What is the mid-market exchange rate?

The mid-market rate is the real exchange rate that banks and institutions use to trade currencies between themselves. This is the fair rate before any markup is applied.

How much do Canadian banks mark up on foreign exchange?

Canadian banks like RBC, TD, BMO, Scotiabank, and CIBC typically add 2–3% markup on top of the mid-market rate. They don't disclose this — they just show you 'their rate' as if it's the market price.

What are the hidden fees on international wire transfers?

On top of FX markups, banks charge $25–$50 per wire transfer for sending, and the receiving bank often takes a cut too. Combined with the FX markup, a single $13,520 conversion can cost $393 in hidden fees.

How much can hidden bank FX fees cost a business annually?

For a business doing 10 FX transactions per month at $13,520 average, hidden fees can total nearly $47,160 per year — the equivalent of a full-time employee's salary.

The True Cost of International Wire Transfers for Canadian Businesses

When your business sends an international wire transfer, the bank charges you a fee — typically $30 to $80 depending on the bank and destination. That fee shows up clearly on your statement. You see it, you accept it, you move on.

But that wire fee? It's the minor cost. The real expense is the FX markup buried in the exchange rate — and it can be 10x to 50x larger than the wire fee itself.

Let's unpack the true, total cost of sending money internationally from a Canadian business bank account.

The Double Hit: Wire Fee + FX Markup

Every international wire transfer that involves a currency conversion hits you twice:

The wire transfer fee — a flat fee per transaction ($30–$80 at most Big Five banks)
The FX markup — a percentage spread between the mid-market rate and your bank's rate (typically 1.5%–3%)

Most business owners focus on the wire fee because it's visible. But the FX markup is where the real money goes.

Example: You wire $50,000 CAD to a US supplier.

| Cost Component | Amount | |---|---| | Wire transfer fee | $45 | | FX markup (2.5% spread) | $1,250 | | Total cost | $1,295 |

The wire fee is 3.5% of the total cost. The FX markup is 96.5%. And yet most businesses only negotiate the wire fee.

Wire Transfer Fees by Bank

Here's what the Big Five charge for outgoing international wires:

| Bank | Standard Wire Fee | Online Wire Fee | |---|---|---| | RBC | $45–$80 | $35–$45 | | TD | $30–$80 | $30–$40 | | BMO | $30–$45 | $25–$35 | | Scotiabank | $35–$50 | $30–$40 | | CIBC | $25–$40 | $25–$30 |

These fees can sometimes be reduced or waived for commercial banking clients with high transaction volumes. But remember — the bank can afford to waive a $45 wire fee when they're making $1,250 on the FX markup.

For a detailed comparison of bank FX spreads, see our BMO vs Scotiabank vs CIBC comparison.

The Intermediary Bank Problem

International wires routed through the SWIFT network often pass through intermediary (correspondent) banks. Each intermediary can deduct a fee — typically $15–$30 — from the transfer amount. This means your recipient may receive less than you sent.

For a $5,000 wire, losing $30 to an intermediary is a 0.6% haircut on top of the FX markup and your bank's wire fee. For frequent small-value wires, these intermediary fees add up fast.

The triple hit on a $5,000 international wire:

Your bank's wire fee: $45
FX markup (2.5%): $125
Intermediary bank fee: $25
Total: $195 (3.9% of the transfer)

That's nearly 4% of the transaction value — on a $5,000 payment. Most business owners would be shocked.

Annual Cost Projections

Let's model the total cost for businesses with different wire transfer volumes:

Small Business: 5 wires/month, avg $10,000

Wire fees: $2,700/year
FX markup (2% avg): $12,000/year
Total: ~$14,700/year

Mid-Size Business: 20 wires/month, avg $25,000

Wire fees: $9,600/year
FX markup (2% avg): $120,000/year
Total: ~$129,600/year

Growing Company: 10 wires/month, avg $50,000

Wire fees: $5,400/year
FX markup (1.5% commercial rate): $90,000/year
Total: ~$95,400/year

These aren't extreme examples. Any Canadian business with US suppliers, international contractors, or overseas operations is likely in one of these brackets.

Why Businesses Don't Notice

Several factors conspire to keep these costs invisible:

FX markup doesn't appear on statements. Your bank shows the exchange rate used and the resulting amount. It doesn't show the mid-market rate or the spread. To understand how this opacity works, read our explainer on mid-market rate vs bank rate.

Wire fees feel "normal." $45 per wire seems reasonable for an international transfer. Business owners anchor on this visible cost and assume it's the bulk of what they're paying.

Costs are spread across transactions. $1,250 in FX markup on a single wire doesn't trigger alarm bells the way a $15,000 annual invoice would — even though that's exactly what it adds up to.

Nobody's comparing. Unless you're checking mid-market rates after every wire, you have no benchmark. Banks are counting on this. We explored the economics behind this in how Canadian banks make billions on FX.

Smarter Alternatives

Canadian businesses don't have to accept the wire-plus-markup model. Here are better approaches:

Batch Payments

Instead of sending 20 individual wires per month, consolidate into fewer, larger payments where possible. This reduces wire fees and may qualify you for better FX rates. More on this in our guide to cutting FX costs for SMBs.

FX Specialists and Fintechs

Providers like Wise, OFX, and others offer international transfers with FX spreads of 0.2%–0.7% and much lower (or zero) wire fees. For a $50,000 transfer, that's a savings of $600–$1,100 per transaction.

Forward Contracts

If you have predictable payment schedules, locking in exchange rates with forward contracts eliminates rate volatility and can reduce effective spreads. See our FX hedging guide for details.

Multi-Currency Accounts

Holding funds in USD (or other currencies) and paying directly avoids unnecessary conversions. If you receive USD revenue and pay USD expenses, converting through CAD is a needless round trip that costs you twice.

We compare all of these options in our best FX alternatives guide.

How to Audit Your Wire Transfer Costs

The first step is quantifying the problem:

Pull 6 months of bank statements
List every outgoing international wire with the amount, currency, and exchange rate used
Look up the mid-market rate for each transaction date
Calculate the spread on each transaction
Add up the total FX markup + wire fees

The result will be your true cost of international payments. It's almost always higher than people expect.

Don't want to do this manually? Loop's free FX audit calculates your total wire transfer costs — including hidden FX markup — automatically.

The Bottom Line

The $45 wire fee is a distraction. The real cost of international wire transfers is the FX markup that doesn't appear on your statement. For most Canadian businesses, the invisible cost is 10x to 30x larger than the visible one.

Once you see the full picture, optimizing becomes a no-brainer.

Run your free FX audit → See your real wire transfer costs