Sweden's Riksbank staff memo finds large Swedish banks’ cross-border payment fees above G20 1% and 3% cost targets

Sweden's Riksbank published a staff memo assessing whether cross-border card payments, credit transfers and remittances offered by the large Swedish banks meet the G20 cost targets, concluding that they currently do not. The analysis attributes the gap largely to foreign exchange-related charges on card payments and high transaction-specific fixed fees on credit transfers, and points to greater competition and clearer ex-ante disclosure of total fees as potential levers to reduce end-user costs. The memo is an analytical staff publication and does not represent a Riksbank policy position. For card payments, average end-user costs to European Economic Area destinations are estimated at around 3.5%, driven in particular by issuer-specific foreign currency conversion fees averaging about 1.65% plus card network exchange costs and merchant discount fees. Costs are estimated at around 4% for card payments to the United Kingdom and around 4.5% for card payments to non-European countries with liquid currencies, above the G20 destination-country cost target for retail payments. For credit transfers, variable costs for large-value transfers via the large Swedish banks average about 1.1% to EEA destinations and 1.4% across a broader set of destinations, but remittances of USD 200 (around SEK 2,200) are estimated to cost about 3.5% (slow) and 17% (fast) to EEA destinations and about 6% (slow) and 20% (fast) to non-EEA destinations, reflecting fixed fees of around SEK 50 for slow payments and SEK 350 for fast payments and an assumed additional receiving fee outside the EEA. The memo also notes examples of challenger banks and specialised non-bank payment institutions offering services closer to the G20 targets, including remittances averaging around 3% via a specialised non-bank provider in the sample.