The expansion of a business into another country may sound simple from the outside. Adding new countries, currencies, and payment methods is expected to increase revenue. However, international payments introduce two separate problems. The first is declined payments. The second is increased costs due to numerous fees. These can include cross-border fees from the payment network, the payment provider’s foreign exchange fees, the card issuer’s foreign transaction fees, dynamic currency conversion fees, and bank payout fees.
This is why evaluating cross-border payment processing solutions in 2026 will reveal different issues. Some problems will be on the acceptance side of the transaction, others on the settlement side, and some entirely on the card issuer. The best solution for a merchant is one that reduces declined payments without increasing foreign exchange costs.
What Merchants Mean by Cross-Border Payment Fees
When merchants use the term cross border payments fees, they mean the total cost of an international transaction. Some of those costs may be network costs. According to Stripe, scheme fees can include additional authorization and cross-border transaction fees. According to Stripe’s currency documentation, FX fees can also be incurred if the presentment and settlement currencies differ. Thus, every international transaction will have both network and provider costs.
The same is true of how payouts work. Adyen’s documentation on payout methods states that cross-border payouts go through correspondent banks and may incur fees. When merchants compare cross-border fx and currency conversion fees, payout platforms, they must also consider how the provider performs local payouts compared to cross-border transfers.
Why International Transactions Get Declined More Often
The decline in international transactions is not just due to fraud. Many of these declines are due to the card issuer’s unfamiliarity with international transactions, the currency, and the routing of transactions from the customer to the merchant. Stripe specifically states that using a local presentment can improve customer conversion and authorization rates. Additionally, both Stripe and Adyen state that routing transactions through a local or regional acquiring bank will reduce the friction that is associated with cross-border acquiring.
The two aspects of the transaction that are often connected are the fees and the approval. Stripe’s intelligent-routing guide specifically states that routing transactions to local and regional acquirers can increase transaction approval rates and reduce cross-border transaction fees. This is because the routing engines take into account the approval rates of each potential routing option.
What To Ask Providers in 2026
When you are comparing cross-border payment processing solutions, you should ask five basic questions. Specifically, which currencies can you present in, which currencies can you settle in, do you have local acquiring, and how do you price FX and route international cards? These types of questions will get you much closer to understanding the margin and approval that a provider will offer.
The questions you ask for cross-border payouts will be different. Specifically, which payout corridors are local and which are cross-border, which currencies do you support for recipients, and when does your provider go to correspondent banking? A provider may offer global payment solutions, but they may introduce unnecessary friction and FX leakage in your payout corridors.
Why 2026 Is More About Optimization Than Expansion
By 2026, most larger merchants will know that they can sell internationally. The challenge will be knowing whether they have the right configuration for their cross-border operations. The focus will shift to the combined impact of approval, routing, fees, and currency when making decisions on how to route payments.
International payments will shift from market entry to margin. It is not the merchants with the most international coverage that will win, but the merchants that understand which currencies to offer and how to acquire those.
Six Ways to Reduce Declines and FX Costs
Use Local Presentment Wherever It Makes Sense
Stripe believes that presenting prices in a local currency to the customer can increase the chances of a successful transaction (by increasing the authorization rate). The documentation for multi-currency on Stripe also specifically says that using local presentment can help merchants to avoid currency conversion costs for their customers. For most merchants, this is the quickest way to remove any friction that a customer might feel when completing a purchase from an international market. This does not necessarily mean that every merchant must offer every customer every possible currency. Instead, the recommendation is for merchants to ensure that the currency that they present to their customers reflects the market that they serve. If a merchant sells most of their products to a specific country, then local presentment is the best solution for that customer.
Add the Right Settlement Currencies
The documentation on Stripe also makes it clear that foreign exchange fees (FX) happen if the presentment currency and the settlement currency for the merchant are different. Adyen includes a similar statement, stating that they offer like-for-like settlement if the currency is one that is supported as a settlement currency by the customer’s payment method. By adding these right settlement currencies, merchants can avoid unnecessary FX conversions. This is most relevant for large merchants who have a high volume of sales in a few specific markets. For example, if a business is taking many EUR or GBP transactions but is settling in USD, it means it is incurring FX costs that it does not need to. This is one of the major differences between global payment processing solutions and cross-border payment processing solutions.
Route to Local or In-Region Acquirers
The documentation that comes with Stripe specifically says that since international cards will attract additional fees from the card schemes, routing these transactions through domestic processing will avoid incurring those costs. The documentation also states that routing to local or in-region acquiring banks will both increase the chances of processing the transaction and reduce cross-border fees. This is one of the main reasons for the use of local acquiring in general. While this does not suggest that every merchant will need to create separate entities and bank accounts in every market that they serve, it does suggest that merchants and acquiring companies need to understand which markets will work best with local acquiring.
Treat DCC as a Separate Pricing Decision
Dynamic currency conversion (DCC) is not the same as local presentment. According to the terms set out by Visa, DCC is when a merchant or automated teller machine (ATM) offers the customer the option of converting the transaction into the customer’s home currency. The offer will include the exchange rate and any additional fees. Mastercard says the same, albeit more directly: offering immediate conversion to a customer’s home currency may be convenient, but it comes at a cost as it involves adding extra FX fees on top of the transaction value. For merchants, DCC means that offering this as an optional service must be treated separately from the use of local presentment. Local presentment means pricing in the local market’s currency. DCC is a separate process for currency conversion.
Stop Mixing Issuer FX Fees With Merchant FX Costs
Using a no fx fee credit card means that the cardholder avoids foreign transaction fees set by the issuing bank. However, such a card will not avoid merchant-specific fees like those from the payment scheme, the acquiring bank, or the payment processing service (PSP). For example, both Visa and Mastercard state that a bank may impose additional fees on these transactions. This distinction is crucial to understand. The same is true of card issuing solutions that offer zero FX fees. Using such a solution may improve the user’s card experience, but it will not eliminate merchant-specific charges.
Design Payout Flows to Minimize Conversion and Bank Charges
Even if a merchant avoids FX and bank charges at the time of purchase, those costs can still be incurred during the payout stage. Both Stripe and Adyen mention that FX fees may occur when a business makes a payout. Adyen’s documentation also goes further to say that using local payout methods can help to avoid fees that the recipient bank may charge on cross-border transfers. Adyen also states that making cross-border payouts involves working with correspondent banks, and there are potential fees and delays involved. In general, then, it is clear that both merchants, platforms, and marketplaces need to consider the design of the payout model. The best solution will usually involve local settlements, minimizing the number of FX and bank charges made on the transaction. A true cross-border transfer should only be used in the situation in which local payout is neither possible nor desired. This is the main question that needs to be answered by fx and currency conversion fees payout platforms.
FAQs
Q: What are cross border payments fees?
A: Cross-border payment fees are the term used for the additional costs that may be associated with moving money across different countries and currencies. These can include fees from the network, the provider, the card issuer, and the payout bank.
Q: Do no fx fee credit card products reduce the merchant’s cross-border fees?
A: No. A credit card with no foreign transaction fees means the card will not charge the consumer when used in another currency. However, this does not mean that the merchant will not face cross-border fees on the transaction.
Q: What should merchants look for in a cross-border payment solution?
A: When looking at cross-border payment solutions, merchants should look for providers that offer local presentment, the ability to settle in the appropriate currency, acquiring from a local source, and competitive foreign exchange rates.
Q: How should merchants compare cross-border fx and currency conversion fees among payout platforms?
A: To compare fx and currency conversion fees, merchants should look closely at whether the provider makes local or cross-border payments, whether there is like-for-like settlement, if there are correspondent banks involved, and how many lifting fees or bank charges may appear during the payout.
Q: Why do international credit card payments get declined more often?
A: International credit card payments are declined more often because banks and payment networks view cross-border transactions as riskier and perform stricter fraud checks. Factors such as foreign locations, unusual currencies, unfamiliar merchants, IP or device changes, and added security steps like 3D Secure increase suspicion. Additionally, more intermediaries and rules in routing international payments make small issues—like address mismatches, outdated card info, or risk limit breaches—more likely to cause declines than domestic payments.
Conclusion
Many merchants make cross-border payments cost-intensive due to a lack of understanding of the various fees involved. The decline in the number of transactions, the fees from the card scheme, FX fees, foreign transaction fees from the financial institution, DCC fees, and the payout bank all add up to high costs for merchants. In 2026, focusing on the elements that can be controlled will help merchants to significantly reduce the cost of cross-border payments.
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Sources
- Stripe. “The FX Quotes API.” Accessed March 2026.
- Stripe. “Work with Multiple Currencies.” Accessed March 2026.
- Stripe. “A Guide to Managing Network Costs.” Accessed March 2026.
- Stripe. “A Guide to Intelligent Payment Routing.” Accessed March 2026.
- Stripe. “Local Acquiring 101.” Accessed March 2026.
- Adyen. “Supported Payout Currencies.” Accessed March 2026.
- Adyen. “Pay Out to Your Users.” Accessed March 2026.
- Visa. “Dynamic Currency Conversion Explained.” Accessed March 2026.
- Visa. “Exchange Rate Calculator.” Accessed March 2026.
- Mastercard. “Currency Exchange Rate Calculator.” Accessed March 2026.
- Mastercard. “Frequently Asked Questions.” Accessed March 2026.
