What are foreign transaction fees and how do they work?

When you make a purchase in another currency, some banks and card companies charge a fee to facilitate the transaction. And while fees on foreign transactions are common, some financial institutions offer this service at no extra cost.
Illustration of a woman using her mobile and 3 coins coming out of it.

What is a foreign transaction?

A foreign transaction is an electronic payment made in a currency other than your own. Here are some types of foreign transactions:
  • ATM withdrawals in a foreign country
  • Online card payments in currencies other than your banking currency
  • Payments made while abroad
  • International money transfers

Foreign transaction fees‌: A breakdown

Foreign transaction fees are often charged by a bank or card company on any transaction made outside your currency or region of use. The total fee charged is generally broken down into two parts. 
  1. First, there’s a currency conversion fee for transferring the money from one currency to another, typically around 1%.
  2. Second, there’s the transaction processing fee (usually around 2%) charged by the bank or card company for providing an international service.
N26 cross-border payments feature showing a bank transfer from euros to Us dollars.

Why do we pay foreign transaction fees?

Foreign transaction fees are designed to cover the cost of converting one currency into another. Unlike standard transfers, transfers between currencies are complex, involve more channels, and take longer — often resulting in higher fees. If you’re planning to send money abroad, it’s worth taking currency conversions and transaction fees into account to avoid any unpleasant surprises. Learn more about transaction fees abroad and how they work here.

Avoiding extra foreign transaction fees abroad

There are several ways to avoid extra foreign transaction fees. For example, try bringing a no-fee debit card when you travel, withdrawing currency ahead of your trip, and avoiding multiple visits to foreign ATMs. It’s also a good idea to pay cash in the local currency to sidestep any transaction fees on site.

Foreign transactions‌ and ‌currency exchange rates

In addition to watching out for high foreign transaction fees, it’s important to consider currency exchange rates when making payments abroad. These rates are based on global trade markets and are used to calculate the sender’s currency into the recipient’s. Need a refresher on foreign currency exchange? Check out our handy guide here.

Do all companies charge foreign transaction fees?

Not all banks or card companies charge foreign transaction fees‌ — ‌some absorb the costs themselves. To learn what fees you might be subject to, check with your bank or card issuer. At N26, all account holders can make card payments overseas for free, with no foreign transaction fees on top. Discover all the N26 benefits of our accounts here.

Get ‌free payments worldwide and no hidden fees with N26

At N26, all our accounts feature free card payments worldwide — as often as you like and with no foreign transaction fees. N26 You and Metal account holders can withdraw cash for free at foreign ATMs, while customers with Standard and Smart accounts are charged a fixed 1.7% conversion fee on the withdrawal amount.
N26 transparent Mastercard, Charcoal black Metal Mastercard and teal Mastercard.

N26 You and Metal: Get unlimited free ATM withdrawals abroad

As an N26 You or Metal customer, not only can you enjoy unlimited free card payments globally, you can also withdraw cash in any currency as often as you want — free of charge. You’ll also get real-time exchange rates when making international transfers. Plus, you’ll benefit from a travel insurance package that includes trip cancellation and medical coverage.

Find a plan for you

N26 Smart

The bank account that gives you more control

N26 You card, Teal.
N26 You card, Ash.
N26 You card, Wheat.
N26 You card, Petrol.
N26 You card, Rhubarb.


  • Free Virtual Card

  • Up to 10 Spaces sub-accounts

  • Support Center phone number

  • Round-ups


N26 You

The debit card for everyday and travel

N26 You card, Rhubarb.
N26 You card, Petrol.
N26 You card, Wheat.
N26 You card, Ash.
N26 You card, Teal.


  • Up to 5 free withdrawals in the Eurozone

  • Flight and luggage delay cover

  • Medical emergency cover

  • Winter activities insurance

  • Pandemic coverage

N26 Metal

The premium account with a metal card

N26 Metal - Slate Grey.
N26 Metal - Charcoal Black.
Quartz Rose - N26 Metal Card.


  • An 18-gram metal card

  • Up to 8 free withdrawals in the Eurozone

  • Purchase protection

  • Phone insurance

  • Dedicated N26 Metal line

  • What is a foreign transaction?
  • What is a foreign transaction fee?
  • Do all card companies charge foreign transaction fees?
  • Does N26 have any hidden foreign transaction fees?
  • Does N26 charge foreign transaction fees to withdraw cash from ATMs?