The Hidden Costs of International Payments

Small businesses are the lifeblood of Ireland’s economy. They power local communities, create jobs, and increasingly look abroad for growth. Yet when it comes to sending or receiving money across borders, many are paying far more than they realise.

The promise of new markets can be overshadowed by hidden costs. What looks like a straightforward transfer often masks layers of extra charges that eat into already tight margins. For a business where every euro counts, these charges can make the difference between profit and loss.

What you should be aware of

Hidden fees

Many assume the only cost of an international transfer is the upfront fee. In practice, the true cost comes in several parts:

• Transfer fees: €15 - €40 on each payment
• Exchange rate markups: often 2 - 3% above the mid-market rate
• Receiving bank fees: €10 - €40 per transaction
• Intermediary bank charges: rarely disclosed in advance

When combined, these costs can easily run into thousands each year. For instance, sending €100,000 to a UK supplier could cost not only the €15 - €40 transfer fee but an additional €2,000 hidden in an unfavourable exchange rate.

The risks of volatility

Exchange rates shift daily. Without hedging tools such as forward contracts, small businesses risk losing margin overnight. A sudden drop in the euro’s value could leave you short on receivables or facing inflated supplier costs, destabilising cash flow.

Errors and delays

Manual processing also leaves plenty of room for mistakes. A misplaced digit in an IBAN or BIC can cause delays, failed payments, and repair fees. Each error ties up staff time and disrupts relationships with suppliers who rely on prompt settlement.

The threat of fraud

A FraudSMART report shows Irish SMEs lost more than €17 million in two years through invoice scams and fake payment instructions. Smaller businesses, often without large compliance teams, remain prime targets.

What small businesses can do

• Compare providers: Foreign currency payment specialists usually offer better rates and lower fees than traditional banks.
• Use hedging tools: Forward contracts protect margins from currency swings.
• Demand full transparency: Know every charge before committing to a transfer.
• Strengthen fraud training: Encourage staff to verify payment changes by phone directly with suppliers (Never use the phone number quoted on an e mail looking to update/change account details, always use an independently verified contact number).

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This article is written in partnership with Fexco International Payments. Kerry based, Fexco International Payments is the trusted cross border payments partner to the SFA and works with its members to deliver transparent, cost-effective solutions tailored to small firms. With zero fees on FX transactions, competitive rates, automated payments technology to reduce errors, and stronger fraud safeguards, we keep more of your hard-earned money where it belongs - fuelling your growth.

Explore Fexco's offer for SFA Members