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The "hidden fees" in your Bank rates and how to calculate your actual fx cost

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srivatsan-sridhar
Srivatsan Sridhar10 August 2023

Our aim at Skydo is to make international payments seamless and transparent.  By providing conversion at live mid-market rates and a fixed fee, we wanted to challenge hidden charges prevalent in banks. These covert fees take the form of Swift and intermediary bank fees, fx markup, FIRA, and processing costs. The fx markup, often opaque, can be a hidden cost. Without knowing the benchmark or timing, customers can't determine their actual costs. In contrast, our approach ensures clear pricing, enabling exporters to precisely calculate their actual expenses. If you don't have the time to read the entire article, skip to the table in para 6. 

Why we started Skydo

Founded in March 2022 by Movin Jain and myself, Skydo emerged from Movin's experience in UPI payments with India's major UPI player. His dream is to make b2b payments as effortless as UPI transactions. As a long-time exporter, I aim to bring transparency to international payments - business owners should know how much they're paying without needing complicated spreadsheets to figure it out. We have received a fantastic response from customers for our product. This has humbled us both, and only strengthened our belief that we are solving a real problem.

Pricing transparency: what does it mean? 

The transparency in pricing that Skydo is bringing about is challenging the hidden margins that payment service providers have long enjoyed. So, naturally many of them are lowering their prices which is great for the customer. However, some of them are merely creating a perception of lower prices without actually lowering them. This post is my attempt to help customers understand the different cost elements involved in your fx conversion, so you can do two things: 1) evaluate if your payments service provider (bank or platform) is actually transparent with you, and 2) learn to calculate the real fx costs that your payment provider has charged. 

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