Cross-border fees: Types, costs & how to reduce them (2026)

Key takeaways

• Cross-border fees are charges businesses pay when processing transactions across different countries. They typically include card network assessment fees, currency conversion fees, and exchange rate margins.

• Card networks like Visa and Mastercard charge between 0.6% and 1.4% per cross-border card transaction, depending on the network and settlement currency — and these fees stack on top of regular processing costs.

• You can significantly reduce cross-border fees by using local currency accounts, accepting local payment methods, and choosing a provider like Airwallex that offers interbank FX rates with a small, transparent margin.

Cross-border fees are among the most overlooked costs for businesses that operate internationally. Every time you process a payment from a customer in another country, accept a foreign-issued card, or transfer money overseas, fees from card networks, banks, and intermediaries eat into your margins.

Global eCommerce revenue is projected to reach US$6.48 trillion by 2029, growing at an annual rate of 7.83%.¹ As more businesses sell and pay across borders, these fees add up fast.

Below, we break down the different types of cross-border fees, how much they cost, and who charges them. We also share practical ways to reduce them so you can keep more of what you earn.

What are cross-border fees?

Cross-border fees are charges that businesses pay when processing transactions between different countries. They apply when a customer pays with a card issued by a foreign bank, when a payment involves currency conversion, or when money moves through international banking networks.

These fees come from different sources — card networks, banks, and payment processors — and they often stack on top of each other. Understanding what each fee covers is the first step to controlling your costs.

Types of cross-border fees at a glance

These are representative rates published by card networks; exact rates may vary by region.

Cross-border fees vs foreign transaction fees

These terms are often used interchangeably, but they are not the same thing.

A cross-border fee (sometimes called a cross-border assessment or international service assessment) is charged by card networks like Visa and Mastercard. It applies when the merchant's acquiring bank and the customer's issuing bank are in different countries. This fee is triggered by the location mismatch alone, even if both parties use the same currency.

A foreign transaction fee is a broader term that typically refers to the total bundle of charges a bank or card issuer applies to international purchases. It often includes the cross-border assessment, the currency conversion fee, and any exchange rate margin — rolled into a single line item on a statement.

In short, cross-border fees are one component of foreign transaction fees. When reviewing your statements, look for line items labelled "international service assessment," "cross-border fee," or "foreign transaction fee" to understand exactly what you're paying.

Foreign transaction fees

A foreign transaction fee is a fee that financial institutions charge when they process a transaction through a foreign bank or when the transaction involves a foreign currency. This fee is a percentage — usually 1%–3% — of the total transaction amount.

It typically includes two components:

• An issuer fee (charged by the customer's card-issuing bank for any international transaction, even without currency conversion)

• A currency conversion fee (if the payment requires converting one currency to another)

Currency conversion fees

Financial institutions charge currency conversion fees when a transaction requires conversion from one currency to another. This fee is usually a fixed amount or a percentage of the transaction amount.

Currency conversion fees cover the costs and risks of fluctuating exchange rates, as well as the operational cost of converting currencies. When you receive or send money in a currency different from your account's default currency, your bank may charge this fee.

Some banks automatically convert funds to your default currency before settling them in your account — even if you prefer to hold the original currency. This forced conversion leads to unnecessary fees.

Exchange rate margin

On top of the currency conversion fee, there is often an exchange rate margin. This is not a separate fee, but a markup added to the interbank rate. The interbank rate is the rate that banks and financial institutions use when trading currencies with each other. It is usually not available to the public.

For example, if the interbank rate for USD to EUR is 0.9 (meaning US$100 buys €90), a financial institution might offer you a rate of 0.8 instead. For the same US$100, you would only receive €80 — and the institution keeps the €10 difference.

Because this cost is built into the exchange rate itself, it is not always obvious. It can be one of the largest hidden costs in cross-border payments.

Wire transfer fees

When you send money internationally via a wire transfer, such as SWIFT, banks charge a wire transfer fee. This fee can vary depending on the institution and the transfer amount.

Wire transfer fees are sometimes a flat fee (typically US$10–US$50 per transfer) and sometimes a percentage of the total transaction amount. They cover the cost of moving money through international banking networks, including compliance with legal requirements.

For businesses in Singapore, outgoing wire transfer fees at major banks like DBS, OCBC, and UOB typically range from S$20 to S$30 per transaction, with incoming transfer fees around S$10.

Other fees

Depending on your bank or payment provider, there may be additional fees involved in cross-border transactions. These can include:

• Receiving fees: Your bank may charge a fee to receive a payment in a foreign currency.

• Outgoing fees: Your bank may charge a fee for sending money internationally.

• Correspondent bank fees: If your financial institution uses intermediary banks to route a cross-border payment, each intermediary may deduct a fee — typically US$10–US$30 per bank — before the funds reach the recipient.

• Other charges: Non-delivery fees for returned payments, compliance fees to cover international regulations such as anti-money laundering laws, and general service fees.

When assessing a payment provider for cross-border payments, check for all of these fees — not just the headline rate.

When and why are cross-border fees charged?

Cross-border fees are triggered when the merchant's acquiring bank and the customer's card-issuing bank are in different countries. Card networks like Visa and Mastercard determine this based on two things:

• Where your business is registered — the country tied to your merchant account.

• Where the customer's card was issued — the country of the card-issuing bank.

If these two countries differ, the transaction is classified as cross-border, and additional fees apply. This is true even if no currency conversion takes place.

For example, if a customer in Europe uses a European-issued credit card to buy from your Singapore online store, you will be charged cross-border fees on that transaction.

These fees exist because international transactions are more complex than domestic ones. They involve multiple banking networks, cross-jurisdictional compliance, and — in most cases — currency conversion. Card networks charge cross-border fees to cover:

• The cost of routing payments through international banking networks

• Foreign exchange risk management

• Fraud prevention and security across different regulatory environments

• Compliance with anti-money laundering and other international regulations

If your business operates internationally, cross-border fees are difficult to avoid entirely. But the right setup can reduce or even eliminate these fees. We cover how in the section below.

How much are cross-border fees?

Cross-border fees vary by card network, payment method, and settlement currency. Below is a breakdown of the current rates.

Cross-border fees by card network

Each card network sets its own cross-border assessment fee. These are non-negotiable and apply on top of standard interchange and processing fees.

The information in this table has been reviewed to be accurate as of 15 April 2026.

A few things to note:

• Mastercard charges 0.6% when a transaction involving a foreign-issued card is settled in USD, and 1.0% when settled in a non-USD currency. Mastercard introduced this fee in 2006 at 0.10% and has increased it several times since.²

• Visa calls its cross-border fee the International Service Assessment (ISA). The current rate is 1.0% for USD-settled transactions and 1.4% for non-USD transactions. Visa also charges a separate International Acquirer Fee (IAF) of 0.45%, which stacks on top of the ISA.³

• Discover charges a flat 0.8% regardless of settlement currency, plus a separate international processing fee of 0.55%.⁴

• American Express charges approximately 0.40%, though the exact fee varies by region and is often bundled into a broader international assessment.⁴

These rates apply to the merchant (i.e. your business). They appear on your processing statement — sometimes labelled "cross-border fee," "international service assessment," or "foreign transaction fee."

Cross-border fees by payment method

Beyond card network fees, your total cross-border cost depends on the payment method used.

The information in this table has been reviewed to be accurate as of 15 April 2026.

For Singapore businesses, bank wire costs are worth watching. Outgoing SWIFT transfers at major Singapore banks typically cost S$20–S$30, with an additional FX margin of 1%–3% applied on top. Incoming international transfers generally incur a flat fee of around S$10.

These costs add up quickly for businesses making regular international payments.

How cross-border fees add up: an example

Here is how cross-border fees can accumulate on a single transaction when exchange rate margins and currency conversion fees are involved.

Scenario: Your Singapore-based business receives US$100 from an overseas customer and converts it to SGD. The interbank rate is 1.35 (US$100 = S$135).

Option A: A typical financial institution (marked-up rate + 2% conversion fee)

In this example, the exchange rate margin alone accounts for S$10 of the total cost — four times the currency conversion fee. This is why exchange rate margins are often the largest hidden cost in cross-border payments.

Now compare this to a provider that offers interbank rates with a small, transparent margin:

Option B: A provider offering interbank rates with a 0.5% margin

The difference between both providers is S$11.83 on a single US$100 transaction. At scale — say US$100,000 in monthly cross-border payments — that gap becomes over S$11,800 per month.

How to reduce cross-border fees

Cross-border fees can eat into your margins, but they are not fixed costs you have to accept. With the right setup, you can reduce them significantly — or avoid certain types altogether. Here are four practical ways to do it.

Use local currency accounts to receive multi-currency payments

When you use a local currency account to accept payments in the same currency your customer pays in, you skip the currency conversion step entirely. No conversion means no FX fees.

For example, if you sell to US customers, you can collect their payments in USD and hold those funds in a USD account. You can then use that same USD balance to pay for US-based subscriptions, ad spend on platforms like Google or Meta, or US suppliers — all without converting to SGD and back again. Every conversion you avoid is a fee you don't pay.

Local currency accounts let you do this across multiple currencies. You receive, hold, and spend in the same currency — converting to SGD only when you choose to.

Traditionally, setting up local bank accounts in multiple countries requires extensive paperwork and a local business presence. But modern fintechs now let you open local currency accounts remotely, so you can receive and hold multiple currencies without forced conversions and fees.

Look for transparent FX rates and lower markups

When your business does need to convert currencies, the exchange rate you get makes a big difference.

Most banks and payment providers don't give you the real exchange rate — known as the interbank rate. Instead, they add a markup on top. This markup is often 1%–3%, but because it's built into the exchange rate itself, it's not always obvious. You might see "no conversion fee" advertised, but still lose 2%–3% on every conversion through a poor rate.

With this in mind, look for providers that pass on rates very close to the interbank rate, adding only a small, transparent margin — typically 0.4%–1%. The key difference is transparency: instead of hiding a large markup in the rate, they show you the margin upfront. You can see exactly what you're paying.

As the worked example above shows, the gap is significant. A provider offering interbank rates with a 0.5% margin saves you S$11.83 on every US$100 converted, compared to a typical institution charging a marked-up rate plus a 2% conversion fee. At US$100,000 in monthly conversions, that's over S$11,800 saved.

Look for a provider with direct connections to payment networks

Every intermediary involved in a cross-border transaction adds a fee. When you choose a payment provider with direct connections to card networks and local payment rails, you can bypass intermediary banks and reduce the number of fees stacking on each transaction.

This matters most for international transfers. Sending money via SWIFT often involves one or more correspondent banks, and each deducts US$10–US$30 before the funds reach the recipient.

A provider that routes payments through local payment rails instead of SWIFT can eliminate these intermediary fees entirely, and deliver funds faster.

Why Singapore businesses choose Airwallex for their cross-border transactions

With Airwallex, you can reduce cross-border fees across payments, transfers, FX, and spend — all from a single platform. Here’s what you get with Airwallex:

Receive payments like a local, wherever you operate

Global Accounts let you open local currency accounts with local bank details in 20+ countries — without the hassle of setting up traditional bank accounts in each location. Accept funds in your customers' currencies, hold them in your multi-currency Wallet, and use those same balances to pay suppliers. This way, you avoid forced conversions and the FX fees that come with them.

Cut FX costs with interbank rates

Airwallex gives your business access to interbank exchange rates with a small, transparent margin on top (between 0.4% to 0.6%). With market-leading rates, you can save up to 80% on FX fees compared to traditional banks.

Skip SWIFT fees on international transfers

With Airwallex, you get free transfers to 120+ countries via local rails. 93% of transfers on Airwallex arrive on the same working day.

Accept 160+ local payment methods

Offer your customers their preferred payment methods — from cards and wallets to local bank transfers — across 180+ countries. Airwallex Payments helps you save on foreign transaction fees and processing fees while boosting checkout conversion.

Spend globally without hidden fees

Airwallex Corporate Cards let your team make purchases in multiple currencies directly from held balances, with 0% foreign transaction fees and no hidden charges.

Manage everything in one place

Whether it's accepting cross-border payments, paying international suppliers, or managing business expenses, you can do it all on one platform — no more juggling between providers.

Frequently asked questions (FAQ)

What is a cross-border fee?

A cross-border fee is a charge applied by card networks like Visa and Mastercard when a transaction involves a merchant in one country and a cardholder's bank in another. It applies even if both parties use the same currency. For card transactions, cross-border fees typically range from 0.6% to 1.4% of the transaction amount, depending on the card network and settlement currency. Businesses can reduce these fees by using local currency accounts and choosing a provider like Airwallex that offers interbank FX rates.

Are cross-border fees the same as foreign transaction fees?

No. A cross-border fee is a specific assessment charged by card networks based on the location mismatch between the merchant and the card-issuing bank. A foreign transaction fee is a broader term that usually bundles the cross-border assessment together with currency conversion fees and exchange rate margins into a single charge. Cross-border fees are one component of foreign transaction fees — not a synonym.

How much do Visa and Mastercard charge for cross-border transactions?

Mastercard charges 0.6% for transactions settled in USD and 1.0% for non-USD settlements.² Visa charges 1.0% for USD-settled transactions and 1.4% for non-USD transactions, plus a separate International Acquirer Fee of 0.45%.³ These fees are non-negotiable and apply on top of standard interchange and processing fees.

Do cross-border fees apply if the customer pays in my local currency?

Yes. Cross-border fees are triggered by the location of the card-issuing bank relative to your merchant account — not by the currency used. If a customer pays in SGD using a card issued by a European bank, the transaction is still classified as cross-border and the fee applies.

Can I avoid cross-border fees entirely?

It's difficult to eliminate them completely if you accept international card payments. However, you can significantly reduce your total cross-border costs by accepting payments via local payment methods (which are often processed domestically), holding funds in local currency accounts to avoid forced conversions, and using a provider that offers transparent FX rates with low margins. Airwallex helps businesses reduce cross-border costs by combining all of these approaches on a single platform.

How do cross-border fees affect my business?

Cross-border fees directly reduce your margins on international transactions. For businesses processing high volumes of cross-border payments, even small percentages add up quickly. For example, a 2% total fee on S$500,000 in annual cross-border transactions costs your business S$10,000 a year. These costs can also force you to raise prices for international customers, making your products less competitive in global markets.

Sources:

1. https://www.statista.com/outlook/emo/ecommerce/worldwide

2. https://www.cardfellow.com/blog/mastercard-cross-border-fee

3. https://ramp.com/blog/cross-border-fees

4. https://hostmerchantservices.com/articles/what-is-a-cross-border-fee-for-credit-card-processing/

This publication does not constitute legal, tax, or professional advice from Airwallex, nor does it substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [email protected]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.