Who pays the international bank transfer fees?

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Global cross-border payment expenses involve multiple components including outgoing fees of $35 to $50, intermediary bank fees of $15 to $30 per bank, and incoming fees ranging from $0 to $25. Who pays international bank transfer fees depends on selected SWIFT fee instruction codes such as OUR, BEN, or SHA. Additionally, currency markups reflect exchange rates with a 2% to 5% spread above the mid-market rate.

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Who pays international bank transfer fees: SWIFT codes

Understanding cross-border financial friction helps you navigate expenses effectively. Who pays international bank transfer fees depends on your payment setup and instruction choices. Explore the details to manage your international transactions better and avoid unexpected costs.

Who pays international bank transfer fees?

Both the sender and the recipient can pay international transfer fees, depending entirely on the payment instruction option chosen when the transfer is initiated. When sending money across borders through the SWIFT network, specific fee routing codes determine how costs are distributed among all participating financial institutions.

Understanding SWIFT Fee Instruction Codes

International wire transfers rely on standardized SWIFT routing codes to manage expense regulation. Knowing these codes helps prevent unexpected deductions and ensures your money arrives as planned.

OUR (Sender Pays All): The sender covers all sending, intermediary, and receiving fees. The recipient gets the exact amount sent without any hidden subtractions.

BEN (Beneficiary Pays All): The recipient covers all charges. Intermediary and receiving banks deduct their fees directly from the transfer total before crediting the final balance. SHA (Shared Fees): The sender pays their own banks outgoing fee, while the recipient pays incoming and intermediary bank charges. Deductions happen quietly while funds are in transit.

Breakdown of Standard Transfer Costs

A complete view of cross-border payment expenses goes beyond simple flat charges. The financial friction is usually spread across multiple distinct components.

1. Outgoing fee charged by the senders bank, typically ranging from $35 to $50.

2. Intermediary bank fees ranging from $15 to $30 per bank, depending on the selected routing option. 3. Incoming fees charged by the recipients bank, which can vary from $0 to $25. 4. Currency markup reflected in the exchange rate, commonly adding a 2% to 5% spread above the mid-market rate. ^[4]

How to Avoid Unexpected Wire Transfer Deductions

Finding out your business partner or family member received less money than expected is frustrating. Misunderstood SHA codes frequently lead to missing funds or unexpected deductions.

To avoid short payments, always select the OUR payment instruction when exact delivery amounts matter. Plus, checking exchange rate markups before hitting confirm can save hundreds of dollars on large transactions. Transparency beats convenience every single time when moving money globally.

If you want to know more details, check out Does the sender pay for the wire transfer fee?.

Comparison of SWIFT Fee Instruction Options

Choosing the right payment code dictates who bears the financial weight of intermediary handling and routing expenses.

OUR (Sender Pays All)

• Critical vendor payments, tuition, and exact invoice settlements

• Recipient gets the exact instructed amount without deductions

• Sender covers all sending, correspondent, and receiving fees

SHA (Shared Fees)

• Standard peer transfers and routine commercial transactions

• Recipient receives payment minus intermediate bank deductions

• Sender pays outgoing bank fee; recipient pays intermediary and incoming charges

BEN (Beneficiary Pays All)

• Rarely recommended unless explicitly agreed upon by the payee

• Recipient gets significantly less due to accumulated chain deductions

• Recipient absorbs all routing, intermediary, and processing charges

For precise commercial obligations, OUR ensures zero shortfall for the recipient. Meanwhile, SHA functions as the default standard for many regular transfers, leaving minor intermediary adjustments to the beneficiary.

Vendor Payment Shortfall Experience

Minh, a project manager in Ho Chi Minh City, needed to wire $5,000 USD to an overseas software contractor using a standard SHA code. He assumed the flat transfer fee covered everything.

The reality hit hard when the contractor emailed saying they only received $4,940 because two intermediary banks deducted $30 each in lifting fees along the SWIFT route.

Minh had to initiate a secondary small transfer to cover the shortfall, losing extra money on duplicate bank outgoing fees and conversion spreads.

For all future project milestones, he switched exclusively to the OUR instruction code, ensuring contractors received their exact invoiced compensation without friction.

General Overview

Select the correct SWIFT routing code

Choose OUR when you need the recipient to get the exact net amount, and use SHA when sharing standard network transaction costs.

Account for hidden currency markups

Exchange rate markups can cost significantly more than the flat wire fee, making currency evaluation vital for large transfers.

Anticipate intermediary deductions

Correspondent banks can deduct routing fees on multi-hop international transfers unless the sender explicitly covers them upfront.

Common Misconceptions

Why did my recipient get less money than I sent?

This happens when intermediary or receiving banks deduct correspondent fees during transit, or if a SHA instruction code was selected instead of OUR. Banks along the SWIFT network charge processing fees that quietly diminish the final payout.

Can I completely avoid international wire transfer fees?

While traditional SWIFT wires almost always carry costs, you can minimize expenses by utilizing specialized multi-currency transfer platforms or checking if your bank offers fee-free options for specific account tiers. Always inspect both the visible transfer fee and the underlying currency markup.

What is the difference between SHA and OUR payment codes?

Under an OUR instruction, the sender bears every fee involved in the transfer chain so the beneficiary gets the full amount. Under a SHA instruction, costs are split: the sender pays their local bank fee, and the recipient pays any intermediary or incoming bank charges.

Cross-reference Sources

[4] Usedots - Currency markup reflected in the exchange rate, commonly adding a 2% to 5% spread above the mid-market rate.

Banking Who pays the international bank transfer fees?

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