Why did I receive less than the invoice amount on an international payment?

Three things can take a slice: the charge code on the payment, the correspondent banks it passes through, and the rate your own bank used to convert it. Under the SHA code, which is mandatory for payments inside the EU, each side pays its own bank and any intermediary deducts from the transfer. Outside the EU the sender may choose OUR, in which case they carry every charge and you receive the full amount.

Billingz Guides · Payments

SEPA, SHA, OUR and BEN: what happens to an international payment

Short answer

A payment does not travel in a straight line. Between your client’s bank and yours there can be a charge code, one or more banks in the middle, a currency conversion, and in some countries a document your bank wants before it releases the money. Inside the EU the charges are shared by law and nobody chooses. Outside it, somebody chooses, and that choice decides who absorbs the cost.

What SEPA is

SEPA is the Single Euro Payments Area. Inside it a euro transfer between two participating countries behaves like a domestic one: the same IBAN format, the same price as a local payment, and arrival within a defined time. It covers the EU and the EEA plus several others, including the United Kingdom and Switzerland.

Two details are worth holding on to. SEPA applies to euro only, so a payment in another currency between the same two banks is not a SEPA transfer even though it crosses the same border. And SEPA is why an invoice to a client in Lisbon costs almost nothing to collect, while the same invoice to a client in Toronto does not.

The three charge codes

Every cross-border instruction carries a code saying who pays the banks. There are three, and the sender picks.

SHA, shared - the sender pays their bank, you pay yours, and any bank in between deducts from the transfer. The default almost everywhere.
OUR, sender pays all - the sender carries every charge, including the intermediaries, so the full invoice amount should reach you. Costs the sender more, which is why it is worth asking for only on larger invoices.
BEN, beneficiary pays all - every charge comes out of the money itself. You receive the least. Rare, and never something to agree to without knowing.

Inside the EU nobody chooses

Article 62(2) of the Payment Services Directive settles it: where both banks are in the Union, the payee pays the charges of their own provider and the payer pays theirs. That is SHA, applied by law, and no one can select OUR or BEN instead.

So a charge-bearer line on an invoice to a client in Germany or Poland is noise. It means nothing there, and printing it suggests the document was assembled without knowing where it was going. The codes belong on invoices that leave the Union, and nowhere else.

Correspondent banks, and the slice each one takes

Banks do not all hold accounts with each other. When yours and your client’s have no direct relationship, the payment is handed along through one or more intermediaries that do. Each of those can deduct a fee as it passes the money on.

Inside SEPA this barely happens, which is the point of the scheme. Money coming from another continent may cross two or three banks, and under SHA each deduction comes out of the amount rather than being billed to anyone. That is why an invoice genuinely paid in full can land visibly short, and why the shortfall is unpredictable in advance.

Why less money arrives than was paid

There are only three explanations, and they are not the same thing.

Bank charges - your own bank's fee, plus whatever the correspondents took on the way. A cost of doing business, and deductible as one.
An exchange rate difference - the payment was converted into your currency at your bank's buying rate rather than the official one. Covered in its own guide.
A short payment - the client sent less than was asked. The only one of the three that leaves the invoice open.

The first two close the invoice. The client has paid. Treating either as an unpaid balance and chasing them for it is the mistake worth avoiding, and it happens often.

The second one has a guide of its own, since the arithmetic behind it catches people out on every currency they touch: exchange rate differences.

When the bank holds the money until you explain it

In countries that still operate currency controls, an incoming foreign payment does not always land in your account by itself. The bank may hold it and ask you to state and document the basis for the inflow before releasing it.

The invoice - the document the payment relates to, which is the usual first request.
A contract or agreement - for recurring work or larger amounts, some banks want the underlying agreement too.
A stated basis of inflow - a short declaration of what the money is for, often on the bank's own form.
An instruction to convert - where foreign currency cannot simply sit in the account, you tell the bank to sell it into local currency.

None of this means anything has gone wrong. It does mean the money can sit for days while you are unaware, so it is worth knowing your own bank’s habit before it costs you a week. Keeping the invoice to hand as a PDF turns the whole thing into a five-minute errand.

IBAN or local account number

Several countries run a domestic account number alongside an IBAN, and locals use the short one out of habit. A foreign payment sent to a domestic number is delayed, returned, or quietly stuck.

So the rule is simple: the invoice carries the IBAN, and the BIC where the sending form asks for one. Keep the domestic number for domestic clients. Where your country has more than one, publish the one that works for whoever is reading that particular invoice.

What belongs on the invoice

IBAN and BIC - always, on anything that might be paid from abroad.
A payment reference - the invoice number, so the money can be matched when it lands without you guessing.
A charge code, only outside the Union - and only if you have agreed it. Inside the EU it is meaningless, because the law has already decided.
Nothing about correspondent fees - you cannot predict them and promising anything about them creates an argument you will lose.

Common questions

What do SHA, OUR and BEN actually mean?

They say who pays the banks. SHA splits it: the sender pays their own bank, you pay yours, and any bank in between takes its cut from the transfer. OUR means the sender pays everything, so the full amount should reach you. BEN means every charge comes out of the money itself, so you receive the least. The code travels with the payment instruction and the sender chooses it.

Can my client choose OUR so I receive the full amount?

Outside the EU, yes, and it is worth asking for on larger invoices. Inside the EU they cannot. Article 62(2) of the Payment Services Directive requires that each side pays its own bank's charges on payments where both banks are in the Union, so SHA applies whether anyone chooses it or not.

What is SEPA and why does it make transfers cheap?

SEPA is the Single Euro Payments Area: a common scheme in which a euro transfer between participating countries works like a domestic one, on the same IBAN format, at the same price, within a defined time. It covers the EU and the EEA plus several others including the United Kingdom and Switzerland. It applies to euro only. A payment in another currency between the same two banks is not a SEPA transfer, even though the charge rules still apply.

Why does money from outside Europe arrive smaller?

Because it travels through correspondent banks. When two banks hold no direct relationship, the payment passes through one or more intermediaries, and each may deduct a fee on the way. Under SHA those deductions come out of the amount. This is why an invoice paid in full from another continent can land noticeably short, and it is a fee rather than an exchange rate difference.

My bank is asking for a contract before releasing the money. Is that normal?

In several countries, yes. Where currency rules apply, a bank may hold an incoming foreign payment until you state and document the basis for it: the invoice, a contract, sometimes a written explanation, and in some cases an instruction to convert the currency. The money is not lost, it is waiting for you. Expect it, and keep the invoice ready to send.

Should I give a client my IBAN or my local account number?

For anyone paying from abroad, the IBAN, with the BIC where the form asks for it. Several countries run a domestic account number alongside the IBAN, and a foreign payment sent to the domestic number is delayed or returned. The two are not interchangeable, so publish the IBAN on the invoice and keep the local number for domestic use.

Built for this

Billingz puts the right payment details on the document for the country it is going to, and records what actually arrived rather than what should have, so your cash position matches your bank.

See how Billingz handles invoices

This guide is general information, not banking, tax or legal advice. Billingz is not a payment service provider and does not send, hold or receive money on your behalf. References to the Payment Services Directive are to Article 62(2) as in force in September 2026. Scheme membership, bank practice and national currency rules vary and change over time; Billingz does not warrant that this page reflects the position on the day you read it. Confirm specifics with your bank or a qualified adviser.