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34 Examples of Friction Costs

 , updated on July 16, 2023
Friction costs are expenditures incurred in a financial transaction beyond the value being exchanged. This includes any fee, tax or hidden cost that is mandatory but doesn't add value to your purchase or sale. The following are common examples of friction costs.
Annual fees
Application fees
Appraisal fees
ATM fees
Bank account monthly fees
Bid-ask spreads
Brokerage fees
Cancellation fees
Change fees
Commissions
Credit card transaction fees
Currency exchange fees
Customs duties
Departure taxes
Escrow fees
Exchange fees
Financial transaction tax
Goods and services taxes
Hiring costs
Insurance premiums
Interest expenses
Late payment fees
Legal fees
Notary fees
Overdraft fees
Permits and regulatory fees
Processing fees
Real estate agent commissions
Sales tax
Stamp duty
Trading fees
Transfer fees
Value-added tax
Wire transfer fees
Overview: Friction Cost
Type
Definition
Costs incurred in a financial transaction beyond the value exchanged such as fees and taxes.
More Examples
Exchange rate spreads, defined as the difference between the buy and sell price for a currency.
Commission fees on stock trades.
Closing costs for a real estate transaction.
Related Concepts

Business Costs

This is the complete list of articles we have written about business costs.
Abatement
Applied Cost
Business Equipment
Capacity Cost
Capex
Capital Improvement
Carrying Costs
Closing Costs
COGS
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Expenses
CAC
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Opex
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Shrinkage
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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