The short version
Every SWIFT customer payment carries a code that says who should bear the bank charges. There are three options.
- OUR. The payer bears all charges, including those of intermediary and beneficiary banks.
- SHA. Shared. The payer bears the sending bank's charges. The beneficiary bears the charges of intermediary banks and their own bank.
- BEN. The beneficiary bears all charges, including the sending bank's charge, which is deducted from the amount.
In the newer ISO 20022 messages the same three choices are expressed with different codes: DEBT for OUR, SHAR for SHA and CRED for BEN. The meaning is the same.
Who charges what along the way
To understand the options you need to know where charges arise. On a typical international wire there are up to four kinds.
- Sending charge. What your own bank or provider charges to send the payment.
- Intermediary charges. Fees taken by correspondent or intermediary banks that pass the payment along. These are usually deducted from the payment amount as it goes through.
- Receiving charge. What the beneficiary's bank charges its customer for an incoming international payment.
- Conversion cost. If any bank converts the currency, the exchange rate it uses includes a margin. This is not a charge in the formal sense, but it reduces what arrives.
The charge option tells the banks how to treat the first three. It does nothing about the fourth, which is why choosing who converts, and at what rate, matters as much as choosing OUR, SHA or BEN.
The number of banks involved is driven mainly by the currency and the relationships between the banks at each end. A payment between two banks that hold accounts with the same correspondent may pass through only one intermediary. A payment to a smaller bank in a less connected market may pass through two or three. Each one is a potential deduction, and neither payer nor beneficiary chooses the route. That is why two payments of the same amount to two suppliers in the same country can arrive with different shortfalls.
Worked example: OUR
All figures in these examples are made up to illustrate the mechanics. Real charges vary by bank, corridor and currency.
A company in Canada owes a supplier in Germany 20,000 US dollars and sends it with OUR.
- The company pays its provider's sending fee separately.
- The payment is sent for 20,000 dollars. The correspondent bank, instead of deducting from the payment, bills the sending bank for its fee, which passes it on to the payer, sometimes weeks later.
- The beneficiary bank may charge its own fee for receiving the payment. Under OUR, it should claim that from the sending bank too.
- The supplier receives 20,000 dollars.
In practice OUR does not always deliver the full amount. Some intermediary banks deduct regardless of the code, and some beneficiary banks charge their customer an incoming fee whatever the sender chose. OUR improves the odds of full receipt considerably, but it is not a guarantee in every corridor. Payers should also expect that later claims for charges can arrive after the payment is complete.
Worked example: SHA
The same 20,000 dollar payment, sent with SHA. Again, all figures are illustrative.
- The company pays its provider's sending fee.
- The payment leaves for 20,000 dollars.
- The first correspondent deducts 25 dollars. The payment continues at 19,975.
- A second intermediary deducts 15 dollars. The payment continues at 19,960.
- The beneficiary bank credits 19,960 dollars and charges its customer a 10 dollar receiving fee on its account.
- The supplier sees 19,960 credited and a separate 10 dollar charge. Net receipt is 19,950.
SHA is the most common choice for business payments, and SEPA credit transfers apply an equivalent shared-charges principle. It is fair in principle: each side pays its own bank. The difficulty is the intermediary fees in the middle, which the payer does not see and the beneficiary did not expect. For invoice payments this often leaves a small unpaid balance that someone then has to chase or write off.
Worked example: BEN
The same payment sent with BEN, figures illustrative.
- The provider's sending fee of, say, 30 dollars is deducted from the payment amount instead of being charged separately.
- The payment leaves for 19,970 dollars.
- Intermediaries deduct 25 and 15 dollars. The payment arrives at 19,930.
- The beneficiary bank charges its 10 dollar fee. Net receipt is 19,920.
BEN is unusual for invoice payments because it guarantees a shortfall. It can make sense where the beneficiary has agreed to bear all costs, such as some refunds or payments under contracts that say so explicitly, but it should be a deliberate choice.
The three options side by side
| Option | Sending charge | Intermediary charges | Receiving charge | Typical use |
|---|---|---|---|---|
| OUR | Payer | Payer, though some banks still deduct | Payer, though some banks still charge locally | Invoices that must be settled in full |
| SHA | Payer | Beneficiary, deducted in transit | Beneficiary | General business payments |
| BEN | Beneficiary, deducted from amount | Beneficiary, deducted in transit | Beneficiary | Payments where the receiver agreed to bear costs |
Why beneficiaries receive less
When a beneficiary reports a shortfall, the cause is usually one of the following.
- Intermediary deductions on a SHA or BEN payment. The most common reason.
- Intermediary deductions despite OUR. Less common but it happens, particularly on longer routes.
- Beneficiary bank fees charged locally, which appear as a separate debit on the beneficiary's statement.
- Unplanned conversion. The payment was sent in a currency different from the account currency, and the receiving bank converted it at its own rate.
- Wrong amount sent. Not a fee at all, but worth ruling out before investigating anything else.
The gpi tracker often shows deductions at each step, along with the amount and currency at each bank. That is the fastest way to see where the money went. The guide to tracking with a UETR covers reading a trace.
Currency choice matters as much as the charge code
A frequent and avoidable loss comes from sending one currency to an account held in another. Consider an illustrative case: a payer sends US dollars to a supplier whose account at a European bank holds only euros. The beneficiary bank converts on arrival at its standard rate for incoming payments. The supplier receives fewer euros than the invoice required, and neither party chose the rate.
The cleaner approach is to agree the invoice currency, confirm the currency of the beneficiary's account, and convert before sending at a rate you know. If you need to pay a euro invoice from Canadian dollars, convert to euros first and send euros. That way the only remaining variable is the bank charges, which the charge option deals with.
Practical tips
- Agree in your contracts who bears bank charges. Many supplier terms specify that payment must be received in full.
- Use OUR where full receipt matters, and budget for occasional later charge claims.
- For regular SHA payments to the same supplier, ask them what typically arrives so you can agree how to treat small shortfalls.
- Pay in the currency of the beneficiary's account, converted at a known rate before sending.
- Check the tracker before arguing about a shortfall. It usually tells you exactly where it arose.
- Keep confirmations showing the charge option used, in case a dispute arises later.
Accounting for shortfalls and later claims
Bank charges create small differences that finance teams have to deal with. Handling them consistently saves time at month end and avoids friction with suppliers.
On the payer's side, OUR payments can produce charge claims that arrive after the payment is complete, sometimes weeks later. These claims come from intermediary or beneficiary banks through the sending bank. Book them to a bank charges account and reference them to the original payment, so you can see the true cost of paying each corridor over time. If one route repeatedly produces claims, that is useful information when deciding how to pay that supplier in future.
On the beneficiary's side, a SHA payment that arrives short leaves an open balance on the invoice. Agree a policy with regular counterparties. Some suppliers write off small differences below an agreed tolerance. Others add the shortfall to the next invoice. A few insist on full payment and will chase each one. Knowing which in advance stops a stream of small disputes.
Whichever side you are on, keep the confirmation showing the charge option and the amount sent. If a dispute arises over what was paid, the confirmation and the tracker history together show exactly what left the payer and what reached the beneficiary bank. Without them, the conversation tends to rely on screenshots of bank statements that show only part of the picture.
A periodic review of charge outcomes also pays off. Pull a list of payments to your main beneficiaries over a quarter, note the charge option and any deduction or later claim, and compare. Patterns appear quickly: a corridor where SHA consistently loses a noticeable amount, or a beneficiary bank that charges heavily on incoming payments. Those findings support a conversation with the supplier about currency, account location or who bears costs.
General information
This article is general information and is not legal, tax or accounting advice. Bank charging practices differ by institution and corridor and can change without notice. For how currency conversion fits into business payments, see the CCYFX Foreign exchange page.
