5 MINUTE READ
Wire transfer is one of the most popular methods for B2B payments due to its international reach and fast speed. Wire transfer fees, however, are not so friendly and can be detrimental to businesses. Learn key information about wire transfer fees and what your business can do to avoid them.
What are Wire Transfer Fees?
Wire transfer fees are fees that banks charge when you transfer money to a different bank account.
Wire transfer is one of the most commonly-used transaction methods for B2B payments due to its domestic and international reach and fast transfer time. For these reasons, wire transfer fees tend to be higher than any other forms of money transfer.
(To learn more about wire transfers, read our blog on B2B payments here!)
Did you know that different banks charge different fees?
On top of that, banks charge different prices for incoming vs. outgoing and domestic vs. international fees.
For example, Bank of America charges $15 per domestic incoming transfers, $30 for domestic outgoing transfers, $16 per international incoming transfers, and $45 for international outgoing transfers in USD.
International transfers tend to cost a lot more because they involve not only a US bank but also a wire processing system that connects a US bank to a foreign bank.
For businesses conducting high volume transactions, especially international transactions, these fees can pile up pretty quickly and can be detrimental to their profit margins.
To find out how much your bank charges for wire transfers, click here for a list of banks and their wire transfer fees.
However, the true cost of international wires is hidden.
The True Cost of International Transactions
In addition to the wire transfer fees, certain banks charge additional fees for international wire transfers. Banks hide their fees by marking up the exchange rate for both incoming and outgoing wires without you knowing.
On average they mark up their currency exchange rate by 4% more than the actual exchange rate. Meaning on every international payment, you are paying almost a 4% fee in addition to wire fees. On a $100,000 wire that could be up to $4,000 in fees you don’t even know you are paying!
Although the Consumer Financial Protection Bureau has created laws to protect consumers from banks, unfair exchange rate practices, consumers still do not have information on the exact exchange rate until after the transfer has been completed.
In addition to marked-up exchange rate, banks also charge fees for currency conversion. These fees are usually calculated as a percentage of the total amount being transferred. If your bank does not convert currency itself, foreign banks will do it themselves and may charge even higher fees.
5 Ways to Avoid or Cut Wire Transfer Fees
“Wire transfer fees can pile up pretty quickly and can be detrimental to businesses’ profit margins.”
1. Request wire transfer online
Banks charge different fees depending on how you request the transfer. Requesting wire transfers online is usually cheaper than in-person or over-the-phone requests. You can save $10 or more just just by initiating the transfer online yourself.
2. Discount-qualified bank accounts
Some banks offer discounts for individuals with a certain savings or checking account.
Here are some banks that offer such programs:
- Chase: Chase Premier Platinum Checking account holders are eligible for free incoming domestic and international wire transfers.
- TD: TD Relationship Checking and TD Premier Checking account holders are eligible for free incoming domestic and international wire transfers.
- Bank of America: Preferred Rewards members are eligible for free incoming domestic wire transfers (in addition, Platinum/Platinum Honors tier members are eligible for free international wire transfers).
You can easily find out if your bank offers wire transfer discount programs by visiting its website or calling your bank’s local branch.
3. Direct Debit (ACH) Transfers
You can choose to send money using direct debit transfer for domestic transfers.
Direct debit transfers are more affordable than wire transfers because there are no intermediaries. They are, however, limited in their international outreach, so may not be suitable for businesses that conduct international transactions.
4. Own global accounts or have a multi-currency balances
You can own multiple bank accounts around the world where you can collect locally and run your operations locally to avoid cross-border transfers. That is difficult to achieve and does not apply for everyone.
Another method is to own multiple currencies with the same account. Some banks may provide a EUR or GBP or CAD bank account in addition to your USD. This solution is made for global companies where you need to meet high deposit minimums.
The best solution is to use a platform where they offer small business, multi-currency balances where you can hold and exchange different currencies. borderless™ does offers this solution with no monthly fees or minimums. You can contact our team here to learn more.
5. Use borderless™ : Multi-currency balances with international ACH solution
borderless™ offers all the benefits of a wire transfer with lower fees and less hassle.
All the benefits of wire transfer
+ All benefits of an ACH
+ Lower fees
+ Less hassle
+ No monthly or hidden fees
With borderless™, you can send and receive money domestically and internationally more affordably than wire transfers for these reasons:
Free to Make Payments
Sending money is free for both domestic and international transactions (as it should be!).
Multi-Currency Balances: Collect as a local
We provide you with a multi-currency balance where you can hold and exchange up to 13 different currencies at the same time including USD, EUR, CAD, HKD, SGD, AUD and more. We also provide you with wire instructions to top up your account or share with clients where you can collect these currencies with $0 incoming wire fees. You can then exchange at your own time, rates or payout to vendors avoid double foreign exchange transfers.
Great FX rates and no separate currency conversion fees
In fact, we update our rates every 30 seconds to give you the most accurate exchange rate that is close to the mid-market rates.
Easy to use
To send domestic and international payments, all you need is the recipient’s email address or their borderless™’ unique handle. You can also pay anyone directly to their bank if you have their information. Just add them as a contact and pay!
Receiving a payment is also simple and quick– you can simply request a payment by entering their email or sharing a payment link. Customers can also just enter an amount on your PayMe™ Page, which you will receive upon making a borderless™ account and click Pay!
Private & Secure
Never share your banking information again. We also remove the hassle of sharing bank account numbers and routing numbers, keeping your information private.
Cashback Program Up to 10% – See if you qualify today!
If you make or pay more than a $500K a year or 10 bank wires a month, you qualify for our cashback program. That’s right, you can now get money back from receiving and making bank wires. borderless provides up to 10% cashback on borderless fees from bank wires. Something your bank or other services do not provide! Contact our sales team via our website or our chat support found on our website or email here to see if you qualify.
Low & capped fees
borderless™ offers much lower fees for international and local payments, making it the clear choice for businesses to save money. Unlike banks, there are no monthly or hidden fees. We have a pay-as-you-go-model where we charge 2% and cap our fees at $30 USD. That’s right, the maximum fee for any payment is $30 USD.
For example, if you are receiving $10,000 USD abroad, the average fee you would pay for an international wire transfer is $43 (plus additional money for currency conversion and marked up exchange rate which will cost you an additional $150).
With borderless™, however, you would only pay about $30 with currency conversion included saving you over $150USD in fees.
In addition, for B2B transactions, borderless™ offers low pricing with 0.1% rates and a maximum fee of $15 USD for local transfers. That means on a $5,000 payment, you only pay $5.00 vs your bank’s $15 USD fee.
For more information, check out our Savings Calculator to learn exactly how much you would save.
Overall, although wire transfer is a fast and secure method of transferring money domestically and internationally, it is an expensive and manual process that is hurting your business’ bottom lines.