Foreign Exchange Transfer Fees & Margins

Operating Globally? Invoicing in a Foreign Currency Explained
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It is difficult to provide definitive information on foreign exchange fees and margins as these will vary between the various foreign exchange brokers, however the majority of foreign exchange brokers will typically remain within the following thresholds. 

Foreign Exchange Fees

  • Transfers > £3,000 – Fee Free
  • Transfers < £3,000 – Fees typically range from £5 – £15 per transfer

Certain providers may promote that they do not charge foreign exchange fees which could be due to:

  • The minimum currency transfer accepted is £3,000 – £5,000
  • They incorporate foreign exchange fees in to their margins, thereby offering a worse exchange rate

Foreign Exchange Margins

Foreign exchange brokers and banks make money on the margins they take from each transfer they process regardless of whether it is a Spot deal, Forward contract, Limit order or Regular international payment.

A margin is the difference between the exchange rate the foreign exchange broker can buy at and the exchange rate they offer to their clients.  Each foreign exchange broker and high street bank has the flexibility to charge any margin they wish, which typically varies between 0.2% and 4% depending on the company and the size of the transaction.

High street banks typically charge a margin of between 2% – 4% and will usually charge a fee of between £20 – £40 for each international money transfer depending on the transaction size.

Foreign exchange brokers typically charge a margin of between 0.2% and 1.2% depending on transaction size, and may or may not charge a fee (see the section on Fees for more information).  Foreign exchange providers are generally more open to negotiating on exchange rates and fees to ensure they win the clients business.  However beware a foreign exchange broker offering exchange rates close to the interbank price, as firstly you have to question why they are willing to process a transaction which will not make them any profit, and secondly if you have the potential to be a repeat customer the foreign exchange broker may start widening their margins in the future to ensure they make a profit overall.


  • Interbank rate – the rate at which international banks trade between each other.  When looking at currency converters on any website, the exchange rate will typically be interbank or mid-market rates.  It is important to understand that a consumer will not be able to trade at interbank rates so exchange rates on currency converters and similar websites should be for information purposes only.
  • Wholesale rate – the exchange rate foreign exchange brokers can obtain from their banks or counter parties, the more the foreign exchange broker trades the better wholesale exchange rate they will receive or the tighter the margin they will be offered by their counter party.
  • Customer rate – the exchange rate and foreign exchange broker will offer to their clients.  The closer the exchange rate is to the interbank rate, the tighter the margin, the better the exchange rate, the more monetary value the client will receive.
  • Margin – the difference between the wholesale rate and the customer rate.  The margin is the foreign exchange broker’s gross profit on the transaction.

What is an exchange rate margin?

An exchange rate margin is the difference between the rate which a currency pair is trading at and which a broker or bank sells the exchange rate pair. The margin can also be known as a spread.

What fees will I be charged to make a foreign exchange transfer?

A bank will tend to charge between £10 to £ 40 to make international money transfer, the majority of foreign exchange brokers process the payment for free.

What margin will a foreign exchange broker charge me?

The margin applied to a foreign exchange transfer by a broker will be dependent on the following; the currency pair, the amount and the final destination. The larger the transfer the smaller the margin or spread.

Will a foreign exchange broker charge me a transfer fee?

The majority of foreign exchange brokers won’t charge a transfer fee to make an international money transfer. The rate will also be notably better.

Foreign Exchange Live