When Anita, a Lagos-based fashion entrepreneur, sent $5,000 to her Chinese supplier for fabric, her bank confirmed a $45 wire transfer fee. She calculated the cost, budgeted accordingly, and authorised the payment. Two weeks later, her supplier called: they’d only received $4,680.

Where did the missing $275 go?

Welcome to the murky world of hidden fees in international payments, where what you’re told you’ll pay rarely matches what you actually pay.

International payments are financial transactions where money moves between parties in different countries. In 2022 alone, over $150 trillion in international payments flowed through the global financial system. For African businesses expanding globally, freelancers serving international clients, or companies managing cross-border operations, these payments are unavoidable.

But here’s what banks won’t advertise: the fees you see upfront represent just a fraction of your actual costs. The rest? Buried in exchange rate markups, intermediary charges, and processing fees that mysteriously appear after your payment is already en route.

What Are International Payments?

International payments—also called cross-border payments—involve transferring funds between individuals or businesses in different countries. These transactions typically require currency conversion and must comply with regulations in both the sending and receiving countries.

Common uses include paying overseas suppliers, receiving payments from international clients, compensating remote employees abroad, and sending remittances to family members in other countries.

The Seven Hidden Fee Layers in International Payments

1. The Exchange Rate Markup—The Biggest Hidden Cost

When your bank quotes an exchange rate, they’re almost never giving you the real market rate (called the mid-market or interbank rate). Instead, they add a markup that becomes pure profit.

How it works: If the actual USD to NGN mid-market rate is 1,450, your bank might offer you 1,380—a 70-naira markup per dollar. On a $10,000 transaction, that’s 700,000 naira ($482) in hidden costs disguised as “the exchange rate.”

Studies show banks typically add 3-6% to exchange rates for international payments. For African businesses dealing in volatile currency pairs, this can reach 8-10%. On $100,000 in annual international payments, you could be losing $8,000-$10,000 to exchange rate markups alone.

2. Intermediary Bank Fees—The Invisible Middlemen

Your money rarely travels directly from your bank to the recipient’s bank. Instead, it passes through one to three intermediary banks, each taking a cut—typically $10-$30 per institution.

The hidden part: Your bank discloses its fee ($40-$50) but rarely informs you about intermediary bank charges. These fees are silently deducted from the principal amount, so your recipient receives less money than you sent.

3. Receiving Bank Charges

The recipient’s bank charges $10-$25 to process incoming international payments, automatically deducted before crediting the recipient’s account.

Why it’s hidden: Because you’re not directly paying this fee, many senders don’t factor it into calculations. Yet if you’re paying a supplier or contractor, these charges effectively reduce what they receive, often leading to awkward conversations and requests for “top-up” payments.

4. Currency Conversion Fees on Top of Markups

Some institutions charge both an exchange rate markup AND a separate currency conversion fee. After applying their exchange rate markup (3-5%), they add an additional “conversion fee” of 1-3% of the transaction amount.

Example on a $5,000 payment:

• Exchange rate markup: 4% = $200
• Currency conversion fee: 2% = $100
• Total hidden cost: $300 (6% of transaction value)

5. Weekend and Holiday Holding Fees

International payments initiated on Fridays or before holidays face an overlooked risk: unfavorable exchange rate movements while your money sits idle.

If you initiate a payment on Friday afternoon, it won’t process until Monday. Many banks use the rate from when they process the payment (Monday), not when you initiated it (Friday). For currency pairs with high volatility, weekend rate movements can shift 2-5%. On a $50,000 payment, that’s $1,000-$2,500 in additional costs due to timing. Time, in this case, is money.

6. Compliance and Regulatory Fees

Beyond standard processing fees, you might see charges labeled as “compliance processing fee,” “regulatory verification charge,” or “enhanced due diligence fee”—typically $15-$75 per transaction.

These fees are often disclosed in fine print or appear only on your statement after the transaction completes. For businesses making regular international payments, these fees compound quickly.

7. Payment Failure and Amendment Fees

When international payments fail due to incorrect details or regulatory issues, banks charge investigation fees ($30-$50), payment recalls ($40-$80), and amendments ($25-$60).

The LexisNexis Risk Solutions report found that up to 50% of payment delays stem from simple data errors. A significant portion of these “occasional” fees could be prevented with better systems, yet customers bear the cost.

The True Cost: A Real Example

Let’s calculate what Anita actually paid to send $5,000 to China:

Advertised costs:

• Wire transfer fee: $45

Actual hidden costs:

• Exchange rate markup (4%): $200
• Intermediary bank fee: $50
• Receiving bank fee: $25
• Total hidden costs: $275

Total actual cost: $320 (6.4% of transaction value)

Anita paid more than 7 times the advertised fee. This wasn’t fraud; it’s standard practice in traditional international payment systems.

How International Payment Methods Compare

Traditional Bank Wire Transfers

• Total typical cost: 5-9% for African businesses
• Best for: Large one-time payments where security outweighs cost

Digital Payment Platforms (PayPal, Stripe)

• Total typical cost: 5-7%
• Best for: Receiving international payments for goods/services

Money Transfer Operators (Western Union)

• Total typical cost: 6-10%
• Best for: Urgent, small-value transfers

Modern Fintech Solutions (Wise, Duplo)

• Total typical cost: 1-3%
• Best for: Regular business international payments

How to Protect Your Business from Hidden Fees in International Payments

The truth is, you can’t control how banks structure their charges, but you can take smarter steps to protect your business. Here are strategies to keep hidden fees in check:

1. Calculate the Total Cost, Not Just the Advertised Fee.

Don’t stop at the transfer fee your provider shows you—factor in exchange rate markups, intermediary bank deductions, and receiving charges. A quick check against the mid-market rate on Google or XE.com can reveal how much extra you’re really paying.

2. Ask The Right Questions.

When evaluating providers, be direct:

• “What exchange rate are you applying, and how does it compare to the mid-market rate?”
• “Will intermediary banks deduct fees along the way?”
• “What exact amount will my supplier or client receive?”

Clear answers signal transparency. Evasive ones are a red flag.

3. Choose Providers with Upfront Cost Transparency

Modern fintech platforms like Duplo show you the exact amount the recipient will receive before you confirm the payment. This transparency eliminates surprises and allows accurate cost comparison.

4. Time Payments Strategically

To avoid weekend and holiday rate fluctuations:

• Initiate international payments early in the week
• Avoid processing payments before long holiday weekends
• Monitor exchange rate trends and execute transfers during favourable periods

5. Automate Regular Payments

If you make frequent international payments, automation helps reduce errors, lowers operational overhead, and often qualifies you for better rates. With Duplo, recurring payments are streamlined and routed through the most cost-effective paths.

How Duplo Eliminates Hidden Fees In International Payments

While traditional banking systems profit from complexity and opacity, Duplo is built on transparent pricing that businesses can trust.

Complete Cost Transparency: Duplo shows the exact amount your recipient will receive before you confirm any payment. There are no surprises or hidden deductions.

Mid-Market Exchange Rates: Duplo uses the real mid-market rate, unlike banks that add 3-6% markups. What you see on Google is what you pay.

Direct Banking Relationships: Duplo’s network of direct banking partnerships across 160+ countries means fewer intermediary banks. Fewer intermediaries mean fewer fees deducted from your payment.

All-Inclusive Pricing: No separate “compliance fees” or “processing charges” appearing later. The fee you see is the only fee you pay.

Smart Payment Routing: Duplo automatically routes international payments through the most cost-effective path, avoiding unnecessary intermediary banks.

The Bottom Line

Hidden fees in international payments represent a significant ongoing cost that can consume 5-9% of every transaction. For a business making $500,000 in annual international payments, that’s $25,000-$45,000 in unnecessary costs.

If your company depends on international payments, it’s time to look beyond the “zero fees” marketing and ask the more complex questions: What’s the exchange rate? Which banks will touch this payment? Are there deductions at the receiving end? The answers might surprise you.

The traditional banking system relies on this opacity to maintain profit margins. Modern fintech solutions are disrupting this model by offering transparent, cost-effective alternatives built for businesses that demand clarity.

Duplo provides transparent, cost-effective international payment solutions built for African businesses.

👉 Book a demo today to see exactly how much you can save!

Simplify your international payments. Cut the hidden costs. Power your business growth with Duplo.