International money transfers often involve more than just sending a payment from one bank to another. Each transaction passes through networks of institutions, conversions, and checks — and each step can add to the total cost. For businesses that send regular payments abroad or for individuals transferring money to family or suppliers, even small fees can accumulate over time. Understanding where these costs come from and how to avoid them can make global payments significantly more efficient.
What Makes International Transfers Expensive
Every international transaction usually includes several types of costs:
- Transfer fee — charged by the sending bank or payment provider for processing the transaction.
- Intermediary bank fees — added when payments travel through correspondent banks.
- Currency conversion margin — the difference between the real (mid-market) exchange rate and the rate offered by the provider.
- Receiving bank fee — some banks charge recipients for incoming international transfers.
These fees vary depending on the countries involved, the currencies exchanged, and the method used to send money.
Step 1: Compare Providers Before Sending
Traditional banks are reliable but often charge high fees for cross-border transactions. Specialized payment platforms and fintech providers have emerged as competitive alternatives. They use more direct routes or aggregated accounts to reduce costs and shorten processing times.
When comparing providers, look at three key indicators:
- Transfer fee — fixed or percentage-based.
- Exchange rate margin — often the hidden cost in “zero-fee” transfers.
- Delivery time — faster transfers sometimes cost more but may save on currency fluctuations.
It’s worth testing a few platforms for smaller transfers first to see how actual delivered amounts compare. Transparent services usually display the total cost and exchange rate upfront before confirmation.
Step 2: Use the Right Transfer Network
The network you choose has a strong impact on the final price.
- SEPA transfers (for euro payments within Europe) are typically free or low-cost.
- SWIFT transfers, used globally, can include multiple intermediary banks, which increases costs.
- Fintech networks such as Wise, Revolut, or Payoneer often bypass traditional SWIFT chains by using local settlement systems in each country.
Whenever possible, use local clearing systems. For example, a UK company paying a supplier in the US can avoid SWIFT if both have accounts with the same global fintech or banking group.
Step 3: Send in Local Currency When Possible
Choosing the right currency for the transfer can significantly reduce conversion fees.
If the recipient needs to use funds in their local currency, it’s often better to convert before sending. That way, the sender can select a provider offering a favorable exchange rate, rather than relying on the recipient’s bank to perform the conversion at unknown terms.
Conversely, if the recipient holds a multi-currency account, sending in the original currency (USD, EUR, GBP) can help avoid double conversion. Always confirm with the recipient how they prefer to receive funds.
Step 4: Consolidate Transfers to Reduce Frequency
Every transaction, no matter how small, carries a base fee. If your business makes frequent small payments to the same foreign partner, consider consolidating them into larger, less frequent transfers.
This approach reduces the number of fixed fees and sometimes qualifies for lower volume-based rates. Some banks or fintech providers offer batch payment tools that allow grouping multiple transactions into one instruction while maintaining individual references for accounting.
Step 5: Monitor and Optimize Exchange Rates
Exchange rates fluctuate daily. Even a small shift — for example, 0.5% — can affect the total cost when sending large sums.
To minimize losses:
- Track currency trends and plan payments when rates are favorable.
- Set rate alerts with your provider to get notified of beneficial changes.
- Use forward contracts or multi-currency wallets to lock in exchange rates for future payments.
Businesses with regular cross-border obligations often work with currency specialists who offer hedging tools to stabilize costs.
Step 6: Avoid Unnecessary Intermediaries
Each intermediary bank in a SWIFT transaction can deduct a fee, sometimes without clear visibility. When setting up a transfer, ask your provider if the payment can go directly to the recipient’s bank or through a shared correspondent to reduce the number of middlemen.
Large international banks and fintech platforms often have their own correspondent network, allowing them to handle settlements internally and avoid third-party charges.
Step 7: Choose the Correct Fee Structure (OUR, SHA, BEN)
SWIFT transfers usually include three fee options:
- OUR — sender pays all fees; the recipient receives the full amount.
- SHA — fees are shared; each party pays their bank’s cost.
- BEN — recipient pays all fees; the sender’s payment is reduced by intermediary charges.
For business transactions, the OUR option ensures the full invoice amount is credited, avoiding reconciliation issues. However, when transferring personal funds, SHA is often more economical.
Step 8: Keep Recipient Details Accurate
Delays and corrections are another source of hidden costs. Incorrect IBAN, BIC, or beneficiary names can cause rejections, leading to extra service fees. Always double-check account details with the recipient before confirming a transfer.
Some institutions now offer IBAN verification tools that detect format errors automatically before submission. Using these tools prevents unnecessary administrative expenses.
Step 9: Take Advantage of Digital Platforms
Digital-first providers use automated compliance checks and blockchain-based settlement to reduce manual processing and cut costs. They also offer transparent dashboards that show where each fee is applied.
For companies managing multiple currencies and clients, using an API-integrated payment solution simplifies reporting, reduces bank charges, and improves reconciliation accuracy.
In addition, fintech platforms typically settle transactions faster, minimizing the risk of rate changes during the transfer period.
Step 10: Maintain Relationships With Partner Banks
For businesses that make frequent international transfers, maintaining consistent relationships with partner banks can result in preferential terms.
Banks often assign account managers for corporate clients who can provide lower FX margins, faster processing, or custom fee packages. Periodically reviewing these terms ensures that your business remains on the most competitive pricing model.
Hidden Factors That Affect Fees
Even when official fees seem low, a few hidden elements can increase the total cost:
- Cut-off times: Transactions sent after the daily deadline may roll over to the next day, extending settlement time and exposure to rate changes.
- Intermediary currency conversions: If a payment passes through a bank that does not support the direct currency pair, it may convert funds twice.
- Regulatory requirements: Additional documentation for high-value payments can slow processing and add service costs.
Understanding these details allows senders to prepare documents and choose optimal transfer windows.
The Future of Lower-Cost International Transfers
Technology is rapidly changing how cross-border payments work. Instant settlement systems, multi-currency wallets, and blockchain-based corridors are reducing reliance on correspondent banks and making transfers faster and cheaper.
At the same time, global financial authorities are encouraging transparency. Initiatives such as G20 Roadmap for Enhancing Cross-Border Payments aim to standardize regulations and promote competition between providers.
The trend is clear: fees will continue to decline as technology improves efficiency and access widens beyond traditional banking networks