You’ve probably heard enough bad stories about intermediary bank fees and currency conversion.
But how far can it go? Here’s a good example provided by the Bank of Canada. According to the 2026 paper, banks in the Canadian cross-border business payment sample quoted total margins of around 2–3.5%, mostly from currency conversion.
Meaning, on a €10,000 payment, a 2% total cost would equal €200. If the payment value is higher and you do dozens or hundreds of transactions, it is even worse. The amount would be unacceptable for many.
Can you reduce intermediary bank fees when it comes to cross-border payment rails? Often, yes. Comparing providers, avoiding unnecessary currency conversions, and choosing a suitable payment route can help you avoid overpaying.
The hidden cost of international payments: FX markups and intermediary deductions
The correspondent banking chain
Correspondent banking is a long-established way of making international payments. When your bank and the recipient’s bank have no direct relationship, the payment may travel through one or more intermediary banks.
These banks process cross-border payment rails through existing arrangements. Each intermediary may charge a processing fee, which can make the final cost harder to predict.
OUR, BEN, and SHA instructions specify who pays the transfer charges: the sender, the recipient, or both. But they don’t set the size of those charges or control the exchange rate. Depending on the payment route and charging instructions, the sender may face additional costs, or the recipient may receive less than expected.
Currency conversion can add another cost. The institution converting the funds applies an exchange rate that may include a markup. A payment doesn’t necessarily undergo conversion at every bank, but unnecessary conversions can increase the overall expense.
You can often reduce these costs by comparing providers, checking the full conversion cost, and choosing a suitable payment route.
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The cost of involuntary currency conversions
Very basic example: your account is in EUR, and you have business partners with USD bank accounts.
Let’s say one of them paid you – the bank converts the incoming dollars to euros. Later, you pay another US-based supplier, so banks convert euros back to dollars.
That means two conversions, potentially paying an exchange-rate markup each time. If your payments involve other currencies, unnecessary conversions can add even more costs.
This is why we strongly recommend that all our current and potential clients use a multi-currency account solution.
SWIFT fee instructions compared: OUR, BEN, SHA
OUR, BEN, SHA instructions are not gibberish or an encrypted code. Every SWIFT payment includes a charge code that determines who pays intermediary bank fees along the way.
The OUR, BEN, SHA instructions work like this:
Code | Who pays intermediary fees? | Final amount received | Best use case |
OUR | Sender covers all costs | Exact invoice total | Critical vendor payouts, payroll, tax settlements |
BEN | Beneficiary absorbs all costs | Invoice total minus deducted fees | Disputed settlements, non-essential payouts |
SHA | Shared: sender pays the sending bank, receiver covers intermediary and receiving bank | Variable amount minus intermediary cuts | Standard B2B trade, recurring vendor payments |
Breakdown of OUR, BEN, SHA instructions
OUR. You pay all transfer fees, including intermediary and receiving-bank charges. It allows you to ensure that the beneficiary receives the full amount, but such a scheme isn’t guaranteed on every payment route. This matters when even a cent less would cause a problem, such as when paying an invoice that must arrive in full.
BEN. The beneficiary pays all transfer charges, including the sending bank’s fee, intermediary fees, and receiving-bank charges. These deductions can leave them with less than the amount you sent, so agree on this option with the recipient beforehand.
SHA. A common charging option. You pay your own bank’s charges, while the beneficiary covers receiving-bank charges and, where applicable, intermediary fees. These deductions can reduce the amount received and leave the recipient short.
Strategic selection: choosing the right code for your cash flow
Ideally, you should be able to choose OUR, BEN, SHA instructions based on the contract. But some banks don’t have all options available and can’t allow clients to select the desired SWIFT charge type.
If you can choose, this is when to use each instruction:
Use OUR for international payroll and for suppliers with strict contracts. The cost is small compared with a rejected payment or a late shipment.
Use SHA for ordinary commercial payments where both sides accept some fees.
Skip BEN unless there’s a written agreement behind it.
However, these instructions are not a panacea for overpaying for services.
Payment rails compared: SWIFT vs local clearing networks
SWIFT: global coverage across border barriers
The SWIFT network reaches 200+ countries and thousands of institutions, and it handles most currencies.
If you’re doing business in Brazil, Taiwan, or India, SWIFT is your main option.
Alternatively, you can use local payment rails. Still, it is important to distinguish truly local variants from, for example, SEPA, which was built for the entire European Union.
SEPA and local clearing rails: low-cost, domestic-speed clearing
When people talk about local payment rails, they usually mean a more cost-effective way to pay compared to SWIFT. This is what the dual-rail routing advantage is all about.
Let’s get more into the SWIFT vs. SEPA comparison. For SEPA, fees are low, clearing is standardized, and SEPA Instant Transfers settle in seconds across the 41-member SEPA zone.
As for the limitation, it is built for cheap euro transactions, but doesn’t handle other currencies, which is the main disadvantage.
In the SWIFT vs. SEPA comparison, neither side wins outright. They solve different problems right now – SEPA is available for any euro payment, while SWIFT can be used as a bonus solution for European companies.
The dual-rail routing advantage: balancing cost, reach, and liquidity
The dual-rail routing advantage is as simple as the name suggests. You can use both rails from one setup and let each payment take the cheaper or fastest way available. Genome allows just that, offering businesses both SEPA and SWIFT transfers!
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Intelligent rail selection based on geography and currency
In the EU, businesses use SEPA and SEPA Instant Transfers for most euro transactions. They are cheap, fast, and reliable. According to the European Payments Council, SEPA schemes facilitate over 50 billion euro transactions annually across the SEPA area, including more than 29 billion credit transfers and 21 billion direct debits.
But SWIFT remains an important option. First, not all EU countries have adopted the euro yet – the dollar and other currencies reach all over the world. And, as a business, you may also want to expand your reach beyond the SEPA zone.
The key technical requirement is connectivity to payment providers and their APIs. The business must have access to the relevant rails through its bank or payment service provider.
To use both SEPA and SWIFT through one provider, choose one that supports both, as Genome does.
While SWIFT serves as Genome’s primary network for international transfers, its platform features a built-in Intelligent Routing System applied to all outgoing cross-border payment rails. The system automatically analyzes each transaction to determine if a cheaper and more efficient alternative rail, such as Faster Payments, CHAPS, or TARGET2, is available instead of SWIFT. When an alternative route is used, the transfer fee is automatically adjusted, ensuring your business gets the most cost-effective execution without manual intervention.
Multi-currency accounts as the operational bridge
Cross-border payment rails solve the payment problem. Currency is still an open question.
As a solution, we offer multi-currency accounts in EUR, USD, GBP, PLN, CHF, JPY, CAD, CZK, HUF, SEK, AUD, and DKK, so you can receive, hold, and send SWIFT transfers in these currencies.
This allows you to invoice international clients and settle supplier bills directly in their preferred currencies without triggering automatic, costly currency conversions.
Streamline your international treasury with Genome
Companies should focus on business, not guess which payment rail is the best. Inside Genome, businesses get access to SEPA Instant and Credit Transfers automatically and can be eligible for SWIFT transfers.
Here’s what you can get:
SWIFT transfers. Genome SWIFT transfers cover incoming and outgoing payments to over 160 countries and territories.
SEPA and SEPA Instant. Low-cost, real-time, all-round superior payments for any euro transaction.
Internal transfers. Free, instant payments between Genome account holders anywhere in the world.
Multi-currency accounts. Dedicated EUR IBAN account unlocks access to multi-currency accounts in 12 currencies, all available for SWIFT transfers.
Open your Genome business account and see for yourself.
