SPFS is the SWIFT alternative in Russia; How SPFS Works

At the end of 2020, there were 23 foreign banks connected to the SPFS from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan and Switzerland.

SPFS (Russian: Система передачи финансовых сообщений (СПФС), romanized: Sistema peredachi finansovykh soobscheniy, lit. ’System for Transfer of Financial Messages’) is a Russian equivalent of the SWIFT financial transfer system, developed by the Central Bank of Russia. The system has been in development since 2014, when the United States government threatened to disconnect Russia from the SWIFT system.

Compared to SWIFT, the system faces a number of challenges, especially higher transaction costs[4] though in March 2018 transaction fee was radically reduced to 0,80–1,00 ₽ (0.012–0.015 $) per transaction. The system only works within Russia, though there are plans to integrate the network with the China-based Cross-Border Inter-Bank Payments System.

The Russian Government is also in talks to expand SPFS to developing countries such as Turkey and Iran. Owing to its limitations, the SPFS system is seen as a last resort, rather than as a replacement for the SWIFT network. Since 2019 many agreements have been reached to link SPFS to other countries’ payment systems in China, India, Iran, as well as the countries inside the EAEU who are planning to use SPFS directly.

At the end of 2020, there were 23 foreign banks connected to the SPFS from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan and Switzerland.

From the Bank of Russia Website

Financial messaging system of the Bank of Russia (SPFS)

The financial messaging system of the Bank of Russia (FMS) forms an alternative electronic financial messaging channel which is often called a ‘SWIFT analogue’. The FMS guarantees the uninterrupted transmission of financial messages within the country.

Credit institutions and their corporate customers are connected to the FMS when they are technically ready and establish contractual arrangements with the Bank of Russia. The procedure is defined by a special Bank of Russia regulation.

In order to interact using the FMS, foreign institutions should submit a completed application form (see below) and copies of documents confirming their registration as legal entities (translated into Russian, certified by apostille) by e-mail to SPFS@cbr.ru.

The Bank of Russia publishes draft descriptions of message formats and schemes based on the latest version of the corresponding ISO 20022 messages for use in interactions between banks and their corporate customers within the Bank of Russia financial messaging system.

(Information is collected from Wikipedia and the Bank of Russia. Information is not modified)

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Md. Mizanur Rahaman Mizanhttps://www.mizanurrmizan.info
Md. Mizanur Rahaman Mizan aka Mizanur R. Mizan is a freelance writer from Bangladesh who has interests in teacher-education, research, literature, international affairs, history, and sports. Mizan likes watching different kinds of films and listening to pop and classical songs. Follow him on ResearchGate or join him on other social media.
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