The Invoice Shows One Layer. You Pay Four.
Ask a finance team what a cross-border payment costs and they'll quote the wire fee. That is the one number on the statement, and usually the smallest of the four.
1. Explicit fees
The sending bank's wire fee, and often a fee taken by an intermediary bank along the way, sometimes deducted from the amount before it arrives. Depending on the charge option chosen on the payment, some of these land on you and some on your supplier.
2. FX margin
The exchange rate you're given is rarely the mid-market rate. The difference is the provider's margin, and it is usually the largest cost in the payment while appearing nowhere as a line item.
3. The second conversion
When neither currency is USD, the payment is typically converted into dollars and out again, and a margin is taken on each conversion. The dollar leg is the "dollar tax": a second spread for a step the payment didn't need.
4. Time and capital
Money in transit for 2–5 business days is money you can't use, and businesses that pre-fund accounts in other currencies tie up working capital to avoid the wait. This cost doesn't show up on any statement, but it is real.
Across the legs, the traditional route typically costs roughly 1.5–3% (a Modality estimate) all-in.
A Worked Example
This is arithmetic on a stated assumption, not a quote. Suppose each currency conversion carries a 0.35% all-in margin, the same sample assumption used in the pair checker on our site. You send the equivalent of $1,000,000 a month on a corridor where neither currency is USD.
| Via USD | Direct pair | |
|---|---|---|
| Conversions | 2 | 1 |
| Margin per conversion | 0.35% | 0.35% |
| Monthly conversion cost | $7,000 | $3,500 |
The saving here comes entirely from removing one conversion. Real margins vary by pair and volume, which is why the rate is quoted before you commit.
How to Measure Your Own Landed Cost
Take a recent payment. Look up the mid-market rate at the time it was sent, and compute what the recipient should have received at that rate. Subtract what they actually received, and add any fees you paid separately. Divide by the mid-market amount. That percentage is your landed cost, and for most businesses it is higher than the fee they thought they were paying.
Run your pair through the pair checker, or get a demo and we'll quote it.
FAQ
How much does a cross-border B2B payment cost?
Through the traditional correspondent route, roughly 1.5–3% across legs, plus 2–5 business days in transit. Most of that is FX margin, not the visible wire fee.
What is the largest hidden cost in international payments?
The FX margin, especially when a payment is converted into USD and out again, so a margin is taken twice.
How can I work out my real cost?
Compare what the recipient received with what the mid-market rate implies at the time of sending, add separate fees, and divide by the mid-market amount.
Note: the 1.5–3% cost and 2–5 business day figures are Modality estimates for a typical correspondent-bank route, not a published benchmark. Actual cost and timing vary by corridor, currency pair, bank and amount.