Fri Jun 18 2021

How do I calculate my currency charges?

Understanding ‘Spreads’

It’s easy to assume that your currency charges are very little when you see terms like ‘no fees’ or ‘no commissions,’ but the simple truth is that when using a broker or bank the money is made from the difference between your exchange rate and the mid-market exchange rate.

The mid-market exchange rate is the midpoint between the buy and sell prices of any two currencies at any time but is most easily defined as the ‘real exchange rate’ or the true value of any currency pair. It cannot be beaten, but it is important to know where it is. You can check the mid-market rate on, Oanda or on the Integritas platform.

How do I work out my ‘Spread?’

Brokers will likely offer you terms of 0.3% - 2% below the mid-market exchange rate. Put simply, you’ll be paying £300 - £2,000 for every £100,000 exchanged. But, over 70% of the businesses we’ve spoken to have admitted frustration at their rates getting worse over time (i.e. being promised 0.3% only to find that months later the difference between the mid-market rate and their rate is wider).

Calculating your spread(s) and understanding your currency charges could not be easier with our free online calculator tool. By inputting your invoice details, you’ll instantly see what your broker charged, what your spread was, what the real exchange rate was at the time and what your annual FX costs are likely to be.

Remaining close to the Mid-Market Rate

Foreign payments aren’t your priority in business, and they shouldn’t have to be. So, how do you keep track of the mid-market rate and ensure your rate remains close to it?

Firstly, you’ll want to use an online alternative to over-the-phone brokers with transparent features (i.e. the option to see the live mid-market rate). This removes the risk of your pricing getting worse over time because you always know the true value of your currency pairs.

Secondly, You’ll need an efficient way to keep track of the ‘real exchange rate.’ The best way to do this without constantly watching graphs is to opt into some form of an alert system so you get notified, via email preferably, when the mid-market rate moves. This way, if a broker calls you offering 1.35 when the ‘real’ exchange rate is 1.37, you know you’re getting a bad deal.

Luckily, there’s a way to get everything from one provider. Integritas not only fixes the ‘spread’ at 0.15% whilst removing payment fees, it also gives users full visibility of the live mid-market exchange rate every single time they purchase currency.

We understand that business owners are extremely busy, which is why our automated email alert system keeps you up to date with market movements, meaning you can secure the best exchange rates without having to speak to multiple brokers over the phone.