The guide to understand commissions and hidden fees!

You have probably already transferred some money abroad, and for sure you paid sky-high fees. If you are saying “No” to yourself then it is another reason why this article is a MUST read for you!

Unfortunately nowadays it is impossible to transfer money for free, as I explained before when presenting all the different ways to send money. Luckily, we live in an era where new technologies and competition work in favour of us, the customers. Even now when we believe all the information we need is one click away, it turns out that generally the banks and money transfer operators are not 100% transparent and, for that reason, we decided to enlighten you!

Did you know that annually, $20 billion are taken by banks and other market players via hidden fees and commissions?

Differently said, more than 100.000 schools could have been built in developing countries if everyone saved this money.

Time to learn what you are paying for, when transferring money!

Fixed commission (transfer fee)

For any money transfer the bank and other players will charge you a certain amount called “fixed commission”.

There are 3 different types:

  • Minimum fees:No matter if you send 5$ or 5000$ you are entitled to pay a minimum fee. Beware; it can be very expensive if you exchange a small amount. The more you send, the higher the fee is.
  • Handling charges: when transferring your money, the bank and other players will charge you for carrying out the transaction, representing a service.
  • Flat fees: can be a good value-for-money as it is not changing, especially if you are sending large amounts.

Hidden fee

As its name suggests, this last component is pretty difficult to find out especially as it can combine different charges.

  • Foreign-exchange rate commission: Most of the time when you send money you are dealing with 2 different currencies: the domestic currency and the foreign one. The exchange rate is the value of the domestic currency for the purpose of conversion to the foreign one.
    NB: This rate is determined in the Foreign Exchange Market, meaning it depends on the continuous trade of buyers and sellers, so it is ever changing! Simply, this corresponds to the trading service provided by the entity, it might vary from one institution to another. The rates you find on the board, when entering a bank or a money exchange office, are never the true foreign exchange market ones for the day! They are always higher, because of additional variable fees that are included.
  • Payment method charges: if you are paying by credit card you might pay additional fees (around 3% to 5%, depending on your card and your bank policies).
  • Others: if you want the transfer to be faster than usual, you may find out extra costs when doing the final payment.

Below you can find an example of what you are paying when sending money abroad (with card payment). You have 2 examples, the first one sending 100 USD, the second is a 500 USD transfer:

First you are paying for the fixed commission (% of the money sent or fee by threshold) so it is more important for the 2nd sending. – Then, you have hidden charges such as credit card payment, and the exchange rate fee.

This example is general, & does not take into account the foreign currency. Depending the country you are sending from, or the currency used, costs can be even higher!

Good to know

Here are some tips to make cheaper transfers:

  • If you are sending money to the same financial entity (even abroad) it is likely to pay fewer fees. Indeed you avoid commissions taken by the recipient institution (receiving the money).
  • Try avoiding bank transfers and choose new digital ways to send money if you feel brave enough to send online.
  • Use online comparison platform that can compare all solutions available and give you the cheapest.
  • Check the exchange rate to know when is the most appropriate time to send money. Some qualified and easy-to-use websites can help you to do so such as Google and XE. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.