How Costly Are Cross-Border Payments for Firms?

How costly are cross-border payments for firms? Using proprietary FXC Intelligence data on quoted prices for Canadian business-to-business cross-border payments, this note documents three empirical facts. First, cross-border payment costs for firms are costly: banks charge senders a total margin of around 2–3.5% of transaction value, with foreign exchange margins accounting for the majority of these costs relative to transaction fees. Second, payment costs for vehicle currencies tend to be lower. Third, for the same corridor and transfer amount, prices differ substantially across banks, and the size of this dispersion is corridor-specific.

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Publication Details

Journal
Bank of Canada Research
Published
2026-10-16
DOI
https://doi.org/10.34989/sap-2026-49
Primary Topic
Banking stability, regulation, efficiency
Type
article
Field-Weighted Citation Impact
0.00
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How Costly Are Cross-Border Payments for Firms?

Jiaqi Li
Bank of Canada Research
Banking stability, regulation, efficiency
article

How Costly Are Cross-Border Payments for Firms?

Jiaqi Li
article en

Abstract

How costly are cross-border payments for firms? Using proprietary FXC Intelligence data on quoted prices for Canadian business-to-business cross-border payments, this note documents three empirical facts. First, cross-border payment costs for firms are costly: banks charge senders a total margin of around 2–3.5% of transaction value, with foreign exchange margins accounting for the majority of these costs relative to transaction fees. Second, payment costs for vehicle currencies tend to be lower. Third, for the same corridor and transfer amount, prices differ substantially across banks, and the size of this dispersion is corridor-specific.

Bank of Canada Research
Bank of Canada (CA)
Openalex Percentile: Top 9%
Banking stability, regulation, efficiency
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