# How correspondent banking fees shrink a transfer How each bank in an international transfer takes a cut, why the recipient gets less than sent, and how direct settlement avoids it. --- ## How correspondent banking fees shrink a transfer Every professional who disburses money across a border has felt it: the wire goes out for one number and lands for another. No error message, no explanation, just a shortfall at the other end and a phone call to explain it. The gap is not a glitch. It is the correspondent banking system collecting its toll at every station along the route, and it will do so again on the next wire unless you understand exactly where the money goes. This piece covers the correspondent-fee leakage specifically — the lifting fees, the chain of intermediary deductions — so you can anticipate it, price for it, and advise the counterparties you represent with authority. ## Why the sending bank is rarely the only bank in the room The starting assumption most people bring to an international wire is wrong: they imagine two banks, one on each end, and a direct transfer between them. In international transfers, the two financial institutions involved — the one sending the money and the one receiving it — don't always have a direct connection to each other. Intermediary banks bridge the gap in the international banking network, helping international money transfers find a route between the two banks. This is not rare or unusual. It is the norm. The SWIFT network of banks is so large that most banks don't have a direct financial relationship with each other, and when they don't, an intermediary bank is used to complete the transaction. The payment order generated by the sender's bank passes through an intermediary bank or through multiple intermediaries before reaching the beneficiary bank. The underlying mechanics are built on what the industry calls nostro and vostro accounts. A domestic bank sets up a nostro account with a foreign correspondent bank — essentially, "our money held by you." The correspondent refers to that same account as a vostro account, "your money held by us." When the domestic bank needs to send funds abroad, it transfers the payment to its nostro account at the correspondent bank. The correspondent deducts its service fee and then processes the payment to the intended recipient through local clearing. That last sentence is where the leakage begins. The correspondent is not doing this for free. Each correspondent bank charges a processing fee. Industry sources note that international wire transfer fees typically range from $15–$50 per intermediary, and most payments involve one to three intermediaries. On top of these explicit charges, receiving banks often deduct $15–$25. ## The correspondent chain: one, two, or three hops The number of banks that touch a wire before it reaches its destination depends entirely on which corridors are involved. The number of hops matters. US to UK may be one hop — a direct correspondent relationship. US to Nigeria might be two or three hops — limited direct relationships. More hops mean more fees and more time. Each hop is a fee event. Usually, one to three intermediary "correspondent" banks relay the message and settle funds through their own accounts. Each correspondent may deduct a fee, typically $10–$30 per hop. That is the floor. On some routes or through certain institutions, the per-hop charge runs higher. Typically, one to three intermediary banks are involved, and each charges $15–$50. The problem is compounded by the fact that the route is not determined at the time of sending. Under the SWIFT network, it is not possible to know beforehand who the intermediary banks will be or how much the charge will be. The SWIFT network selects routing automatically, and your originating bank may not even know which correspondent sits in the middle. Unlike your bank's upfront wire transfer fee, intermediary charges are typically not disclosed in detail when you initiate a transfer. Your bank may not know which intermediary banks will be involved. Fee structures can change between banks and currencies. This is the defining characteristic of correspondent-fee leakage: it happens downstream of any decision you made when initiating the wire, it is invisible at the point of sending, and the first confirmation you get of its magnitude is when the recipient tells you the number that landed. ## What "lifting fees" actually means The industry term you will encounter is *lifting fees*. It is simply the professional name for what each intermediary charges when it picks up the payment from the preceding bank and carries it forward. Lifting charges, or lifting fees, may be charged by intermediary banks or by the recipient's bank for handling the international payments. These fees are charged to the recipient in cross-border transactions. Some institutions charge what are called "lifting fees," which are additional amounts deducted by banks after receiving an international wire. These are disclosed after the fact rather than at the time of sending. The practical consequence is well-known to anyone who has coordinated an international disbursement. When a supplier says they got less than you sent, an intermediary bank usually took a cut. SWIFT payments often hop through one or more correspondent banks before reaching the destination, and each can deduct a fee from the principal as it passes through. You sent $10,000; your supplier sees $9,930; the missing $70 went to banks you never chose and can't see on your statement. The total erosion compounds. When added together, total fees can amount to 1–4% of the transfer amount. On a $50,000 commission disbursement, that range means $500 to $2,000 leaking out before arrival. On a seven-figure closing proceeds wire going to a foreign principal, the arithmetic becomes significant enough that it changes conversations about net amounts owed. ## OUR, SHA, and BEN: the one field that determines who absorbs the loss When an international wire is initiated through SWIFT, the sender selects a charge code that governs who bears the correspondent fees in transit. When you make an international bank transfer, your bank will ask who pays the transfer fees. In SWIFT MT103, this appears in "Details of Charges (Field 71A)" as OUR / SHA / BEN. Understanding the effect of each option is essential for anyone coordinating closing disbursements. **OUR** means the sender absorbs all charges. With this option, the originator of the payment is responsible for paying all fees associated with the transfer, including those charged by the sender's bank, the intermediary banks, and the receiving bank. This ensures that the full amount of the payment is received by the beneficiary without any deductions. However, it may be more expensive for the sender as they are bearing the full cost of the transfer. **SHA (Shared)** is the most common default, and it is where the confusion most often originates. SHA means the sender pays its own bank fee, but intermediary banks deduct their charges from the payment amount. So the sender pays their originating bank, thinks they've covered the cost, and the correspondent deductions hit the principal anyway. **BEN** places everything on the recipient. With BEN, the beneficiary pays all charges, meaning intermediaries deduct their fees before forwarding the payment. The sender pays nothing at the originating bank beyond the wire itself, but the amount landing is reduced by every fee in the chain. The choice isn't just about who bears the cost — it affects predictability. With OUR, you know exactly how much will arrive. With BEN or SHA, the final amount can be challenging to predict because intermediary fees are deducted along the way. For deal professionals, this predictability distinction is not academic. When a commission is fixed at $125,000 and you wire $125,000 under SHA, the other party may receive $124,850 or $124,700 depending on the route. That opens a conversation no one wants to have the day after closing. ## How this plays out in a cross-border deal disbursement Consider a straightforward scenario: a cross-border acquisition closes. The buyer's attorneys wire $3,500,000 in total proceeds to a title or settlement account. From there, the settlement agent needs to disburse to three parties — a selling agent in one jurisdiction, a co-broker in another, and a foreign principal seller in a third. Each of those wires crosses at least one border. Each passes through at least one correspondent. Each one has a fee event the settlement agent did not originate and cannot predict. If the charge code is SHA on all three outbound wires — which is frequently the default selected at the originating bank without much thought — the settlement agent has now sent the correct gross amounts but potentially shorted every recipient by $30 to $150 depending on routing depth. The selling agent gets a shortfall notice. The co-broker calls asking about a discrepancy. The seller queries their bank. Three follow-up conversations, three reconciliation exercises, three wires possibly needed to true up the difference. The sender is not notified of these deductions in advance; the recipient simply receives less than expected. This creates a practical problem for businesses making payments: if the recipient requires a specific amount, the payment needs to account for the anticipated deduction, or the shortfall triggers a follow-up payment and the friction — and fees — that go with it. The right professional response is to specify OUR on any disbursement where the recipient's net amount is contractually or practically fixed, accept the higher originating fee, and build that cost into the deal structure from the start. When the amount landing is the negotiated number, there is no dispute. When it isn't, there is. ## The routes where the leakage is worst Not all corridors are created equal. A wire from a US bank to a large UK clearing bank in sterling, both institutions on SWIFT GPI with a direct nostro relationship, may transit in hours and cost one modest lifting fee. A wire from a US bank to a regional bank in Southeast Asia, moving through a New York correspondent, then an Asian hub bank, then finally the local institution, will touch more hands and lose more at each one. Certain regions impose higher wire transfer fees due to limited banking networks and currency controls. In Africa and South America, fees are high due to fewer correspondent banking relationships. The same logic applies to emerging markets more broadly: fewer direct banking relationships between institutions means more hops, and more hops means more fees extracted from the principal. The currency of the wire matters too. USD, EUR, and GBP wires typically travel more direct routes because the correspondent networks for those currencies are denser and better-established. Wires in less commonly traded currencies may need to convert at an intermediate hub, adding not only a lifting fee but a conversion event before the amount is even forwarded. A professional coordinating a disbursement to a party whose local bank operates in a less liquid currency should expect the correspondent chain to be longer and the aggregate deduction to be higher. A bank with a direct nostro relationship can settle a payment in one to two steps instead of routing through three to five correspondent banks. Each extra hop typically adds $15–$35 in fees and one to two business days. Knowing the number of likely hops on a given corridor before initiating the wire is useful intelligence — and most originating banks will tell you if you ask directly. ## The MT103 as your audit trail When a recipient reports a shortfall, the MT103 is the document that tells the full story. During an international wire transfer, an intermediary bank routes the funds, checks regulatory compliance, and collects fees. The MT103 document is your best tool for tracking a wire transfer. It's the official SWIFT record and contains the routing path, reference numbers, and fee instructions. If a transfer is delayed or the recipient got less than expected, request the MT103 from your bank. It shows the complete picture. Field 71A of the MT103 shows the charge code — OUR, SHA, or BEN — that was applied to the transfer. If a payment lands short, request the MT103, check Field 71A for BEN, SHA, or OUR, then reconcile and request reimbursement if needed. The routing path visible in the document will show which correspondent banks handled the wire, and a careful read will often identify where the deductions were taken. The correspondent fee can be deducted at any stage of the process. It could be an outgoing transfer fee charged by your own bank, an intermediary fee from a correspondent bank, or even an incoming fee charged by the recipient's bank. Getting the MT103 promptly after a disputed disbursement is not just good practice — it is the only way to establish accountability across a multi-hop payment chain. ## Pricing correspondent fees into a deal before it closes The professional move is never to discover the correspondent-fee shortfall after closing. It is to price it in before. This means two things in practice. First, if a disbursement to a foreign party is at a fixed net amount — a commission, a seller's proceed, a referral payment — the outbound wire needs to be grossed up to anticipate the correspondent deduction, or the charge code must be OUR so the deduction does not touch the principal. Either approach works. What does not work is sending the exact contract number under SHA and hoping the routing happens to be cheap that day. Second, the instruction itself should be documented. Adding to invoices and contracts: "Please initiate payment with charge code OUR, Field 71A — beneficiary must receive full invoice amount without deductions" is language worth standardizing. It removes ambiguity at the sending institution and creates a paper record if a dispute arises later. On a $25,000 international wire from a major US bank to Europe, the total cost might include a $45 sending fee, $15–$25 in correspondent fees, $500–$1,000 in currency conversion markup if currencies are being converted, and a $10–$20 receiving bank fee. The headline fee often understates the actual cost of the transaction. When you are coordinating disbursements from a closing table that involves multiple international recipients, that arithmetic compounds across every outbound wire. ## Where onchain settlement changes the math Cryptocurrency transfers have no intermediary bank layer. The sender's wallet and the recipient's wallet transact directly on the blockchain, with no SWIFT involvement, no correspondent chain, and no hidden deductions. That structural difference is what makes onchain payment settlement meaningful for professionals managing international disbursements where precision matters. When a deal closes and proceeds need to land with several parties — some domestic, some across jurisdictions — the correspondent-fee problem is exactly the kind of structural friction that Shaka is built to remove. A professional sets up the payment link, defines each recipient's wallet address and their allocation percentage, and when the transaction executes, funds move to each wallet in a single onchain transaction. There is no correspondent hop between sender and recipient, no lifting fee taken in transit, and no shortfall to reconcile after the fact. The amount in the deal structure is the amount that lands. That certainty is not a small thing when a closing involves a foreign co-broker, an overseas seller, and an attorney all expecting specific net figures. The conversation about who got shorted is a conversation that does not need to happen. ## The reconciliation burden is real and recurring The downstream cost of correspondent-fee leakage is not only the dollar amount of the deductions. It is the administrative time spent chasing the discrepancies across time zones, the follow-up wires that each carry their own sending fee, and the erosion of counterparty confidence when professionals routinely deliver less than the agreed amount. The practical fallout lands on your accounts. Suppliers chase the shortfall, your team reconciles a payment that doesn't match the invoice, and someone has to decide whether to top up the difference. Multiply that across an international client base and the "free" part of a wire turns into recurring administrative friction. For brokers and agents handling international clientele, that friction is compounding. A buyer based abroad wiring closing funds through a correspondent chain, a co-broker in a different jurisdiction receiving a split commission, a seller repatriating proceeds to a foreign account — each of those wire legs is an independent leakage event, and the professional coordinating the closing is accountable for the net amounts every party receives, not just the gross amounts sent. The correspondent banking system exists because banks needed a way to move money across borders before a better infrastructure existed. It works, and it will keep working for a long time. But its fee structure is not a flat, transparent, pre-disclosed cost — it is a variable deduction taken mid-flight by institutions the sender never chose, on amounts the sender intended for someone else. Understanding that clearly, specifying charge codes deliberately, grossing up for anticipated deductions, and knowing which corridors run deeper than others is what separates professionals who close cleanly from those who spend the week after closing explaining why the numbers don't match.