and cross-currency payments (e.g. sending USD to the US or within the UK), making it easier to transact across global markets.
Cost	Generally lower and more predictable. Fees are usually fixed and disclosed upfront.	Can involve additional costs such as intermediary bank fees, but offers access to a broad international banking network.
Speed	Often faster, typically taking up to 1 or 2 days, with growing support for real-time systems such as SEPA instant.	Settlement may take 1–5 business days, depending on the number of correspondent banks involved.
Transparency	High transparency with clear settlement times and cost visibility.	Transparency of fees and settlement times can vary depending on the number of banks involved, but detailed tracking options (e.g. SWIFT GPI) are increasingly available.
FX handling	Already in local currency; any required foreign exchange can be managed separately by the sender or recipient.	Supports automatic FX conversion as part of the transaction, offering a streamlined experience as part of the payment process.
Settlement method	Settles through domestic clearing systems, typically reducing the number of intermediaries.	Operates on a messaging system with settlement through a network of correspondent banks, allowing for global reach and standardised international processing.

Destination & currency

When choosing which payment rail to use, the first consideration is whether you have a choice. For instance, if you have a euro account based in the EU and you need to send a payment to a US Dollar account in the US, this will likely require processing as a SWIFT transfer, as it’s a cross-border and cross-currency payment.

It’s also important to consider the currency involved. For example, Faster Payments can only be used to send sterling to other UK-based accounts. If you need to send US Dollars to an account domiciled in the UK, it will most likely need to be sent via SWIFT using SWIFT-addressable account details.

Cost

Local payment rails are typically more cost-effective than international ones, as they settle payments directly between domestic financial institutions. On average, local payments incur significantly lower base fees than SWIFT. In contrast, SWIFT payments can involve additional costs such as intermediary bank fees, but they offer access to a broad international banking network.

Speed

Local payments are generally faster than SWIFT payments. This is partly due to the ongoing shift towards real-time processing in domestic networks, with initiatives such as SEPA instant leading the way. In contrast, SWIFT payments can be slower due to complex routing arrangements, and settlement may take between one and five business days.

When settlement speed is a priority, local payment rails should be used whenever available.

Transparency

Local payment rails offer simplicity and predictability through a more direct structure, which helps set clearer expectations around fees, settlement times and payment outcomes. This makes them particularly well suited to certain types of cross-border payments.

At the same time, SWIFT GPI continues to enhance the transparency and traceability of global payments, supporting a wide network of financial institutions and enabling access to a broad range of currencies and markets.

Selecting the right payment option for your business needs: local payment solutions versus SWIFT

When local payment solutions are the best choice

Local payments are especially suitable for paying staff and suppliers in countries where your payment service provider has direct access to local clearing systems. They are particularly effective for high-volume, low-value transactions, especially when payments are made in the same currency as the recipient’s account.

Local payment rails can offer lower costs, faster settlement times and simpler processing for these use cases. The Fire Payments API enables businesses to automate their local payment solutions. Whether it’s initiating payouts, segregating funds or improving reconciliation, our API can simplify and streamline a variety of payment processes.

When SWIFT makes more sense

There are scenarios where SWIFT payments are more appropriate than local payment solutions. These include receiving funds from outside the UK or EEA, or when global reach is important.

We recommend using SWIFT payment rails when receiving funds from jurisdictions outside your local economic area, such as payments coming from outside the EEA or the UK. SWIFT is also well suited for sending non-local currencies, such as US Dollars from an Irish account, even if the beneficiary account is located in the same country.

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Using Fire for both local payment solutions and international transfers

Fire provides local payment solutions across 14 currencies, allowing businesses to send payments using domestic payment rails in countries such as the US, Canada, Australia, and Hong Kong. This means you can pay staff, suppliers, and partners in local currency, as if operating from within those jurisdictions.

By removing intermediary banks from the process, our local payment solution offers a cost-effective way to manage cross-border transactions. With transparent FX fees and live market exchange rates on weekdays, businesses can reduce costs and avoid unexpected charges.

Designed with transparency, control, and efficiency in mind, our local payment solution simplifies cross-border payment processes and empowers businesses to scale globally.

In addition, a Fire account enables your business to receive SWIFT payments in 31 currencies from jurisdictions around the world. Where payments are received in currencies other than the euro or sterling, we apply the live market rate to convert funds before crediting your account. There are no hidden mark-ups, just real-time, competitive exchange rates for added clarity and confidence.

Choose the most efficient route for every payment

Choosing the right payment rail is more than a technical decision; it’s a strategic one. Whether you are paying staff, suppliers, or receiving funds from international partners, aligning your payment method with your business needs can improve speed, reduce costs, and enhance operational efficiency.

At Fire, we help businesses simplify global payments by offering both local and SWIFT payment options through a single platform. With access to both, you can optimise each transaction and take greater control of your financial operations.

Understanding your options and using them wisely allows your business to operate efficiently, cost-effectively, and with confidence.

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Whether you’re scaling internationally, paying overseas suppliers, or managing multi-currency revenue, Fire gives you the flexibility and control to move money with confidence. With integrated access to both local and SWIFT payment rails, you can streamline global operations without the complexity or cost of traditional banking.

Read how we’ve supported Straight Teeth Direct™ as they expanded to over 50 countries.

To learn more about how Fire can help your organisation improve efficiency and transparency in international payments, contact our team at sales@fire.com for tailored support.