You send a $5,000.00 invoice, the client swears they paid exactly that, and noticeably less lands in your account. Nobody lied: the money stayed behind along the route of a SWIFT transfer.
How a SWIFT transfer travels
SWIFT is the messaging network banks use for international transfers that are not euro payments inside the SEPA area. Your client's bank and yours rarely hold accounts with each other, so the payment can hop through one or more correspondent banks (intermediaries). Each can take its fee out of the amount before passing it on.
OUR, SHA and BEN: who pays what
When the client orders the transfer, they choose (or their bank chooses for them) how the charges are split:
- OUR: the sender pays every charge. In principle you receive the full amount, although an intermediary may still deduct something.
- SHA (shared): the sender pays their bank; you pay your bank and the intermediaries. Many banks use it by default.
- BEN: you pay every charge, deducted from the amount.
The four places money leaks
- The client's bank, which charges them for sending (them, under SHA or OUR).
- The intermediaries, which deduct their share from the amount in transit.
- Your bank, which may charge you for receiving an international transfer.
- The conversion, if the payment arrives in another currency: whichever bank converts uses its own rate, with a margin over the mid-market rate. It is usually the largest of the four.
A worked example
Suppose (these are example figures, not any particular bank's) your client sends $5,000.00 with shared charges, one intermediary deducts $20.00, your bank converts to euros with a 1.5% margin and charges the equivalent of $15.00 to receive it:
- Card fee
- Cross-border
- Conversion
- Payout
| Step | Lost |
|---|---|
| Intermediary deduction | −$20.00 |
| Conversion spread (1.5%) | −$74.70 |
| Incoming fee | −$15.00 |
| Total | −$109.70 |
That is $109.70 gone without anyone charging a visible "fee" on the invoice. The same invoice paid by ACH to Wise's US account details costs $14.50 in our model, because there are no intermediaries and no receiving fee, and the conversion happens at the mid-market rate with a published fee.
Euros inside SEPA are different
Euro transfers inside the SEPA area (the EU, the EEA, the UK, Switzerland and a few other territories) do not go through correspondent chains, and EU rules require them to cost the same as a domestic euro transfer. Since 2024 the rules also require instant euro transfers to cost no more than regular ones. If your client is in the SEPA area and pays you in euros, this article barely applies to you.
How to stop a payment arriving short
- Avoid SWIFT where you can: give clients local bank details in their currency (ACH in the US, Faster Payments in the UK) through a multi-currency account. I compare two in Payoneer vs Wise.
- If it must be SWIFT, ask for OUR and for the invoice to be sent in its original currency, so you do the conversion wherever it is cheapest.
- Ask your bank what it charges to receive international transfers and what margin it converts at. Some charge a percentage with a minimum.
- If it already arrived short, ask your bank for the transfer message details: they show the charge option and what each bank deducted.
To see what you lose with each provider on your route, use the calculator; and if the conversion is the problem, the conversion markup guide shows how to measure it.
Every figure in this guide is calculated from the providers' public pricing pages, with the same function as the calculator. See the methodology for what the model includes and leaves out.