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December is when currency transfers are at their peak. There are holiday or end-of-year bonuses, overseas travel, and gift purchases, which are some of the reasons why these exchanges spike at this time. When internationally, you could face forex charges, which include a transfer fee and the exchange rate markup. Combined, these costs can reduce the amount your receiver gets. Since we’re in December, let’s look at a few real-life examples and just how grave the impact of Forex fees is on an overseas transfer of US$1,000.

1. US Dollar to the Euro

With overseas conversions, the US Dollar to the Euro is the most common. It’s also one of the highly traded forex pairs in the currency market. Let’s go over the cost impact when sending US$ 1,000 to Euros to see the effect of Forex Fees on your transfers.

The table above shows a 4.45% difference in exchange rates between the best (Wise) and the worst (Paypal) payment providers. That means your receiver will receive €42.20 less — a combination of the lousy exchange markup and high transfer fee.

2. US Dollar to the British Pound

Another popular choice when sending money out of the US is with the British Pound. Several payment providers support transfers from to GBP. The table below shows the most popular transfer methods when wiring money to the UK.

Even with the British Pound, Wise still has the most competitive exchange rates while Paypal remains at the bottom. While the difference is slightly better at 4.36%, your receiver still gets £34.26 less.

3. US Dollar to the Mexican Peso

Our final currency transfer case study is the USD to the MXN or the Mexican Peso. Paypal was the worst option, being 4.21% more expensive than other providers. This resulted in the receiver being 851 Pesos short, not including transfer fees.

The Real Impact of Switching Currency Transfer Providers

Studying these three real-life transfers in detail, we see that switching from Paypal to Wise saves you just over 4%. Justin Grossbard, CEO of  explains, “Forex fee savings depend on the volume sent. Providers make money off the spread (the difference between buying and selling rates) and commissions (transfer fee).”

Below is a table highlighting the percentage difference between the Best and Worst Rates based on the amount sent from the US.

Justin explains further, “The trap lies in that people are often lazy with smaller transactions; this is why rates become significantly worse. It pays to establish a lowest-rate forex provider, whether sending money personally or through a company. The same logic applies when trading with forex brokers, who have large fee discrepancies in fees, often driven by volume.”

While US residents should select currency exchange providers based on fees and cost, they should also opt for providers with a money transmitter license in their home states.

What’s the Impact of Broker Fees When Trading Forex?

Currency Trading (often called ‘forex trading’) shares similarities with overseas money transfers. Traders select a currency pair, say the US Dollar to the Euro (EUR/USD), and speculate its movement in the active market.

The core difference is that trading brokers have leverage, which can amplify the modest daily back-and-forths of currencies on the market. The chosen broker impacts your fee rates with long-term results.

It’s important to note there are two primary fees most forex brokers charge:

1. Spread — Difference between the bid and ask/buy and sell
2. Commission — Cost of executing trades, commonly affected by trade volume.

Let’s run through a couple of these scenarios to see the impact of fees, with a sample trade size of 1,000,000 in base currency USD. You can also use the CompareForexBrokers to see the resultant forex broker charges on the forex pair chosen, and the base currency of the account.

1. USD/EUR Forex Pair

Being the most traded pair, the Euro to US Dollar is the benchmark for most currency brokerage. The table below illustrates the fee difference between 6 different brokers, up to 86%.

2. USD/GBP

Now, let’s compare the same brokers for the US dollar to the British Pound. In most cases, the cheapest and most expensive remain the same. Here, however, the difference between them is almost double.

Key Findings When Comparing Forex Brokers’s Fees

Our case studies show that the spread fee has a greater variance than commission rates. Looking at various brokers’ published average spreads in December 2024, you’ll observe the considerable gap—as with Eightcap vs. Dukascopy.

The key element to understand here is that a broker’s average spreads change monthly. While the handful of the tightest spread brokers remain at best value over time, the lowest spread broker sees a change monthly. The opposite is true for commission rates, which brokers rarely change.

Justin Grossbard advises, “Forex traders should first look at the commission rate brokers based on their preferred base currency as a baseline of comparing brokerage.” This is because commission rates, at most, are adjusted annually while spreads change monthly.

Justin also explains, “Traders should eye the fee charges on other CFD instruments as well since they may want to trade from shares, commodities to indices too.”

Checklist to Consider When Choosing a Forex Provider

Whether you’re looking to send money overseas or trade forex, here are some of the recommended key factors to observe beforehand (in order of importance).

1. Regulation

It’s imperative that your chosen broker or currency exchanger is regulated in your home country. For example, a currency exchange provider in the US should be FinCEN registered, while a forex broker must be CFTC registered.

Unfortunately, many Forex scams remain today but can be avoided by choosing regulated providers. Another benefit of a regulated broker is they provide protections (e.g., negative balance protection) to ensure you don’t lose more than what you have in your account.

2. Fees

Remember, with such a significant variance in the forex brokerage amount charged, it pays to compare the fees before finalizing a broker.

3. Platform

The user interface of the forex provider really matters. This is why many still use PayPal despite its terrible exchange rates. Open a demo account, usually with no deposit, so you can gauge the comfort of the broker’s interface. It’s also a good avenue to trade as a risk-free trade practice before laying down real money.

4. Customer Service

Both with sending money overseas and trading forex, you’re bound to need help at some point. Consider available support points (e.g., Live Chat) and their hours of operation. Often, testing their customer service before joining shows you their responsivity and skill levels.

5. Range of Markets

Scrutinize the range of offered. For example, if you’re looking to send money overseas, you might want to ensure that your currency exchange provider has the currency you wish to send in.

While most providers offer to send in USD, Euro, the Canadian Dollar, or the British Pound, fewer options are available when sending to the Philippines or India, where sub-contractors often operate. The same issue is valid with forex brokers, with some only having a handful of currency options or cryptos.