Sometimes when sending an international wire transfer, investors notice that the final amount received is less than what was sent. This usually happens because of intermediary bank fees.

What's Happening Behind the Scenes

When you send an international wire to a US bank, it must be routed through an intermediary bank. An intermediary bank is a bank that is not the final destination of the wire, but is used to route the wire to the final destination.

Cause 1: Intermediary bank left blank

Our partner bank, Grasshopper Bank, has a recommended intermediary bank that should be included in your wire instructions. Using this bank helps ensure your transfer reaches Grasshopper smoothly and without extra deductions. Failing to do so may result in the wire being routed through a different intermediary bank. These alternative banks often charge their own fees for processing and forwarding the wire.

Cause 2: Incorrect SWIFT field 71a

Wires made using the SWIFT network have a "71a" field that specifies who pays wiring fees. There are three options:

1. OUR. The originator pays all fees— both their bank and all intermediary/beneficiary bank charges.
2. SHA. The originator pays their bank's fee, and the beneficiary pays intermediary and receiving bank fees (this is the most common default in many corridors).
3. BEN. The beneficiary pays all fees, so they receive the transfer net of all deductions.

You are responsible for all fees incurred. For this reason, you should always use the OUR option.

Summary

Here's the no-frills, one-sentence version: make sure you enter the proper intermediary bank, and make sure to specify OUR as the SWIFT 71a code.

Questions? Contact us at team@seedlabs.com.