The short answer
There is no free option. Every route takes a cut, either as a visible fee or inside the exchange rate. The cheapest one is the route that quotes the all-in cost for your amount and currency pair before you send, so you can compare numbers instead of advertised fees.
Cross-border payments have long been costly: a 2018 BIS committee report described them as slower, costlier and more opaque than domestic payments, and the G20's 2027 cost target is unlikely to be met on current progress (sources below).
Where the cost lands on each route
| Route | Where the cost shows up | What to ask before you send |
|---|---|---|
| Bank wire (SWIFT) | A per-wire fee from your bank, plus the exchange-rate spread in the rate it quotes | What rate will the recipient get, and will the full amount arrive or will another bank in the chain take a fee? |
| Freelance marketplace | A platform fee, plus a spread built into the exchange rate | How far is the rate from mid-market on the day? |
| Contractor-management or payroll-of-record platform | A recurring per-contractor fee, plus FX on each payment | What does it cost per year at your headcount, FX included? |
| Direct settlement on the currency pair | One conversion on the pair, quoted before you commit | What is the all-in quote for my pair and amount, and when does it land? |
Direct settlement is infrastructure for companies that pay many contractors or recipients across currencies. If you pay one or two people a month, the real choice is usually between the first three routes, and the method below tells you which one is cheapest for your numbers.
Work out your all-in cost in three steps
- Get the mid-market rate for your pair on the day. It is the midpoint of the buy and sell rates in the interbank market, and any public rate source will show it.
- Get each provider's quote for your exact amount: the rate they apply and the fixed fee, if any.
- Calculate (amount you would receive at mid-market minus amount actually delivered, plus the fixed fee) divided by the amount sent.
Worked example (illustrative numbers, not a quote). You send 3,000. At the mid-market rate the contractor would receive 3,000 in the destination currency, and the quote delivers 2,940. That 60 gap is the spread. Add a fixed fee of 25 and the total cost is 85, or about 2.8% of the amount sent. On a monthly payment to one contractor that is 85 every month; across twenty contractors it is 1,700 a month, whatever the provider's headline fee says.
Why the fee schedule hides the real cost
Many providers advertise a low or zero transfer fee and earn their margin in the exchange rate, so the quote is already worse than mid-market by the spread they have built in. When neither party's currency is the dollar, a payment that routes through USD can carry two conversions, and so two spreads, instead of one.
The G20 transparency target addresses exactly this: it asks payment providers to show the total transaction cost, including FX and any intermediaries, together with the expected delivery time and status tracking. A quote that does not show those is not yet comparable.
Five ways to lower the cost
- Ask for the rate before you commit, not at execution. A rate that moves between quote and execution is a hidden fee.
- Compare the all-in cost, fee plus spread, never the advertised transfer fee alone.
- Check whether the payment routes through USD when neither party uses dollars.
- Pay in the contractor's local currency where you can, so the conversion happens once and you can see it.
- For recurring payments, model the annual cost. A flat monthly platform fee compounds fast at scale.
The cheapest option is rarely the one with the lowest advertised fee. It is the one that shows you the real rate before you send.
What the benchmarks say
The G20 targets, endorsed through the Financial Stability Board (FSB), set a goal of no more than 1% as the global average cost of retail cross-border payments, with no corridor above 3%, by end-2027. In its 2025 consolidated progress report the FSB says average costs remain sticky and that satisfactory global improvement in line with the 2027 timetable is unlikely.
For a consumer-side benchmark, the World Bank's Remittance Prices Worldwide reports a global average cost of 6.36% of the amount sent for remittances. That series covers person-to-person transfers rather than business payments, so use it as context, not as a quote for contractor payments.
The bottom line
Paying international contractors cheaply is about the shortest path between two currencies, quoted honestly before you commit. A direct pair removes the USD detour, which cuts one conversion and one spread. Whatever route you choose, make the provider show you the all-in number first.
Sources
- Financial Stability Board, G20 targets for enhancing cross-border payments (page last updated 13 October 2026).
- Financial Stability Board, G20 Roadmap for Cross-border Payments: consolidated progress report for 2025 (9 October 2025).
- Bank for International Settlements, CPMI, Cross-border retail payments (February 2018).
- Financial Stability Board, Enhancing Cross-border Payments: Stage 1 report to the G20 (April 2020): cites fragmented data standards and legacy technology platforms among the frictions.
- World Bank, Remittance Prices Worldwide (page last updated 18 August 2025).
What is the cheapest way to pay an international contractor?
The cheapest route is the one with the lowest all-in cost, meaning the transfer fee plus the gap between the exchange rate you are quoted and the mid-market rate. A low advertised fee does not make a transfer cheap if the rate is wide. Ask each provider for the rate and the total cost for your exact amount and currency pair before you send.
How do I calculate the all-in cost of an international payment?
Add the fixed fee to the rate spread, then divide by the amount sent. The rate spread is the amount you would have delivered at the mid-market rate minus the amount actually delivered. For example, if you send 3,000 and the quote delivers 2,940 at mid-market terms, the spread cost is 60; with a 25 fee the total is 85, or about 2.8%.
Why do zero-fee transfers still cost money?
Some providers earn their margin in the exchange rate instead of a line-item fee. The rate shown is then worse than the mid-market rate by the spread built into it, so a zero transfer fee does not mean a free transfer.
What do regulators say cross-border payments should cost?
The G20 targets endorsed through the Financial Stability Board call for the global average cost of retail cross-border payments to be no more than 1%, with no corridor above 3%, by end-2027. The FSB's 2025 progress report says the average global cost remains sticky and that satisfactory improvement against the 2027 timetable is unlikely.
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