The Hidden Costs of Sending Money Abroad
When transferring money internationally, banks often advertise "Zero Fees" while hiding the true cost in poor exchange rates. This practice is known as an exchange rate markup or spread.
How the True Cost is Calculated
- Flat Fees: The upfront fee charged by the sender or receiver bank (e.g., $15 outgoing wire fee).
- Exchange Rate Spread: The difference between the mid-market rate (the real exchange rate) and the rate offered by the provider.
- Total True Cost = Flat Fees + (Spread % × Transfer Amount)
Bank vs Fintech Comparison
Traditional banks typically charge a flat fee plus a markup of 3-6% on the exchange rate. Modern fintech services (like Wise or Revolut) often charge no exchange rate markup, using instead a transparent, slightly higher upfront flat fee. Our calculator helps you compare these models to find the cheapest route for your specific transfer amount.