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How Costly Are Cross-Border Payments for Firms?

Author

Listed:
  • Jiaqi Li

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.

Suggested Citation

  • Jiaqi Li, 2026. "How Costly Are Cross-Border Payments for Firms?," Staff Analytical Papers 2026-49, Bank of Canada.
    • Handle: RePEc:bca:bocsap:26-49
    DOI: 10.34989/sap-2026-49
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    Keywords

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    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • F - International Economics
    • F2 - International Economics - - International Factor Movements and International Business
    • F29 - International Economics - - International Factor Movements and International Business - - - Other
    • Y - Miscellaneous Categories
    • Y1 - Miscellaneous Categories - - Data: Tables and Charts
    • Y10 - Miscellaneous Categories - - Data: Tables and Charts - - - Data: Tables and Charts

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