Ideas in this flowchart

• A purchase made abroad can involve financial intermediaries and additional transaction costs.
• Foreign-exchange banks and brokers may participate in the purchase.
• Currency settlement and clearinghouse operators may process the transaction.
• Messaging services such as SWIFT may support the transaction.
• The customer may incur multiple types of foreign-transaction costs.
• Explicit foreign-transaction fees may be charged to the customer.
• Hidden costs may result from the exchange-rate spread.
• The spread is the difference between the price charged and the exchange rate obtained by the bank.
• These costs can reach as much as 8 percent of the transaction.
• The costs add to the fees imposed on the foreign merchant.