Understanding international payment costs is essential for global business to thrive in 2025. Since 2017, cross-border payments have risen significantly – and are expected to reach $250 trillion by 2027. That’s an increase of over $100 trillion in just a decade, reflecting the accelerating pace of international trade.

With that surge comes more accessibility. Now, businesses of all sizes can source materials, pay overseas suppliers, and sell to global customers with just a few clicks.

But with this convenience comes cost. And often, it’s more than many businesses realise.

From hidden bank fees to unfavourable exchange rates and the route a payment takes to reach its destination, the true cost of international payments can quietly chip away at profit margins.

In this article, we’ll unpack the key costs involved, explain what’s really behind your payment fees, and explore how your business can reduce these costs using smarter solutions.

Table of contents

• What are international payment costs?
• The hidden costs of international transfers
• What are payment rails and why do they matter?
• Why do international payments vary in cost?
• A real-world example
• How Privalgo helps reduce international payment costs
• Why this matters for your business
• 10 FAQs about international payment costs for businesses

What are international payment costs?

International payment costs are the total expenses a business faces when sending money across borders. They typically include:

• Transaction fees
• Currency conversion charges (FX markups)
• Receiving bank fees
• Intermediary bank charges

For businesses that make regular international payments, these costs and potential delays from inefficient payment rails can quickly add up.

The hidden costs of international transfers

International payment costs aren’t always as clear as you might think. Let’s break them down.

FX rate markups: What to ask your provider

An area of international payments that can be costly and lack transparency is the exchange rate markup.

Most banks and providers tend not to give you the interbank rate – the rate you see on Google. Instead, they may apply a margin (or FX spread) on top.

Let’s say you’re converting £100,000 into euros:

• Interbank rate: 1.17 = €117,000
• Provider’s rate: 1.14 = €114,000
• Hidden cost: €3,000

That’s money off your bottom line – and it adds up fast.

To keep your costs under control, here are three crucial questions to ask your payment provider before you work with them:

What exchange rate will you be charging me?
– Ask for the exact FX spread, not just ‘competitive’.

What’s your exchange rate based on?
– Are you using the real interbank rate, or adding a margin?

Where can I see the spread and margin?
– It helps to ensure you know the margin and the rate you’re being charged.

At Privalgo, we believe transparency is key to building genuine, long-lasting relationships with our clients. That’s why our online platform shows you a live rate, including the margin we take on your currency exchange.

This way, you can rest assured you’re getting a competitive rate with no hidden fees.

Contact our team of Currency Specialists today to learn how our transparent, high-value rates can save your business money.

Transaction and handling fees

Most banks charge flat fees per international transaction. These are upfront fees charged by your bank or payment provider each time you send an international payment.

They can be fixed or variable depending on the currency, destination, and size of the transaction.

Traditional banks tend to charge higher transaction fees, especially for SWIFT payments, while fintech providers may offer lower or zero-fee alternatives.

In the UK, these fees usually range from £0 to £35.

If your business makes frequent international payments – whether it’s paying overseas suppliers, employees, or partners – these flat fees can quickly add up.

For example, if you send 20 payments a month at £25 each, that’s £500 a month in fees alone.

However, it’s important to look beyond just the visible fees, as they often make up only a fraction of the total cost.

Intermediary bank deductions

When sending money internationally via traditional networks like SWIFT, your payment may be routed through one or more banks (known as intermediary or correspondent banks) before it reaches its destination.

Each of these can deduct a handling fee, typically ranging from £11-£38 ($15-$50), but can vary significantly.

This can make it difficult to predict the true cost of a transaction and ensure your recipient receives the full expected amount.

Receiving bank fees

The bank on the receiving end of your transaction may also charge a fee to process your incoming funds.

These charges vary depending on the country, currency, and bank policy. In many cases, you won’t know the amount until after the transaction is completed.

Some banks also apply charges just to accept a payment. In the UK, these can range from £2-£7 or more, depending on the bank, currency, and method of delivery.

Receiving bank fees can reduce the final amount your supplier or partner receives, creating reconciliation headaches and the need for follow-up payments.

What are payment rails and why do they matter?

The payment rail is the route your money takes to get to its destination.

Some international payments – especially those travelling through older systems – can take several days to arrive.

These delays not only disrupt cash flow and supplier relationships but may also bring additional charges if a payment needs to be traced, amended, or expedited.

Most banks use the SWIFT network for international transfers. While SWIFT is reliable, it can be:

• Slower (1–6 working days)
• More expensive

Local payment rails, on the other hand, such as SEPA in Europe, ACH in the US, or Faster Payments in the UK, are:

• Faster (often same-day)
• Lower cost
• More transparent

Choosing the right rail for each transaction is key to minimising both delays and costs.

Want to learn more about payment rails? Read our article: What are payment rails and how do they work?

Why do international payments vary in cost?

The cost of sending money abroad depends on several factors, including:

• The currency and country you’re sending to
• The provider you’re using
• The size and frequency of your transactions
• The speed of the payment
• The method of delivery (SWIFT vs local)

For example, sending £10,000 to France via SEPA will likely cost less than sending the same amount to Brazil via SWIFT.

Some providers offer better rates for higher volumes, while others apply the same charges regardless of transaction size.

Read: What are restricted and exotic currencies?

A real-world example

Let’s say your UK-based business sends a £50,000 payment to a supplier in the US. The costs could be broken down as the following:

• Transfer fee: £0-£35
• FX rate margin (1.5%): £750
• SWIFT fee: £12-£25
• Receiving bank fee: £2–£7
• Total cost: £764–£817

That’s just one payment. Repeat that a few times a month and it could cost your business tens of thousands per year.

How Privalgo helps reduce international payment costs

At Privalgo, we help businesses reduce and control the cost of global payments. Here’s how:

Competitive exchange rates

Access 140+ currencies at live, competitive FX rates with transparent margins and no hidden markups.

Local payment rails

Thanks to our global network of banking counterparties, we’re able to access local payment rails in some jurisdictions, cutting down fees, improving speed and increasing transparency.

Dedicated human support

Your business with work directly with a Currency Specialist to help you optimise every payment and protect your costs.

Currency control

Take advantage of forward contracts to lock in rates or market orders to target favourable positions – helping you manage budgets more confidently.

Want to know more? Contact one of our Currency Specialists to learn how our international payment solutions can help your business scale further, faster.

Book a chat with a Privalgo Currency Specialist

Why this matters for your business

The early months of 2025 have been riddled with uncertainty. Trump’s tariffs are back – and bigger than before, shipping prices are volatile, and geopolitical risk is high.

For businesses managing international supply chains, keeping costs under control is essential. That means understanding, and minimising, the hidden costs of moving money around the world.

A proactive approach to FX and international payments could give your business:

• Healthier profit margins
• More predictable budgets
• Stronger supplier relationships
• A competitive advantage

At Privalgo, we help you take back control. Contact us today to learn how we can help your business grow in a year of uncertainty.

10 FAQs about international payment costs for businesses

Below are 10 frequently asked questions about international payment costs for businesses. Some answers use content already discussed in this article:

What are the types of fees for international payments?

International payment fees include more than just the transaction charge you see upfront. Common costs include:

• Transfer/transaction fees charged by your bank or provider
• FX markups (the margin added to the exchange rate)
• Intermediary bank deductions (if the payment goes via SWIFT)
• Receiving bank fees, deducted at the recipient’s end
• Additional costs for tracking, amending or speeding up payments

How much do UK banks charge for international money transfers?

UK banks typically charge between £0 and £35 per transfer depending on the destination, payment method, and size of the transaction.

SWIFT payments and exotic currencies often attract the highest charges. These fees are usually flat, meaning they stay the same regardless of how much you send.

What are typical international transaction fees?

Typical international payment fees include:

• Flat transfer fees (£0–£35 per payment)
• FX rate markups (can range from 0.5% to over 3% depending on the provider)
• Intermediary bank deductions (£11–£38 per bank along the chain)
• Receiving bank charges (£2–£7, depending on the bank in the UK)

These fees can quickly add up, especially if you make regular overseas payments.

Do I get charged for receiving international transfers?

Yes – in many cases, the recipient’s bank charges a fee just to accept the payment.

This fee depends on the bank, currency, and payment rail used.

These deductions are made from the received amount and can lead to shortfalls for your supplier or partner.

How do I minimise international transaction fees?

To reduce international payment fees:

• Send payments via local rails instead of SWIFT when possible
• Consolidate payments to reduce the number of charges
• Work with a provider that’s transparent about FX margins

Use smart solutions like market orders or forward contracts to lock in better rates

What is an FX markup and how does it affect my payments?

An FX markup is the margin added to the exchange rate you’re offered, compared to the interbank (mid-market) rate.

For example, if the interbank rate is 1.17 and you’re given 1.14, you’re effectively paying 2.5% more – which on a £100,000 transfer equals a £2,500 hidden cost.

At Privalgo, we show you the live rate and margin, so you know exactly what you’re paying.

Why did my recipient receive less money than I sent?

This is usually due to intermediary or receiving bank deductions. If your payment travels through the SWIFT network, one or more banks in the middle may deduct handling fees, often without notice.

Additionally, the recipient’s own bank may apply a fee for accepting the transfer.

How can I reduce the cost of international bank transfers?

Your business can keep international transfer fees at a minimum by:

• Using a provider that offers transparent FX rates with low spreads
• Sending larger, fewer payments when possible to reduce volume-based charges
• Use forward contracts or market orders.
• Choose local rails over SWIFT where possible

What are payment rails and how do they impact costs?

Payment rails are the systems through which money moves from one country to another.

• SWIFT is widely used but can be slow, costly and prone to hidden fees.
• Local rails like SEPA (Europe), ACH (US), or Faster Payments (UK) can be faster, cheaper and more transparent.

Choosing the right rail helps you avoid delays and excess charges.

At Privalgo, our extensive network of banking counterparties means we can process your payments through several routes, finding the most efficient and cost-effective rail.

How can Privalgo help my business reduce international payment costs?

We cut your international payment costs by offering:

• No multi-currency account fees
• Transparent FX rates with no hidden fees
• Access to 140+ currencies and fast local rails where available
• Dedicated Currency Specialists to optimise every payment
• Smart FX solutions to help you lock in rates and budget better

Get in touch with a Privalgo Currency Specialist today and discover how much your business could save.

 

This article is for information purposes only and should not be regarded as financial advice.