In this article, we cover Details of charges (OUR/SHA/BEN) with relevant examples. These three options mainly show us the information about who is going to bear the charges. Whether it is the ordering customer, beneficiary or it will be shared.
Our bank or financial institution would ask about transaction fees distribution when we transfer our money internationally over a SWIFT network. And, the same gets reflected in MT103 document.
Details of charges (OUR/SHA/BEN)
So, we have got three options when it comes how transaction fees can be distributed:
OUR: The Sender bears the entire transaction fees.
Example: Amount to be debited-
Amount that is instructed to be transferred: $1,000
Sender’s charges: $5
Receiver’s charges: $6
Total Amount that has to be debited from Sender’s account: $1,011
SHA: The transaction fees is shared between the sender and beneficiary.
Here, the sender would pay the transaction fees of remitting bank. While the beneficiary pays for both intermediary as well the beneficiary’s banks.
Example: Amount to be debited-
Amount that is instructed to be transferred: $1,000
Sender’s charges: $5
Total Amount that has to be debited from Sender’s account: $1,005
BEN: The beneficiary bears all the transaction charges
Here, no charges are to be paid by the remitter/sender. And, the beneficiary bears the transaction fees which is deducted from the total amount. And, the balance gets credited to the beneficiary account.
Example: Amount to be debited-
Amount that is instructed to be transferred: $1,000
Total Amount that has to be debited from Sender’s account: $1,000
If the Beneficiary was supposed to receive €936. But, there would be remitter bank charges as well as beneficiary bank charges. If that amounts to €11 then, the total amount the beneficiary account is credited with is €925.
In conclusion, it is important to decide beforehand who will borne the transaction fees. For more details, you should contact your bank.
