OUR, SHA and BEN international payment charges: decide who absorbs bank fees

International wire payments can pass through several banks, and the payment instruction can specify how charges are allocated between sender and beneficiary. The common OUR, SHA and BEN codes influence who bears bank fees, but local practice and correspondent-bank deductions can still affect the final amount received.

OUR means the sender bears the transaction charges

Swift documentation defines OUR as the option where the ordering customer bears the transaction charges. Businesses use it where the supplier contract requires the beneficiary to receive the full invoiced amount.

The sender's bank can charge an additional OUR fee or later correspondent claims. Compare that cost with the commercial consequence of a short-paid supplier.

SHA means charges are shared

Under SHA, the sender generally pays the sending-bank charges while other charges can be borne by the beneficiary. Swift describes the option as shared charges rather than full-value delivery guaranteed by the payer.

A supplier expecting exactly $100,000 can therefore receive less if intermediary or receiving-bank fees are deducted.

BEN places the charges on the beneficiary

BEN instructs that transaction charges are borne by the beneficiary customer. The payer sends the instructed amount, but deductions can reduce the amount ultimately credited.

This can be commercially unsuitable where the invoice terms say the buyer must pay a fixed net amount. Treasury should not choose BEN simply because it minimises visible sender fees.

Match the charge code to the purchase or sales contract

The commercial agreement should state who bears bank charges, particularly for high-value imports, commissions and loan payments. Accounts payable then uses the payment code that supports the contractual obligation.

Where the contract is silent, agree the treatment before repeated short-payments create supplier disputes.

Correspondent chains can affect the actual deduction

Swift notes that cross-border payments can involve several banks, each with its own charges and local practices. The chosen charge code does not always make every cost perfectly predictable in every market.

Use gpi or bank investigations when one corridor repeatedly delivers less than expected. Changing correspondent route or provider can be more effective than arguing over individual small fees.

Record fees separately from the invoice principal

If a £50,000-equivalent supplier invoice is paid and the beneficiary receives £49,950 because of a shared charge, the commercial invoice can remain £50,000 even though banking fees affected delivery.

Keep sender fees, intermediary deductions and FX spread separate so management can compare the true cost of each international payment route.

Worked example: a UK company must pay a manufacturer exactly €250,000 under the contract. Using SHA can leave the manufacturer short after receiving-bank fees. Using OUR can better support full-value delivery, though the UK company may pay extra bank charges.

For recurring suppliers, store the agreed charge option in the beneficiary master so staff do not choose it differently each month.

Review lender and tax payments separately. Some recipients require full value and can treat any deduction as arrears, making OUR-style charging more important than on an ordinary commercial invoice.

Worked example: a supplier invoice is $100,000 net of bank charges. If the buyer selects SHA and the beneficiary bank deducts $30, the supplier can record only $99,970 received and leave $30 outstanding. Using OUR can be more appropriate where the contract requires the supplier to receive the full $100,000.

Keep charge-code policy by payment type. Payroll, tax, loan repayments and critical supplier invoices can require full-value delivery, while other commercial payments can legitimately share charges under contract.

Do not confuse bank charges with FX spread. A payment can use OUR and still incur currency-conversion cost at the sending or receiving bank. Treasury should separate the two when comparing providers.

Review recurring short payments with the supplier before they become a credit-control issue. A small correspondent deduction repeated every month can create aged balances and reconciliation work that cost far more than the fee itself.

For high-volume international payables, record the charge option in the supplier master rather than asking AP staff to choose each time. This reduces inconsistent settlements and makes bank-fee forecasting more reliable.

Worked example: a company sends 500 monthly overseas supplier payments averaging $20,000. Even a $15 unexpected beneficiary deduction on each payment creates $7,500 of reconciliation differences. Standardising charge treatment can therefore save more administrative cost than the individual fee suggests.

Document exceptions where a supplier requests a different charge code for one payment. A temporary change should not silently overwrite the beneficiary master and affect all future invoices.

For customer refunds and commission payments, agree the charge basis explicitly as well. The appropriate option can differ from supplier invoices, and treasury should not reuse one default where the commercial contract expects another treatment.