How to Read an Exchange-Rate Markup

When you send money abroad, providers typically make money in two ways: a flat upfront fee and a margin built into the exchange rate. The exchange-rate margin is often invisible because the provider simply quotes you a rate that is less favorable than the mid-market rate — the midpoint between global buy and sell prices for a currency pair, freely available on financial data sites.

To spot the margin yourself, compare the rate your provider is offering against the current mid-market rate. Subtract the provider's rate from the mid-market rate, divide that difference by the mid-market rate, and multiply by one hundred. The result is the FX margin expressed as a percentage. For example, if the mid-market rate is higher than your provider's rate by a meaningful amount, that gap represents a hidden cost on top of any fee you can already see on the receipt.

To find the true total cost of a transfer, add the upfront fee to the cost implied by the FX margin. This combined figure — fee plus FX margin — is the same total-cost methodology used by the World Bank Remittance Prices Worldwide quarterly survey, currently in its 2024 Q3 edition. That survey monitors transfer costs across many sending corridors worldwide, and the figures it reports change every quarter, so any specific numbers you see on this site reflect a particular point in time.

When comparing options, consider looking at total cost rather than the fee alone, since a zero-fee service can still carry a significant margin in the exchange rate. The World Bank survey uses the term "cheapest surveyed" rather than "best" to describe the lowest-cost options it finds, and that distinction is worth keeping in mind: cost is one factor among several you may want to weigh.

See surveyed costs for all 42 corridors →

Source: The World Bank, Remittance Prices Worldwide, available at http://remittanceprices.worldbank.org (CC BY 4.0). Figures are from the 2024 Q3 survey — surveyed prices, not live quotes.