For years, Indian exporters and freelancers have struggled with hidden charges when receiving international payments through traditional banking channels. Until recently, cross-border payments were slow, cumbersome, and heavily reliant on manual processes. Transaction charges remained high—sometimes reaching up to 8%, including forex markups, SWIFT/wire fees, platform fees, and service charges.
However, high transaction costs are just one part of the challenge. Exporters and freelancers often experience delays of up to a week before funds settle in their accounts. Cumbersome operational processes, unpredictable forex markups, and the inability to track payments in real time discourage businesses from scaling globally. For instance, if the market exchange rate is INR 84 per USD, banks may offer just INR 83—resulting in a loss of INR 10,000 on a $10,000 transaction.
These hidden costs eat into margins, disrupt cash flow, and create unnecessary friction in global trade. Banks, international fintechs, and payment gateways like PayPal impose charges ranging from 2% to 10%, covering forex fees, SWIFT/wire charges, and platform/service fees. It’s crucial for freelancers and exporters to understand these hidden costs and optimize their FX transactions.
Common Hidden Charges in International Payments
1. SWIFT / Wire Fees
A fixed or slab-wise fee deducted by the sender’s bank, typically $20 to $75. If the sender chooses to pass on this cost, the recipient receives a lower payout. For example, a $10,000 payment with $50 SWIFT charges results in a $9,950 payout.
2. Intermediary Bank Fees
Funds often pass through multiple banks during an international wire transfer, each deducting their own fees. If an intermediary bank deducts $200 on a $10,000 transaction, the recipient ultimately receives only $9,750. These deductions are often not disclosed upfront, leading to unpredictable payouts.
3. Forex Markup
This is where recipients lose the most money. Banks apply a hidden markup on the exchange rate. If the market rate is INR 84/USD, but the bank offers INR 82.50, this ₹1.50 to ₹2.00 (2%-2.5%) markup results in a loss of around $250 on a $10,000 transaction.
4. Conversion Fees / Platform Fees
Banks and payment platforms charge additional conversion fees on top of forex spreads, which can be either fixed per transaction or a percentage of the amount. Some platforms charge up to 4% for processing international payments into India.
5. Service Fees (FIRC & Others)
Some banks and fintech platforms impose undisclosed service fees, such as ₹200 to ₹500 per transaction for issuing a Foreign Inward Remittance Certificate (FIRC)—with some charging as high as ₹2,000 per transaction.
UPI has made domestic transactions seamless and cost-effective in India. It’s time for a similar model at the international level. While cross-border payment costs will always be higher due to currency risk, liquidity, and regulatory factors, the system can and should be more transparent.