All-in Cost
The all-in cost of a transfer is everything the sender gives up: explicit fees, the FX markup built into the exchange rate, and any deduction taken downstream before the recipient is paid. It is expressed against the amount sent.
Also called: total cost of transfer · total cost · all in cost · effective cost
Three things reduce what a recipient ends up with. The advertised fee. The FX markup carried inside the exchange rate — the gap between a reference rate such as the mid-market rate and the rate applied. And deductions taken further along the chain: correspondent or lifting charges, a receiving bank’s inward fee, a payout partner’s cash-collection charge. Add all three, measure them against the amount sent, and that is the all-in cost.
Two things it is not. It is not the fee schedule, which covers only the first component. And it is not a single provider-level number — all-in cost changes with the corridor, the amount, the payout method and the day, so it has to be worked out for the transfer actually being made.
How to compare quotes
Ask each provider for the exact amount the recipient will receive, in the receiving currency, for a stated amount sent, with no deductions in transit. That one figure absorbs the fee, the margin and — where the provider will guarantee it — the downstream charges. Comparing headline fees, or margins quoted in basis points against unnamed reference rates, compares nothing.
In practice
A fee schedule is not an all-in cost. The exchange-rate margin is usually the larger of the two components, so a zero-fee offer is frequently the more expensive one. A quote is only comparable once it states the amount the recipient actually receives.
Example
Two quotes on the same 5,000-dollar transfer. Provider A charges 5 dollars and applies a rate 1.4% away from the mid-market rate: 5 dollars of fee plus 70 dollars of margin, 75 dollars all in. Provider B charges 35 dollars and applies a rate 0.2% away: 35 plus 10, or 45 dollars all in. The cheaper fee is the dearer transfer.
Commonly confused with
| Term | How it differs |
|---|---|
| FX Markup | The markup is one component of all-in cost — the part carried in the exchange rate instead of charged as a fee. |
| FX Spread | A spread is a property of the market in a currency pair; all-in cost is what one sender pays on one transfer. |
See also
- FX MarkupAn FX markup is the difference between a reference rate — normally the mid-market rate — and the rate actually offered to the customer. It is the provider’s price for the conversion, and on a cross-border transfer it is usually the largest part of the cost.
- FX SpreadStrictly, the FX spread is the bid/ask spread: the gap between the price at which a currency can be bought and the price at which it can be sold at the same moment. It is a property of the market and of liquidity in that pair.
- Mid-Market RateThe mid-market rate is the midpoint between the price at which a currency pair is being bought and the price at which it is being sold — the rate with no margin added. It is a reference point for pricing, not a rate a customer transacts at.
- Basis PointA basis point is one hundredth of one percentage point — 0.01%. FX and payments pricing is quoted in basis points because small percentages are easy to misread: 25 basis points is 0.25%, and 100 basis points is 1.00%.