A common misconception is to consider SWIFT a payment system. Funds are not transmitted through it: the system provides transmission of standardized messages between banks, while actual settlements occur through correspondent accounts that banks maintain with each other.
Each participant has its own code, used when processing a transfer along with the recipient's details. Message standardization enables operations between banks in different countries.
Correspondent relationships are a key requirement. A transfer passes through a chain of banks, and if direct relations don't exist, intermediaries are involved, each deducting a commission. This explains the timeframes and final cost of international transfers, as well as why the amount received sometimes differs from the amount sent.
For individuals, practical considerations include commissions along the chain, transfer currency, and conversion rates. Transfers typically go through reserve currencies, so conversion may occur twice, and the final result depends on rates at each operation.