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Cross border fees: What they are and how they work.

Planning to sell overseas? Be ready to pay this mandatory processing fee.

Updated

Cross border fees are an inescapable part of international transactions. Learn to recognize this compulsory fee and to identify whether your payment processor is inflating the cost.

What is a cross border fee?

Businesses pay cross border fees when customers pay with credit cards that originate from another country. These fees are set by card networks — think Mastercard and Visa — and are passed on to merchants as an added surcharge.

This fee pops up during online and in-person transactions. Essentially, anytime someone uses a credit card issued in another country to make a purchase from your store, you’ll encounter a cross border fee.

Why am I being charged this fee?

Moving and converting currencies involves administrative work on behalf of the card issuer. It accesses the international credit card processing network and takes risks, depending on the currency. Any fees involved are passed onto merchants.

These fees operate under different names, depending on the issuer. Mastercard calls it a Cross Border Fee, while Visa refers to it as an International Service Assessment fee.

Do all providers charge cross border fees?

Yes — all payment processing providers charge cross border fees because these fees are set and required by card issuers.

How much do cross border fees cost?

Cross border fees vary by card issuer and the currency the transaction is settled in, but typically range from 0.4% to 1.2% of the transaction cost.

So, let’s say you sold something online to a customer based in the UK for $100 USD. On your next processing statement, you’ll see a cross border fee between $0.40 and $1.20, depending on which card issuer processes the transaction.

See a fee for a foreign transaction that looks suspiciously high? In addition to currency conversion fees, your payment processor may also tack on its own markup fee. This is something to be wary of with third-party flat-rate processors, like PayPal and Stripe.

And that’s because the flat-rate pricing model doesn’t break down per-transaction costs the way more transparent pricing structures do, like interchange-plus pricing. If your processor charges a flat rate, ask about potential markups on cross border fees.

How can I avoid paying cross border fees?

The only way to avoid paying a cross border fee is to stop selling internationally. Because the credit card issuers assess these fees, there’s no room for negotiation.

On the other hand, markups on cross border fees aren’t a necessity. You can avoid them by using a payment processing provider that doesn’t add a markup to cross border fees.

How to tell if you’re being charged cross border fees.

You’ll find cross border fees in your monthly processing bill under different names. Visa calls its cross border fees International Service Assessment Fees, while Mastercard simply calls them Cross Border Fees — also seen on bills as ISAF or CBF.

Compare payment processors

If you’re being charged a markup on cross-border fees, or if your monthly payment processing bill has more fees than you’re comfortable with, compare other providers to find one that fits your needs.

Data indicated here is updated regularly
Name Product Monthly fees start at Processing fees start at Processing time High-risk merchants accepted?
Chase Merchant Services
None
2.6% + 10¢ per swiped credit card
Next day when you deposit into a Chase business checking account
No
Accept, process and deposit customer payments in your store, online or on-the-go.
Fattmerchant
$99/month
$0.08 + interchange per transaction
Next day for qualified businesses
No
Businesses that process more than $10,000 monthly can save with Fattmerchant's interchange+ pricing.
Square
None
2.9% + 10¢
Next day
No
Square is a one-stop shop with both e-commerce and in-person solutions.
Helcim
$20/month
1.92% + $0.08 per transaction
Two business days
No
Conveniently packaged into three service tiers for in-person and online sales.
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Compare up to 4 providers

Bottom line

Cross border fees are unavoidable if you plan to sell to international customers. But knowing how to identify these fees on your monthly processing bill can help you spot markup.

Find a payment processor that offers transparent pricing so you know exactly how much you’re charged per transaction.

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