Understanding SWIFT Charges: What You're Really Paying For in International Transfers

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International money transfers have become a routine aspect of both personal and business financial activities. Whether a freelancer in India receives payments from clients abroad, a parent sends funds to a child studying overseas, or a business settles invoices with international partners, the need for cross-border transactions is ever-present.

The SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, a global messaging system that enables secure and standardized communication between financial institutions, is central to facilitating these transactions.

This article aims to demystify SWIFT charges by breaking down the different fees involved in international transfers. We’ll explore the roles of sending, intermediary, and receiving banks, delve into currency conversion markups, and discuss how fee-bearing options (OUR, SHA, BEN) affect the total cost.

Understanding SWIFT Charges

When you initiate an international transfer, your bank sends a SWIFT message to the recipient’s bank, often passing through one or more intermediary banks. Each institution involved may levy fees for processing the transaction, leading to multiple charges that can significantly reduce the amount the beneficiary receives.

What Are You Paying For? Breaking Down SWIFT Charges

When you send money abroad through your bank, you might notice that the amount received on the other end is less than what you sent—or that your account was charged more than expected. That’s where SWIFT charges come in. But what exactly are you paying for?

To understand this, it’s important to know that SWIFT doesn’t move your money. Let’s break down the common types of charges you’ll encounter when making an international transfer via the SWIFT network.

Outgoing Transfer Fees

Depending on your bank and the destination country, this could be a flat fee or a percentage of the transfer amount. Some banks also charge an additional fee if you choose a faster delivery method or if the transaction requires extra verification. Fees can vary widely:

Percentage-Based Fees: Some institutions may charge a percentage of the transfer amount, particularly for larger sums.

Intermediary Bank Fees

Instead, the money passes through one or more intermediary banks. Each of these banks may charge a handling or processing fee, which is usually deducted from the transfer amount. Each intermediary may deduct a fee:

Typical Range: $10 to $30 per intermediary bank.
Multiple Intermediaries: If multiple intermediary banks are involved, these fees can accumulate, significantly reducing the transfer amount.

These fees are often unpredictable, as the number and identity of intermediary banks can vary depending on the transfer route.

Recipient Bank Fees

Once the money reaches its final destination, the recipient’s bank might also take a fee before depositing the funds. These fees vary widely depending on the local banking regulations, the receiving bank’s policies, and whether the incoming funds are in foreign currency.

Flat Fees: Commonly range from $10 to $30.
Percentage-Based Fees: Some banks may charge a percentage of the received amount.

These fees are typically deducted from the transferred amount before it is credited to the recipient’s account.

Currency Conversion Fees

If you’re sending money in one currency and it’s received in another, the bank will convert the funds using its exchange rate—often with a hidden markup. For example, on a $10,000 transfer, a 3% markup is a $300 cost.

Markup Range: 2% to 5% above the mid-market rate.
Impact: This hidden fee can significantly reduce the amount received, especially for large transfers.

Understanding the Fee Options: OUR, SHA, and BEN

When you make an international money transfer, the total fee isn’t just one flat cost—it can be split between you and the person receiving the money, depending on the payment method you choose.

Let’s break each of these down so you know what to expect before you hit “send.”

OUR – You Cover Everything

As the sender, you agree to pay all the fees—including your bank’s fees, any charges by intermediary (correspondent) banks, and the fees taken by the receiving bank. If you need the exact amount to arrive in full—say you’re paying an overseas invoice, tuition fees, or a down payment—this is the best choice.

What to keep in mind:

You might not know the total fees upfront since some intermediary banks deduct their charges without notifying you.
It’s the most expensive option for the sender but ensures the recipient gets the full amount.

SHA – Fees Are Shared

SHA stands for “shared,” which means you pay your bank’s transfer fee, and the recipient pays the rest—including fees from intermediary and receiving banks. This is the most common setting for international personal transfers and many B2B transactions, as it splits the cost.

What to keep in mind:

Depending on how many banks the transfer passes through, the recipient will likely receive less than what you sent.
It’s a middle-ground option in terms of fairness, but the final received amount can vary.

BEN – The Recipient Pays It All

With the BEN (beneficiary) option, the recipient covers all fees. This includes fees from your bank, any intermediary banks, and the receiving bank. Rarely used today, this method is typically chosen only when the sender doesn’t want to pay any fees. It’s not ideal if you send money as a gift, pay wages, or make a payment where the full amount matters.

What to keep in mind:

The recipient might be surprised by the deductions and could receive a much smaller amount than expected.
It can reflect poorly on businesses if clients or partners are left to cover hidden costs.

Real-Life Example of Fee Options

Let’s say you’re transferring $1,000 from the US to India:

OUR: You pay $40 in total fees. The full $1,000 arrives in the recipient’s account.
SHA: You pay $20; the recipient receives $970 after intermediary and receiving bank deductions.
BEN: You pay $0; the recipient receives $950 or less, depending on the banks involved.

Smart Ways to Reduce SWIFT Charges on Your International Transfers

International money transfers often come with hidden or unexpected SWIFT charges. While some of these costs are unavoidable due to the involvement of multiple banks in the transaction, there are smart ways you can minimize what you pay—without compromising the security or speed of your transfer.

Here are practical strategies to help you keep more of your money when sending funds across borders.

Compare Bank Fees Before Transferring

Not all banks charge the same for SWIFT transactions. Some may have flat fees, while others add hidden charges or poor exchange rates. Always compare:

Outgoing SWIFT fees
Intermediary bank fees (if disclosed)
Exchange rate margins

Choose the Right Fee Type (OUR, SHA, BEN)

As explained earlier, the fee structure (OUR, SHA, or BEN) plays a significant role in who pays what. If you want to avoid surprises:

Use OUR when the recipient needs the full amount.
Use SHA when splitting costs is acceptable.
Avoid BEN unless the recipient agrees to it.

Choosing the right option can prevent double charges and ensure better transaction clarity.

Avoid Intermediary Banks Where Possible

Many SWIFT transfers route through correspondent or intermediary banks, which often deduct additional fees. To avoid them:

Send through banks with a direct relationship to the recipient’s bank.
Ask your bank if the transfer will involve third-party banks.
Alternatively, consider transfer services that use their own networks and avoid intermediaries altogether.

Bundle Transfers When Possible

Each international transaction incurs a separate SWIFT fee. If you regularly send money abroad—whether for payroll, invoices, or family remittances—try consolidating them into a single larger payment.

This reduces the number of transactions and lowers your overall fees.

Use Digital-First or Low-Fee Transfer Services

One of the easiest and most effective ways to reduce SWIFT charges is to move away from traditional banks and opt for modern, digital-first transfer services. Fintech platforms like Wise, Revolut, and PayGlocal are changing the game when it comes to international payments.

Check for Hidden Exchange Rate Margins

Even if your bank advertises “low SWIFT fees,” they might cover the cost with poor exchange rates. Always compare rates using platforms like Google (mid-market rate), XE.com, OANDA, etc.

Understanding the true cost of international money transfers can save you and your recipients significant amounts over time. SWIFT charges often add up in ways that aren’t immediately visible, from sender, intermediary, and recipient bank fees to hidden currency conversion markups. Fortunately, by comparing providers, choosing the right fee structure, and exploring digital-first solutions like PayGlocal, you can reduce these costs without compromising speed or security.

Check out our full breakdown on SWIFT charges for a deeper look at each fee and how to manage it effectively.