If you earn from global clients but spend in India, you’ve probably had that “wait…why did I get less INR?” moment. It’s not just one deduction. It’s usually a trio—transfer fees, FX spread, and intermediary bank charges—quietly chipping away at your payout.
This guide explains FX spread explained in simple terms, compares transfer fee vs FX spread, breaks down correspondent bank charges, and shows you how to estimate your landed INR before the money even moves.
The Three Costs at a Glance
| Cost | What it is (plain English) | Who sets it | When you see it | Typical shape | What to watch for |
| Transfer fee | A visible “service charge” to send/receive money | Banks/Platforms | Usually shown upfront | Flat (e.g., $5–$40) or % on platforms | Whether you or the sender pays |
| FX spread | Hidden mark-up in the exchange rate | Converter (bank/app) | Rarely shown explicitly | % gap from mid-market (e.g., 0.3%–4%+) | A “great rate” vs the real market rate |
| Intermediary charges | Toll-booth fees from banks in the middle of the route | Correspondent banks | Almost never upfront | Flat and/or %; varies by corridor | Hard to predict; depends on routing |
Key insight: Focusing only on “low fees” can mislead. Transfer fee vs FX spread vs intermediary charges is the real battle.
Transfer Fees: The Obvious “Ticket to Ride”
- What it is: A clearly stated charge for sending or receiving the transfer.
- Why it matters: Easy to plan, easy to negotiate. Many senders assume you will absorb it—set expectations upfront.
Tips to reduce impact:
- Put “Amount to be received (net of fees): ₹…” on your invoice.
- Ask clients to use OUR charge type, where they cover costs. If they use SHA (shared) or BEN (beneficiary pays), expect inward remittance deductions.
FX Spread Explained (The Hidden Cost)
- What it is: The difference between the mid-market rate (Google/Reuters) and the actual rate you get.
- Why it bites: Even with “zero transfer fee,” a 2% spread on $10,000 = $200 lost in INR.
How to spot FX spread:
- Check live mid-market rate.
- Ask your provider for the exact INR rate.
- Compute % difference.
Rule of thumb: On larger transfers, a tight FX spread saves far more than a low flat fee.
Intermediary Bank Fees (The Invisible Middlemen)
- What it is: Banks in the middle of a SWIFT payment route (correspondent banks) may deduct fees—like tolls on a highway.
- Why tricky:
- Not quoted upfront.
- Varies by corridor and bank relationships.
- Flat, percentage, or both.
When to expect correspondent bank charges:
- SWIFT wires between banks with no direct tie.
- Less common currency corridors.
- When the sender chooses SHA or BEN (shared/beneficiary pays).
This is why many Indian freelancers see SWIFT fees India deducted unpredictably.
Total Landed INR Formula
Always forecast your net INR received before accepting terms.
Formula:
Landed INR = (Foreign Amount – Outgoing Transfer Fees – Intermediary Bank Fees)
× (Quoted INR Rate with FX Spread)
– Receiving-Side Fees
Where:
- Foreign Amount = What client pays you (e.g., $2,000).
- Outgoing Transfer Fees = Sender’s platform charge.
- Intermediary Bank Fees = Estimate based on past hops ($15–$40 typical).
- Quoted INR Rate = Includes FX spread.
- Receiving-Side Fees = Indian bank charges (sometimes ₹0, sometimes small).
Quick Example
- Invoice: $1,000
- Mid-market: ₹83.00/$
Provider A: Fee $5, Rate ₹81.60 (≈1.7% spread)
Provider B: Fee $20, Rate ₹82.80 (≈0.24% spread)
Intermediary charge assumed: $15
➡ Provider A landed INR: ≈ ₹79,968
➡ Provider B landed INR: ≈ ₹79,902
On small amounts, flat fees matter more. On big transfers, tight FX spreads dominate.
Side-by-Side: What Actually Changes Your Payout
| Lever you pull | Helps against | Real-life use |
| Ask for OUR charges | Intermediary + transfer fees | Put in contract: “Sender covers transfer & correspondent charges.” |
| Choose tighter FX spread | FX spread | Compare quoted INR with mid-market, not “zero fee.” |
| Batch payments | Flat transfer fees | Fewer transfers = fewer flat fees. |
| Route awareness | Intermediary bank charges | Track past deductions; prefer consistent providers. |
| Quote in INR | FX spread volatility | Shift risk to client; price includes expected costs. |
Pocket Checklist Before You Send an Invoice
✅ Net INR you want to receive: ₹_____
✅ Invoice foreign amount: $/€/£ _____
✅ Who covers fees? Prefer OUR.
✅ Provider comparison: INR rate + transfer fee.
✅ Estimate intermediary/correspondent charges.
✅ Run Total Landed INR Formula.
✅ Add buffer for FX rate movement.
FAQs
Q: Do intermediary bank fees happen every time?
Not always—depends on SWIFT routing. Past transfers in the same corridor are the best predictor.
Q: Is “no fee” the best deal?
Only if the INR rate is close to mid-market. Otherwise, the hidden FX spread costs more.
Q: What about SWIFT fees in India?
Some banks credit remittances with no explicit receiving fee; others add small charges. But even if SWIFT fees are waived, the FX spread still applies.
Q: Can I avoid FX spread entirely?
Not really. Someone pays for conversion. Your goal is to minimize and make it transparent.
Final Takeaway
- Transfer fees = visible, negotiable.
- FX spread = hidden heavyweight cost.
- Intermediary bank charges = unpredictable but trackable.
Your strategy:
- Push senders to cover fees (OUR).
- Compare INR rate vs mid-market (not just “no fee”).
- Track corridors for consistent deductions.
- Always run the Total Landed INR Formula.
With this approach, you’ll optimize transfer fee vs FX spread vs intermediary charges—and keep more rupees in India where they fuel your business growth.
Conclusion
When it comes to inward remittance, the transfer fee is only the tip of the huge iceberg. FX spreads and intermediary bank charges can quietly eat into your final settlement which leads to lower saving or profit. With HiWiPayExim, exporters gain clarity on the true cost of transactions and unlock higher efficiency in cross-border payments.
