Your bank quotes you 1% to send $200,000 to a supplier in Bogotá. You initiate the wire. Three business days later, your supplier calls to tell you they received $186,400. Where did the other $13,600 go?
This is not an unusual outcome. It is the predictable result of how traditional correspondent banking works—a system designed to distribute costs invisibly across a chain of intermediaries, each extracting a margin that is rarely disclosed to the originating party.
Here is where the missing money went:
Your bank's FX markup: $3,200 Your bank quoted you "1%" but that fee is calculated on the USD side. What they didn't tell you is that they also applied a spread on the USD/COP exchange rate—typically 1.5–2% from mid-market. On $200,000, that's an additional $3,000–$4,000 in hidden FX cost.
Correspondent bank 1 lift fee: $35 Your bank likely routes through a large U.S. correspondent bank (e.g., a major money center bank). That bank charges a "lifting fee" for handling the transaction—typically $25–$45, deducted from the payment in transit.
Correspondent bank 2 lift fee: $45 Depending on the routing, there may be a second correspondent bank in the chain. Another lift fee, deducted in transit. Your supplier doesn't know, and neither do you.
Receiving bank fee: $600 The Colombian bank receiving the funds charges a receiving fee—often 0.25–0.5% of the transaction, in addition to a fixed fee for international wire receipt.
Remaining FX slippage: ~$9,720 The majority of the gap comes from FX—the difference between the rate your bank quoted (already marked up) and the rate actually applied at each step of the correspondent chain, plus the conversion at the Colombian bank end.
Total: $13,600 lost to invisible fees.
The short answer is: they don't have to, and it's profitable.
The longer answer is structural. In the correspondent banking model, each bank in the chain is an independent entity with its own fee schedule. Your originating bank discloses their fees. They may or may not know what the downstream correspondents will charge. And even if they do, the disclosure requirements for international wire transfers in most jurisdictions don't require them to tell you.
The result is systematic opacity that benefits the banks and costs enterprises billions annually.
In theory, SWIFT gpi (Global Payments Innovation) was supposed to fix this. SWIFT gpi provides end-to-end tracking and requires banks to provide fee transparency. In practice, adoption has been uneven, the fee disclosures are often incomplete, and gpi doesn't eliminate the fees—it just makes them slightly more visible.
For Latin American enterprises, gpi penetration is particularly limited. Many regional banks are not gpi participants, meaning the tracking and transparency benefits don't apply to a significant portion of LATAM corridors.
Negotiate explicitly on total cost, not quoted rate. Ask your bank for the all-in cost—FX spread plus all fees—as a percentage of the transaction value. Get it in writing. Then actually receive a payment from your supplier to verify what arrived.
Use the SWIFT gpi tracker if available. If your bank participates in SWIFT gpi, you can often track where a payment is and what fees have been deducted at each step. This is imperfect but better than nothing.
Benchmark your corridors. Run test payments of known amounts to counterparties in your key corridors, then calculate the actual all-in cost from what arrived. Do this quarterly—rates change, routing changes, and fees change.
Consider stablecoin rails for cross-border payments. At 1.5% all-in—disclosed, transparent, with no hidden deductions in transit—USDC settlement eliminates the correspondent banking opacity problem entirely. What you see is what arrives.
The hidden cost of wire transfers is not just a payment efficiency problem—it's a P&L problem.
For an enterprise sending $2M/month in cross-border payments:
That's not a rounding error. For most enterprises, that's a meaningful contribution to EBITDA.
Use our savings calculator to model your specific numbers, or book a demo to see how Stabled compares to your current provider.
See how much your enterprise can save with Stabled's 1.5% flat-fee settlement.