How to Send Money Abroad Cheaply: Fees vs Exchange-Rate Markup

The cheapest way to send money abroad is to pick the service that puts the most money in your recipient's hands. That sounds obvious, but it is easy to miss, because providers advertise the part of the cost they want you to see. A low or zero fee can hide a poor exchange rate, and a good rate can come with a higher fee.

This guide explains the two parts of every transfer's cost, the extra charges that depend on how you pay, and a quick way to compare services so you can be confident you are not overpaying.

The two parts of every transfer's cost

Every international transfer has two costs:

1. The transfer fee. This is the visible charge on the quote. It may be a flat amount, a percentage of what you send, or a mix of both. It can change with the amount, the destination, the delivery method and how you pay.
2. The exchange-rate markup. This is the less visible part. When you send dollars and your recipient receives pesos, rupees or euros, the provider converts the money at its own rate. The gap between that rate and the mid-market rate is profit for the provider and a cost for you.

Add the two together and you have the true cost. A transfer with a small fee and a big markup can easily cost more than one with a higher fee and no markup.

What the mid-market rate is, and why it matters

The mid-market rate is the midpoint between the prices at which banks and large institutions buy and sell a currency. It is the rate you see on Google, Xe's converter and most financial news sites. It is a reference point, not a rate that individuals are usually offered.

Providers handle it in different ways:

• Wise says on its pricing page that it converts at the live mid-market rate and charges a separate, upfront fee. The fee is the whole cost.
• Xe explains that it adds a margin to the mid-market rate, and shows its own send rate next to the mid-market rate before you confirm, so you can see the difference.
• Western Union states on its US site that it makes money from currency exchange, in addition to any fee.
• Most banks also build a margin into the rate they give you on a wire, and may add a wire fee on top.

None of these approaches is wrong. What matters is that you can see the margin and compare it.

A hypothetical example

Here is a hypothetical example to show how the two costs interact. The numbers are made up for illustration only and do not represent any real provider's pricing.

In this hypothetical case, say you want to send $1,000 to a family member, and the mid-market rate is 1 USD = 20 units of their currency. At the mid-market rate, $1,000 would be worth 20,000 units.

Service B advertises a zero fee, but its recipient gets the least. Service A charges the highest fee but delivers the most. The only number that tells the whole story is the last column.

Charges that depend on how you pay

How you fund the transfer can change both the price and the speed.

• Bank transfer (ACH). Usually the cheapest option. It can take longer for the money to reach the provider, so the transfer may arrive later.
• Debit card. Often faster. Some providers charge more for card payments than for bank payments. Xe, for example, says card payments carry a small additional fee.
• Credit card. Can be the most expensive. Western Union and WorldRemit both warn that card issuers may charge a cash advance fee, and cash advances usually start charging interest immediately.
• Wire transfer. Often used for large amounts. Your own bank may charge you to send the wire to the provider.
• Cash in person. Some services let you pay in cash at an agent location. Fees for in-person transfers can differ from online prices. A new federal excise tax on remittances that took effect on January 1, 2026 applies to transfers paid with cash, money orders and similar physical methods; Wise's US site notes that transfers funded digitally, by ACH, wire or card, are not covered. Ask the provider how it applies to you.

A good quote shows the fee and arrival time for each payment method, so you can choose between saving money and saving time.

How to compare services in five minutes

1. Decide how your recipient will receive the money. Bank account, cash pickup or mobile wallet. This narrows the field: Wise and OFX deliver to bank accounts, while Remitly, Xe, Western Union and WorldRemit offer cash pickup or mobile wallets in many countries.
2. Get two or three quotes for the same amount. Use the same amount, destination, delivery method and payment method on each site.
3. Compare the amount received. Ignore the headline fee and look at the final figure in the recipient's currency.
4. Check the arrival estimate. A slightly cheaper transfer that takes days longer may not be worth it if the money is needed urgently.
5. Read the fine print on first-transfer offers. Introductory rates or fee waivers are common. Check the current offer on the site, and check what the second transfer will cost too.

Ways to cut the cost further

• Send less often, in larger amounts. Fixed fees take a bigger bite out of small transfers. If it works for your situation, one larger transfer can cost less than several small ones.
• Pay from your bank account instead of a card when time allows.
• Use rate alerts. Xe, OFX and CurrencyFair offer rate alerts that notify you when the exchange rate reaches a level you choose. This helps with large, flexible transfers, though rates can move either way.
• Check large-transfer pricing. Wise says it discounts its fee for larger monthly volumes, and services such as OFX are built for larger sums with specialist support. Compare a dedicated service with your bank for big transfers.
• Avoid dynamic currency conversion. If you are paying a bill abroad by card and asked whether to pay in dollars or the local currency, choosing dollars often means a worse rate.

When your bank might still make sense

Banks can be a sensible choice for some transfers, for example if your bank offers good rates on a particular currency, if you need to send a very large amount and want everything in one place, or if the recipient's bank only accepts wires. Just compare the amount received with an online service first. Our guide to bank wires vs online transfer services walks through the differences.

The bottom line

To send money abroad cheaply, compare the full cost, not just the fee. Get quotes for the same amount on a few services, look at how much your recipient will receive, pay by bank transfer where you can, and steer clear of credit cards. Fees and exchange rates change constantly, so check the quote shown on the provider's own site before you send. Our comparison of money transfer services explains how each one prices transfers.