How Bank Transfers Work: ELIXIR, SORBNET3, SEPA, and SWIFT

7 days ago

7 min read

When initiating a bank transfer, we rarely stop to consider the actual route our funds take. Yet that route can vary surprisingly based on the currency, destination country, transaction value, and required settlement speed. Behind the scenes, banks select from a variety of clearing and settlement systems, each engineered for distinct operational requirements.

In Poland, the primary systems are ELIXIR, instant transfers, and SORBNET3. On a European and global scale, SEPA and SWIFT dominate the landscape.

Table of Contents:

When the Bank Doesn't Need to Send Anything
ELIXIR: The Workhorse of Polish Clearing
When Every Second Counts
SORBNET3: High-Value Settlement
SEPA: Borderless Euro Payments
SWIFT and the Long Journey of International Transfers
How the Rest of the World Handles Payments
Which Payment System to Choose?

Doing Business in Poland: How Bank Transfers Work

When the Bank Doesn't Need to Send Anything

The simplest scenario occurs when both the ordering party and the beneficiary hold accounts at the same financial institution, for example, both being Citi clients. In this case, no funds actually leave the bank. The institution simply reallocates the amount between two internal ledger entries without transmitting data externally. Consequently, an internal transfer executes instantaneously, even overnight or on weekends, and typically incurs zero or negligible fees.

ELIXIR: The Workhorse of Polish Clearing

When funds must be transferred to a different bank within Poland, the transaction is routed through ELIXIR, an automated clearing house system operated by the National Clearing House (KIR). The underlying mechanism is straightforward: KIR aggregates payment orders from multiple banks, calculates net settlement positions by offsetting mutual obligations, and settles only the resulting net balance through the National Bank of Poland (NBP).

Because of this net batch process, ELIXIR operates on a session schedule rather than in real time. A payment submitted right before a session cutoff may be held until the following cycle, which explains why a standard domestic transfer can take anywhere from a few minutes to the next business day to settle. For vendor invoices, payroll, or rent payments, this processing time is usually more than sufficient.

When Every Second Counts

When batch processing delays are unacceptable, Express ELIXIR - Poland's instant payment network - comes into play. Operating 24/7/365, including holidays and weekends, it routes funds to the destination account within seconds or a few minutes at most. Individual transactions are subject to a system-wide limit of PLN 100,000, though individual banks may enforce lower thresholds for their own customers.

An even simpler alternative is BLIK phone transfers: instead of entering an IBAN, the sender only needs the recipient's phone number, provided it is linked to their bank account.

SORBNET3: High-Value Settlement

Large-value and urgent domestic transactions are governed by a separate protocol. SORBNET3, operated directly by the NBP, functions as a Real-Time Gross Settlement (RTGS) system, processing each transfer individually and continuously without batching.

As a result, funds can reach the beneficiary within minutes, provided the transfer is submitted within the operating hours of both the system and the participating banks.

This system is heavily utilized for real estate transactions, corporate settlements, or payments requiring same-day value dating. Contrary to popular belief, there is no strict minimum statutory threshold for using SORBNET3. While historic tradition associates it with transactions exceeding PLN 1,000,000, the system itself enforces no minimum amount; individual commercial banks may, however, apply their own limits and compliance procedures.

SEPA: Borderless Euro Payments

Outside Poland, euro-denominated transfers within Europe are governed by SEPA (Single Euro Payments Area). Covering EU member states, the EEA, Liechtenstein, Norway, Iceland, Switzerland, and the UK, SEPA enables euro transfers under standardized rules. All that is required is the beneficiary's IBAN (and occasionally a BIC/SWIFT code).

A standard SEPA Credit Transfer typically settles within one business day at minimal or zero cost, offering far greater fee predictability than cross-border transfers outside the zone. When funding a euro account, SEPA is almost always the optimal choice. Senders should ensure they include any required unique reference code in the payment details to guarantee correct ledger posting.

There is also an instant variant: SEPA Instant Credit Transfer (SCT Inst). Operating 24/7/365, it credits funds within seconds, though availability and individual transaction limits depend on the specific originating and receiving institutions.

The technical distinction between SEPA and SWIFT is fundamental. A bank joining SEPA does not need to execute bilateral agreements or maintain Nostro/Vostro accounts with every European counterparty. Instead, it connects - directly or via a sponsor - to a centralized Clearing and Settlement Mechanism (CSM).

The simplified transaction flow is as follows:

Originating Bank → SEPA Clearing System (CSM) → Beneficiary Bank

Thanks to this architecture, SEPA remains structurally simpler, less expensive, and more predictable than SWIFT. Instant euro settlements are further supported by TIPS (TARGET Instant Payment Settlement), an infrastructure operated by the Eurosystem, to which banks can connect directly or through intermediaries.

SWIFT and the Long Journey of International Transfers

When handling US dollars, British pounds, Swiss francs, Japanese yen, or transfers to beneficiaries outside the SEPA region, SWIFT takes center stage. A common misconception should be cleared up immediately: SWIFT itself does not clear or settle any funds. It is a global messaging network through which financial institutions exchange standardized payment instructions. The actual movement of money occurs across a network of correspondent banking relationships. Consequently, execution typically takes between one and five business days, depending on currency, destination, cutoff times, and the number of intermediary banks involved.

The reason for this complexity is simple: no single commercial bank holds direct correspondent accounts in every currency with every financial institution worldwide. Instead, banks rely on correspondent networks. A US dollar transfer may pass through multiple entities:

Originating Bank → Originator's USD Correspondent → Intermediary Bank → Beneficiary's Correspondent Bank → Beneficiary Bank → Beneficiary Account

The routing path is typically chosen automatically by the sending bank based on currency, destination, correspondent networks, and liquidity available in its Nostro accounts.

While the sender can request a specific intermediary, the sending bank retains the right to modify the route for operational or regulatory compliance reasons. Because every bank along the chain may deduct its own processing fee, the final amount credited to the beneficiary's account is often lower than the principal amount sent.

To manage fee allocation, three standard charging options are used:

OUR: The sender covers all transaction fees. While this maximizes the likelihood that the beneficiary receives the full amount, it is not an absolute guarantee, as downstream intermediaries may still levy deductions.
SHA (Shared): The sender pays fees assessed by the originating bank, while intermediary charges are deducted from the transferred principal. This is the default option across most banking systems.
BEN: All transaction costs are borne by the beneficiary, meaning all intermediary and processing charges are subtracted from the final payload.

When funding a client account, selecting OUR is generally recommended to prevent shortfalls caused by intermediary fee deductions.

How the Rest of the World Handles Bank Transfers

Looking beyond Europe reveals a shifting landscape: Europe and the US are no longer the undisputed leaders in real-time retail payments. That title currently belongs to emerging markets, notably India and Brazil.

India's UPI (Unified Payments Interface), operated by the NPCI, processed over 228 billion transactions in 2025 - representing nearly half of global instant payment volume. By early 2026, it reached approximately 400 million active users. The architecture is decentralized, with user data managed by third-party payment service providers (PSPs) like PhonePe or Google Pay rather than a central database.

Brazil's Pix took a centralized approach: it is operated directly by the Central Bank of Brazil, utilizing a central directory (DICT) to map phone numbers or email addresses to bank accounts. In 2024, Pix handled 63.4 billion transactions, and by March 2026, it boasted 174 million users - about 82% of the country's population.

By contrast, the US FedNow service, launched by the Federal Reserve in July 2023, remains in its early consumer adoption phase. In Q1 2026, it processed 2.73 million transactions totaling $271.3 billion. However, with an average transaction value near $99,000, the system is primarily serving corporate, institutional, and treasury management needs rather than everyday retail payments.

The United Kingdom utilizes a dual model comparable to Poland's SORBNET3 and Express ELIXIR combination: CHAPS provides high-value, real-time gross settlement directly through the Bank of England with no maximum limit (costing £20 to £35 per transaction during business hours), while Faster Payments handles lower-value, retail instant transfers.

Meanwhile, China continues to expand CIPS (Cross-Border Interbank Payment System), launched in 2015 by the People's Bank of China to internationalize the Renminbi. Unlike SWIFT, which is purely a messaging system, CIPS directly clears and settles RMB payments. Connected to institutions across 189 countries, CIPS processed 8.2 million transactions valued at RMB 175.49 trillion in 2024.

This global snapshot illustrates a key shift: emerging economies like India and Brazil have surpassed Europe and North America in retail instant payment adoption, even though frameworks like SEPA Instant and FedNow were originally designed to match these global trends.

Which Payment System to Choose?

In practice, choosing the right transfer mechanism comes down to a few basic rules:

Euros within Europe? Choose SEPA (or SEPA Instant if time-sensitive).
US Dollars or non-SEPA currencies? Choose SWIFT.
Urgent PLN transfers? Choose Express ELIXIR (for smaller amounts) or SORBNET3 (for high-value transactions during banking hours).
Transfers within the same bank? Choose an internal transfer - it is instant and free of charge.