Why is sending money abroad still slow and expensive?
Paying someone across town takes seconds. Paying someone across a border can take days and cost several percent of the amount. Here is where the money and the time go.
The short answer
A cross-border payment usually passes through several banks in different countries and involves a currency conversion, and each step can add cost and delay. For remittances, the World Bank found that sending $200 cost an average of 6.36% of the amount in the third quarter of 2025.
Key takeaways
- International transfers often travel through a chain of correspondent banks, which adds steps, fees and time.
- The total cost has two parts: the visible transfer fee and the exchange-rate margin hidden in the rate you are given.
- Sending $200 cost 6.36% on average worldwide in Q3 2025; banks averaged 14.99% and digital services 4.59%.
- The UN and G20 aim to bring the average cost of remittances below 3% by 2030, with no corridor above 5%.
- Compare the amount the recipient will actually receive, not the advertised fee.
Why is paying across borders harder than paying at home?
Inside one country, banks usually settle payments through a shared national system in a single currency. Across borders there is no single system. Money has to move between two currencies and two sets of rules, and the sending bank often has no direct account with the receiving bank.
The traditional fix is correspondent banking. The Bank for International Settlements' payments committee defines it as an arrangement in which one bank, the correspondent, holds deposits owned by other banks, the respondents, and provides them with payment and other services6. A transfer can pass through several such banks in different jurisdictions before it arrives6.
Figure · A simplified cross-border bank transfer
- 01Senderpays in own currency
- 02Sending bankor money transfer firm
- 03Correspondentone or more banks
- 04Receiving bankcredits local currency
- 05Recipientaccount, wallet or cash
The network has also been shrinking in places. The BIS committee reported that some banks were cutting the number of correspondent relationships they keep and opening few new ones, raising the risk that payment networks fragment and options narrow6. Each bank in the chain also runs its own KYC and anti-money laundering checks, which can hold a payment up.
How much money do migrants send home?
A remittance is money a person working abroad sends to family or friends in another country. The amounts are large. The World Bank estimated that officially recorded remittances to low- and middle-income countries reached about $656 billion in 2023, more than both foreign direct investment and official development aid that year4.
Figure · Largest remittance recipients, 2023 (USD billions)
For the families receiving it, every percentage point of cost is money that does not arrive. International bodies therefore track remittance prices closely and have set public targets to cut them.
What does it cost to send money abroad?
The World Bank's Remittance Prices Worldwide database measures the total cost in two parts: the transfer fee and the foreign exchange margin1. The margin is the gap between the exchange rate the provider gives you and the mid-market rate. You never see it as a line item, but it reduces what the recipient gets.
In the third quarter of 2025, sending $200 cost 6.36% of the amount on average worldwide, down from 6.49% in the first quarter1. Sending $500 cost a lower 4.08% on average1. The database tracks 367 country corridors, from 48 sending countries to 105 receiving countries2.
Average cost of sending $200, Q3 2025, and what that means in dollars Source: [1]
| Channel or region | Average cost | Cost on $200 |
|---|---|---|
| Global average | 6.36% | $12.72 |
| Banks | 14.99% | $29.98 |
| Digital remittances | 4.59% | $9.18 |
| Non-digital remittances | 7.30% | $14.60 |
| Sending to Sub-Saharan Africa | 8.46% | $16.92 |
Worked example
How a hidden exchange margin adds up
Illustrative numbers: you send $200, the provider charges a $5 fee and converts the remaining $195 at 19.6 units per dollar, while the mid-market rate is 20. The recipient gets 3,822 units. At the mid-market rate with no fee, $200 would have bought 4,000 units. The 178-unit gap is worth $8.90, or 4.45% of what you sent, even though the advertised fee was only $5.
What is the 3% remittance target?
Under the UN Sustainable Development Goals, target 10.c commits countries, by 2030, to cut the transaction cost of migrant remittances to less than 3% and to eliminate corridors that cost more than 5%3. Progress is measured as remittance costs as a share of the amount sent3.
The G20 adopted matching goals in 2021 as part of a wider plan to make all cross-border payments cheaper, faster, more accessible and more transparent5. The Financial Stability Board, which coordinates the work, lists the main targets below.
G20 targets for cross-border payments Source: [5]
| Area | Target | Deadline |
|---|---|---|
| Remittance cost | Average cost of sending $200 at or below 3%, no corridor above 5% | 2030 |
| Retail payment cost | Average at or below 1%, no corridor above 3% | End-2027 |
| Speed | 75% of retail payments available to the recipient within one hour, the rest within one business day | End-2027 |
At 6.36% in Q3 20251, the global average was still more than twice the 3% goal. For how fast payments work inside a single country, see our guide to real-time payments.
How can I compare remittance providers?
Five checks before you send
- 1
Compare the amount received
Ask each provider how much will arrive in the recipient's currency. That single number includes both the fee and the exchange margin.
- 2
Check the rate against mid-market
Look up the mid-market rate on a reputable source and see how far the offered rate is from it.
- 3
Look for fees at both ends
Some costs are charged to the recipient or by their bank. Ask whether the quoted amount is what lands in their account.
- 4
Confirm timing and pickup
Check when the money will be available and whether it goes to a bank account, a mobile wallet or a cash pickup point.
- 5
Know your rights
In the US, providers must disclose fees, the exchange rate and the amount to be delivered for transfers over $15, you can cancel free of charge within 30 minutes in most cases, and you have 180 days to report an error7.
Risk warning
Check who you are paying before you send
Once a transfer has been collected or deposited abroad, getting it back can be difficult. Never send money to someone you have only met online or to settle an unexpected request for an urgent payment, and use providers that are licensed where you live.
What mistakes do people make when sending money abroad?
Common beginner mistakes
Comparing only the fee
A "no fee" offer can still be expensive if the exchange rate is poor. The fee is only one of the two cost components1.
Defaulting to a bank transfer
Banks were the most expensive channel on average in Q3 2025, at 14.99% for $2001. Check alternatives for small amounts.
Sending many small amounts
Small transfers cost more in percentage terms: the global average was 6.36% for $200 but 4.08% for $5001. Fewer, larger transfers can work out cheaper, if that suits the recipient.
Not keeping the receipt
The disclosure and reference number are what you need to cancel, trace or dispute a transfer.
Frequently asked questions
Why did the recipient get less than I expected?
Usually because of the exchange-rate margin, a fee charged at the receiving end, or both. Ask for the guaranteed amount to be received before you pay.
Is a zero-fee international transfer really free?
Not necessarily. The World Bank counts the exchange-rate margin as part of the total cost1, so a provider can charge no fee and still earn money on the rate.
How long does an international transfer take?
It depends on the route and the provider, from minutes to several business days. The G20's goal is for 75% of cross-border retail payments to reach recipients within an hour by the end of 20275.
Can I cancel a remittance after I pay?
In the US you can generally cancel within 30 minutes at no charge, unless the money has already been picked up or deposited7. Rules differ in other countries.
Are stablecoins a cheaper way to send money abroad?
They can move value across borders quickly, but the total cost depends on converting into and out of local currency at each end and on the service used. Our guide to stablecoins explains the risks.
The bottom line
Cross-border payments are slow and costly because they cross currencies, banks and rulebooks, often through a chain of correspondents. The global average cost to send $200 was 6.36% in Q3 2025, more than twice the 3% target set for 2030, and banks were the priciest channel. Before you send, compare the amount that will arrive, not the headline fee.
Sources
- Remittance Prices Worldwide, Issue 54 (Q3 2025) — World Bank, 2025 Primary source
- Remittance Prices Worldwide (database home page) — World Bank, 2025 Primary source
- Goal 10: Reduce inequality within and among countries — targets and indicators — United Nations, Department of Economic and Social Affairs, 2015 Primary source
- Remittances Slowed in 2023, Expected to Grow Faster in 2024 — World Bank, 2024 Primary source
- G20 Targets for Enhancing Cross-border Payments — Financial Stability Board, 2021 Primary source
- Correspondent banking — final report — Committee on Payments and Market Infrastructures, Bank for International Settlements, 2016 Primary source
- What is a remittance transfer and what are my rights? — Consumer Financial Protection Bureau Primary source
How we checked this page: every figure above links to the numbered source it came from. Spotted an error? Tell the desk — see our editorial policy.
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