Local Entity vs. Cross-Border Fees: The Comparison Worksheet

Part 3 of a 3-part series on evaluating local entity setup against ongoing cross-border fees

LOCAL ENTITY OR CROSS-BORDER FEES SERIES · PART 3/3

Local Entity vs. Cross-Border Fees: The Comparison Worksheet

Part 1 covered when to consider a local entity. Part 2 covered what setting one up actually takes. This is the worksheet — what to actually line up side by side before you make the call.

And it's not just cost. Acceptance rates, settlement speed, and chargeback exposure all move too.

Cross-border side: what to gather

• All-in cost per transaction, from your PSP's actual fee breakdown, not the sticker rate

• Total volume through that market

• Hidden costs: FX spread, correspondent bank fees

• Current acceptance/approval rates

• Settlement speed

Local entity side: what to gather

• Entity overhead, across the five categories from Part 2

• Local PSP/processing requirements and fees

• Expected acceptance rate impact from local processing

• Settlement speed change

• Local scheme and chargeback exposure differences

Beyond the numbers

Even once the comparison is done, some things don't show up as a line item — how much control you want over the local relationship, how much complexity your team can actually absorb, and whether an MoR's liability transfer is worth paying for regardless of what the math says.

The Takeaway

Line all of this up, and the decision usually makes itself. Most companies simply never do.