FX Fees
Foreign exchange fees are charges applied when converting one currency to another during international payments, including flat transaction costs and hidden markups.
What is FX Fees?
FX fees (foreign exchange fees) are charges applied when converting one currency to another - usually during international payments. These fees often include both: Flat transaction charges (e.g., $10-$50) and Hidden markups on the exchange rate (2-4% above the real mid-market rate). They commonly affect international payroll, global hiring, and cross-border contractor payouts.
How it works
- FX fees typically include:
- Flat fees: Fixed per-transaction costs charged by banks or processors (e.g., $25 per wire).
- Exchange rate markups: A hidden 2-4% increase over the real mid-market rate.
- Some platforms claim "no fees" but profit from these markups behind the scenes.
- Example:
- Paying $2,500 to a contractor with a 3.2% markup = $80 per transaction
- → That's $960 per year lost, per contractor.
Why it matters
- FX fees quietly drain money across every international payment:
- Budget loss: Hidden fees cut into growth funds
- Talent friction: Contractors receive less than promised
- Reduced appeal: Global offers become less competitive
- Scaling pain: Costs compound as your global team grows
- Platforms like Sigma avoid these fees using USD wallets and stablecoin infrastructure - so your team keeps more of what you pay them.
Example
A U.S. startup pays an Argentine contractor $2,500/month. With a 3.2% FX markup, they lose $80/month → $960/year. By switching to a USD wallet, the full $2,500 is received with zero fees, improving satisfaction and retention.
