BEN (Beneficiary Pays All Charges)

TL;DR

BEN (Beneficiary Pays All Charges) is a payment instruction where the recipient (beneficiary) bears all transaction fees associated with the transfer. This method is commonly used in international payments. While it can reduce costs for the sender, it may result in the beneficiary receiving less money than expected due to deducted fees. Though straightforward, the method faces criticism for lack of transparency and potential complications in cross-border transactions.

Brief Definition and Origin

BEN (Beneficiary Pays All Charges) is a payment method where the recipient is responsible for paying all associated fees, including charges from intermediary and recipient banks. This practice originated to streamline international payments by clearly assigning the responsibility for transaction costs.

Current Usage and Importance

BEN is widely used in international money transfers and cross-border payments, where the sending and intermediary banks charge fees that are deducted from the final amount received by the beneficiary. It is important for businesses managing international trade and remittances, as it allows the sender to know the exact amount debited from their account.

Stakeholders and Implementation

Key stakeholders include banks, businesses, remittance services, and individuals involved in cross-border transactions. The implementation of BEN involves intermediaries such as correspondent banks, which often levy additional charges. This can pose challenges in transparency and clarity regarding the final received amount.

Advantages vs. Disadvantages of BEN (Beneficiary Pays All Charges)

Advantages:

  1. 1. Simple for the sender, who pays no additional fees.
  2. 2. Clear-cut division of responsibility for transaction costs.

Disadvantages:

  • 1. The recipient receives a lower net amount.
  • 2. Lack of transparency can lead to disputes over the final amount received, especially in multi-intermediary transfers.

Future Outlook

As the demand for more transparent and cost-effective cross-border payment methods grows, alternative systems like blockchain and decentralized finance (DeFi) may challenge the prevalence of BEN by offering lower fees and increased clarity. However, BEN is likely to remain in use, especially in traditional banking.

Further Reading

For more in-depth analysis, refer to the SWIFT Payment Guide or your bank’s international payment terms documentation.

—

This page was last updated on March 11, 2025.

–

Related posts:

  1. Card Processing for your Money Transfer Business
  2. It’s mentioned that “the funds will be kept in the custodian accounts with the EMI, which has opened with particular banks”, how are we supposed to withdraw that fund to our bank account?
  3. Can we start with our Mauritanian company?
  4. We have established a money transfer company in Canada and now we are looking for a bank in the US and want to be its Authorized Delegate in the USA for money transfer services.
  5. Are armored carriers allowed to pick up cash from Bitcoin ATM Operators and deposit it into their vault account and then transfer it over to our account?