Cross-border fees: How to minimize them for businesses

Cross-border fees are charges that apply when businesses send payments to vendors in other countries. These fees are a common cost of making international payments and can affect your accounts payable (AP) operations, cash flow, and vendor relationships. They help cover the added complexities and risks of processing international payments through global financial networks.

In this guide, we'll discuss what cross-border fees are, why they're charged, and practical strategies for reducing their impact on your business's international payables.

What are cross-border fees?

You might see these fees labeled in a variety of ways, such as:

• International service assessment
• Cross-border assessment
• Foreign transaction fee
• International transfer fee
• Currency conversion charge

These fees apply regardless of the currency used in the transaction. What matters is the mismatch between your business's payment account country and the vendor's receiving account country. For businesses managing international vendor payments, these charges can accumulate quickly, especially if you frequently pay overseas suppliers or contractors.

When and why are cross-border fees charged?

Cross-border fees are charged when your business sends a payment across national borders—specifically, when the sending and receiving bank accounts are located in different countries. This includes scenarios such as:

• A U.S.-based business paying a vendor in the UK
• A Canadian company sending a payment to a supplier in India

Even if you send the payment in the recipient’s local currency, your business may still incur a cross-border fee due to the international nature of the transaction.

Here’s how it works:

• Your AP team initiates a payment to an overseas vendor
• The payment network (e.g., SWIFT, Visa, Mastercard) flags the transaction as cross-border based on account locations
• A fee is applied to cover the added regulatory, compliance, and infrastructure costs
• The fee appears as a separate item or bundled within your total transaction cost

These fees exist because international payments involve higher fraud risk, multi-jurisdictional regulations, additional verification, and the use of intermediary financial institutions.

Who pays the cross-border charges?

In B2B payments, the paying business (you) usually covers the cross-border fee. These charges are either deducted from the total amount sent or added on top of your transfer cost, depending on your provider.

You may see these fees as line items on your payment processor’s invoice or within your financial platform’s monthly reports. Some providers bundle them into exchange rates or platform fees, which can obscure the true cost of sending funds internationally.

Because these charges can vary depending on destination country, payment method, and provider, it’s important to track them closely and incorporate them into your vendor payment cost analysis.

Cross-border fees vs. other international transaction fees

Cross-border fees are just one type of cost in international AP. Other common fees businesses face when sending money abroad include:

• Currency conversion fees: Charged for exchanging funds from one currency to another
• Foreign transaction fees: General charges added when funds move between countries
• SWIFT transfer fees: Charges for using the SWIFT network to send wires internationally
• Intermediary (correspondent) bank fees: Fees collected by banks that relay funds between sender and recipient when no direct relationship exists
• Receiving bank fees: Sometimes the vendor's bank charges them a fee, which may reduce the net payment received

Understanding how each of these fees applies helps you evaluate payment options and negotiate vendor terms more effectively.

How much do cross-border charges cost?

Cross-border fees vary depending on payment method, destination country, and provider. Here are typical rates:

Card network fees (like Visa and Mastercard) usually apply a percentage of the payment when a corporate card is used internationally. Wire transfer fees tend to be fixed amounts, with additional hidden costs if intermediary banks are used.

Other variables that influence your fee structure include:

• Destination country: Payments to high-risk or less developed financial markets may incur higher fees
• Currency used: Converting to a different currency often triggers additional conversion charges
• Payment method: Some providers charge more for speed (e.g., same-day transfers)

These fees can change as networks adjust for new regulations or risk models. Review your fee statements regularly and confirm current rates with your provider.

Strategies to minimize cross-border fees

Cross-border fees are a common cost in international AP, but there are ways to reduce or avoid them entirely with the right setup.

One effective strategy is to establish local bank accounts in your most active vendor markets. Paying from a local account to a local vendor avoids cross-border classification altogether, minimizing fees and speeding up settlement.

If local accounts aren't feasible, consider using global payment platforms or AP automation tools that specialize in vendor payments. These platforms often:

• Maintain a network of local banking partners
• Batch and optimize international payments to reduce per-transaction fees
• Offer mid-market FX rates or fixed-fee pricing models

Another approach is to negotiate with vendors on preferred currencies or payment methods. For instance, paying in the vendor's local currency may reduce or eliminate conversion fees and improve reconciliation.

When selecting a payment provider, prioritize those that:

• Support multiple currencies and payment rails (e.g., SWIFT, SEPA, local ACH)
• Disclose fees transparently
• Provide reporting tools to track cross-border payment costs

Finally, consolidate payments when possible. Sending one international payment to cover multiple vendor invoices can reduce total transaction fees if your provider allows bulk payment processing.

Key takeaways

Cross-border fees can add unnecessary friction to your accounts payable process if not understood and managed strategically. By identifying when and why these fees apply, and adopting tools and practices to reduce them, you can optimize your international payment operations and preserve margin.

Regularly audit your payment flows, assess provider capabilities, and look for opportunities to localize or streamline your payment infrastructure. With the right systems in place, your business can scale international vendor payments without incurring excessive cross-border costs.

Send international business payments with Ramp

International payments are a core part of running a global business. Whether you're paying suppliers, contractors, or team members across borders, you need a system that's fast, reliable, and built to handle complexity. The right setup can prevent costly delays, protect relationships, and keep your operations running smoothly.

Ramp Bill Pay supports multiple payment methods—so you don’t have to rely on a one-size-fits-all solution. Move money the way that works best for each situation:

• International wire transfers: Ramp supports payments to vendors abroad in U.S. dollars or payments to international vendors in their local currency
• Domestic wire transfers: Send large, time-sensitive payments the same day through the Fedwire network
• ACH (direct deposit): Schedule regular or same-day ACH payments for payroll, vendor bills, or other recurring expenses
• Ramp cards: Pay vendors by Ramp card and earn cashback with vendors that accept Visa
• Check payments: For US-based vendors who still prefer checks, Ramp can issue and mail checks on your behalf

With Ramp, you control how and when payments go out—without sacrificing speed, accuracy, or visibility. Get started with Ramp.