trip gain

Foreign Exchange Fee

What is Foreign Exchange Fee?

A Foreign Exchange Fee, also known as a currency conversion fee, is typically a percentage of the transaction amount charged by financial institutions when a purchase is made in a foreign currency. This fee is added on top of the converted amount and can range from 1% to 3%, depending on the card issuer or bank. These fees are often included silently within the final transaction cost, making it essential for companies to be aware of them when budgeting for international trips.

 

In corporate travel, foreign exchange fees can accumulate quickly, especially for frequent travelers who book hotels, flights, meals, or services abroad. Without clear visibility into these charges, businesses may underestimate their total travel spend, leading to budget overruns and inaccurate financial reporting. Tracking these fees is key to optimizing travel and expense (T&E) management.

 

Expense management tools like TripGain help companies monitor and report foreign exchange fees clearly. By automatically flagging or categorizing these charges, organizations can gain transparency, manage employee reimbursements fairly, and negotiate better rates with banks or card providers for future travel.

Examples In Corporate Travel And Expense
1.
Hotel Booking In A Foreign Currency
A Manager Books A Hotel In Paris Using A Corporate Credit Card And Incurs A 2.5% Foreign Exchange Fee On Top Of The Converted Cost.
2.
Expense Report Line Item
A Salesperson Pays For Client Dinner In Tokyo, And The Foreign Exchange Fee Appears As A Separate Line Item In Their Expense Report.
3.
Annual Cost Analysis
A Company Reviews Annual Travel Expenses And Finds That Foreign Exchange Fees Added 5% To Their International Travel Costs, Prompting A Change In Card Providers.
Frequently Asked Questions About Foreign Exchange Fee
1.
What is a foreign exchange fee in business travel?
It’s a charge applied when a corporate card is used in a different currency, increasing the total expense amount.
2.
How much is the typical foreign exchange fee?
It usually ranges from 1% to 3% of the transaction value, depending on the bank or card provider.