Global payments
Posted on May 9, 2025
Do you ever actually look into the breakdown of the amount while swiping your credit card to pay for any of your international transactions? The charges shown might look like you are paying what you have been genuinely charged, but NO! That's not always the case. There is an extra amount that you pay and is printed in fine print so that it does not look very significant, and it is generally overlooked.
There is a significant cost, charged by your international payment service provider be it your bank or credit card. This hidden Cost also know as markup fee is added secretly while converting your currency for foreign transaction.
The amount of markup fee might look very small, but when get added over a period of time, it actually amounts to a very big amount which you are losing unknowingly to your service provider.
This blog will make it easy for you to understand what exactly is markup fee, where is it charged and how to avoid it to save your money.
What is a Markup fee?
While making an international payment, you convert your money from one currency to another, your service provider charge a small amount of fee on the top of the exchange rate( live google rates), this fee is known as markup fee.
When you get paid in any foreign currency, your service provider converts it into your home currency. But instead of charging the real value of the exchange rate( what is shown on Google) they charge a small percentage on the top of exchange rate. This charge is usually between 1%-3% and is known as markup fee.
Banks and other service providers usually charge this markup to cover their operational costs and as a fee for converting currencies for you, but eventually, you end up paying more than what you should.
Why is a Markup Fee Charged?
When you get paid internationally, you receive payment in a foreign currency. So, your bank or payment provider has to convert your home currency (Eg, INR) for you. They charge a markup fee because:
Operational Cost: to cover the operational costs like staff handling, infrastructure, etc.
Fluctuations in exchange rate: Sometimes, the exchange rate fluctuates within a minute, too, so they keep a markup fee as a buffer to cover these costs.
Source of Profit: It is a source of revenue for payment providers.
Breakdown of How the Markup Fee Operates
These days, businesses have a lot of options available for receiving their international payments. However, almost every option has a way to charge the markup fee either in a hidden form or by showing it charged separately as a markup fee. Let's explore a few options and how they charge markup fees:
Traditional Bank Transfers:
In this payment method, the foreign client sends money via using SWIFT network to indian bank accounts. This method is usually used by exporters, SMBs etc.
How they operate: Suppose a payment has been received in USD. Banks convert this foreign currency into INR using an exchange rate lower than the interbank rate, adding a markup fee of 1%-3%. The bank may also charge an additional SWIFT charge. For example- For a payment of $1000 and live exchange rate of Rs83, you may end up with just Rs81000 in your account instead of Rs83000.
Online Payment Gateway( PayPal, Stripe etc):
International clients pay through card or wallet and the international payment lands into the account of the payment gatway provider. The money is then converter into Inr and transferred into local bank account. The kind of services are usually used by freelancers, startup founders etc.
How payment gateways charge markup fee: Payment gateway like PayPal charges a high Fx markup while converting your international payment. PayPal usually charges between 3.5%-4.4% and a fixed currency conversion fees. For example, If you receive an international payment of USD1000, you may end up receiving Rs76000-Rs78000, after adding all the markup and currency conversion fee, even though the live Fx rate would have yielded Rs83000.
International Payment Platforms( Infinity):
While receiving money through Infinity, your client sends your international payment directly into Infinity's multi-currency account. Infinity is ideal for all the exporters, freelancers, SMbs etc.
How Infinity operates: Infinity does not charge even a single penny as a markup fee. A small fee of 0.5% is charged as a platform fee. This means you pay the rates exactly as shown on Google. For example, if you receive an international payment of USD1000, you get an amount of Rs 82585 in your bank account. This means you get most of what you earn.
Summary Table
Platform | Markup Fee | Transactions Charges | Transparency |
|---|---|---|---|
Infinity | 0 | 0.5% | Fully Transparent |
Banks (SWIFT) | 2% – 3.5% | 1%-3% | Hidden in the exchange rate |
PayPal | 3.5%-4.5% | 4.4% | Limited transparency |
How to avoid or minimise markup fees?
While markup fees may look unavoidable, with the right planning, you may be able to minimise or even eliminate these unnecessary charges. Here are a few steps that can help you save more of what you earn from global business:
Choose a platform that provides Live exchange rates: Evaluate international payment provider platforms like Infinity, which offer currency conversion service at live exchange rates with a small flat fee of 0.5% as a platform fee. This makes it ideal for every business, freelancer, and exporter receiving money from their foreign clients.
Compare rates before converting: Different banks have different markup fee. So, before converting your money into INR, compare the rates provides by banks. Even a difference of 0.5% can result into thousands saved on large payments. Pro tip: Always, keep a check on the live Fx rates to benchmark.
Consolidate payment frequency: To avoid converting your payments at a regular interval (and getting charged for markup everytime), consolidate the payment and request for a single larger payment. You will have to pay the markup once(if not using Infinity!), saving on the cumulative Cost.
Negotiate with your payment provider: If a large amount of your business's international payment is handled by one provider, you must negotiate with your bank or payment provider for lower markup fee.
Infinity: Cheapest Platform for Receiving International Payments
When it comes to receiving international payments, most of the payment provider usually deduct a small amount as a markup fee, eating your businesses har earned money. But this is where Infinity stands apart.
Infinity converts your money at a live FX rate (Google rate) with 0 markup fee. This means you just pay a small fee of 0.5% as platform fee (being the best rate in the market!) and thats it! No other markup fee or currency conversion fee.
Unlike banks or other payment providers in the market who applys 2%-4% markup fee, Infinity helps you save on your hard earned money with real, mid-market exchange rate and a minimal fee of 0.5% as platform fee.
So, what are you waiting for? Sign up with Infinity today and save more of what you earn!
