How exchange rate markups work
The mid-market rate is the midpoint between what banks pay and charge each other for a currency. Most consumer services give you a worse rate than that and keep the difference. Unlike a stated fee, this markup rarely appears on your receipt, so it is easy to miss.
Example
You change $1,000 into euros. The mid-market rate is 0.92, but the airport kiosk offers 0.85 and charges a $5 fee. After the fee, $995 is converted at 0.85, so you get about €846 instead of €920. The weaker rate and the fee together cost you about $81, or 8.1% of your money.
Typical costs
| Method | Typical total cost |
|---|---|
| Card with no foreign transaction fee | 0% to 0.5% |
| Card with a foreign transaction fee | About 3% |
| Specialist money transfer app | 0.4% to 2% |
| Bank wire transfer | 2% to 5% plus a flat fee |
| Airport or hotel currency exchange | 5% to 15% |
Say no to dynamic currency conversion
When a card terminal or ATM abroad offers to charge you in your home currency, decline and pay in the local currency. That offer, called dynamic currency conversion, usually carries a markup of 3% to 7% on top of any card fee.
Frequently asked questions
What is a good exchange rate markup?
Where do I find the rate I was offered?
Why does my receipt say no fee?
Last reviewed: 2026-10-10