MONEY GUIDE

Exchange Rate Spreads: What You Actually Pay

An exchange-rate spread is the difference between a reference rate and the customer rate a provider offers. A provider can advertise a small or zero transfer fee while still earning revenue through this difference.

What to compare

When comparing services, calculate how much destination currency arrives for the same source-currency amount. That single comparison captures much of the combined effect of rate margin and visible fees.

Before you transact

Also consider payment fees, receiving fees, delivery time and refund terms. A reference-rate converter is best used as a benchmark rather than as a promise of the price available to you.