Currency Conversion and the Hidden Costs of Global Trade
Every day, businesses send hundreds of billions of dollars in payments through the global banking system. But many organizations fail to recognize how inefficient – and costly – this process really is.
Transaction costs may be relatively small on a per-transaction basis. But when one considers the sheer number and value of payments that are made each year, the tally of fees can reach into the billions of dollars.
According to our recent proprietary study, the average global premium charged to send a payment across borders is 3.39%. Depending on the region, this may affect anywhere from 4% to 25%–fully a quarter– of all transactions. Even when payments are made and received in a single currency, banks may charge significant administrative fees on each transaction.