The real cost of sending money abroad is not the fee you can see. It is the fee plus the exchange-rate markup, the gap between the mid-market rate and the rate the provider actually gives you. The easiest way to find it is to compare how much the recipient gets against how much they would get at the mid-market rate. The shortfall is the real cost. Roll the fee and the markup into one percentage and you get the all-in cost, the single number that lets you compare any two providers fairly.
- The fee is only half the cost. The exchange-rate markup hidden in the rate often costs more than the visible fee, and "no fee" never means cheap.
- The shortfall is the real cost. Send $1,000 and compare what the recipient gets against the mid-market figure. The gap is what the transfer truly cost.
- One percentage beats two numbers. The all-in cost (fee plus markup, as one %) is the only figure you need to rank providers like for like.
- Banks hide the most. A bank can keep 3% or more inside the rate plus a wire fee, so the recipient gets far less than the mid-market rate would give.
The cost you see, and the cost you don't
Every transfer costs you some mix of two things. The first is the fee, the charge shown on the checkout screen. The second is the markup, a worse rate than the real one that the provider keeps. Most people only ever look at the fee, which is exactly where the mistake happens.
The benchmark underneath both is the mid-market rate. Right now $1 buys 0.863148 euros at that rate. A provider that hands you the mid-market rate and charges a small, visible fee is cheap. A provider that quotes "zero fees" but gives you a worse rate is charging you through the markup, and you will never see it as a number on the screen.
A worked example: $1,000 to euros
Take a $1,000 transfer from US dollars to euros. At the mid-market rate, $1,000 is about €860, and that is the figure to beat.
A cheap provider like Wise gets the recipient about €856. The shortfall against the mid-market rate is about $3.44, roughly 0.34% of the transfer. That small gap is the real cost, and it is almost all visible fee with very little markup.
A bank gets the recipient much less, about €803 on the same transfer. The shortfall against the mid-market rate is about $63.95, even though the bank may have advertised "no fee." The markup inside the rate did the damage. Same $1,000, same route, and the recipient keeps over €50 more with the cheap provider.
The real cost, split into fee and markup
The shortfall tells you the total. A waterfall shows you where it went, splitting the cost into the visible fee and the hidden rate markup.
The picture makes the bank's case in one glance: a thin slice of visible fee and a thick block of rate markup. On a bank transfer the markup is usually the larger piece by far, which is why a "no fee" label tells you almost nothing about the real cost. A specialist keeps the markup near zero and charges you in the open instead.
The all-in cost is the one number to compare
You do not need to separate the fee from the markup to pick a winner. You only need the two added together as one percentage, the all-in cost. This site ranks providers by that figure using the current mid-market reference. Wise may use an account-holder API estimate; other providers use stored published fee and markup models rather than live quotes.
On $1,000 from US dollars to euros, Wise runs about 0.34% all-in. A typical bank sits far higher, about 6.40%, because the markup dwarfs its fee. The gap between those two percentages is the whole argument for comparing before you send. For more ways to shrink that number, see our guide to cutting FX fees.
How to work out the real cost yourself
You can do this with any quote in under a minute.
Step one: get the mid-market rate. Search the currency pair, or use the rate at the top of this page. Multiply your send amount by it. That is what the recipient should get if the transfer were free.
Step two: get the real quote. Enter the same amount with the provider and note what the recipient actually gets.
Step three: find the shortfall. Subtract the real amount from the mid-market amount. That gap is the real cost, in the recipient's currency. Divide it by the mid-market amount and you have the all-in percentage.
Step four: compare, don't assume. Run your exact amount and currency pair through the comparison tool. Check Interactive Brokers when a large conversion will fund an investment, trade or currency hedge inside the account; its spot-currency commission can be far below a percentage transfer fee. Use a dedicated transfer service when paying somebody else, because the lowest conversion cost is not automatically the lowest delivered cost.
Frequently asked questions
What is the difference between a fee and a markup?
A fee is a charge you can see on the screen, either a flat amount or a percentage of the transfer. A markup is a worse exchange rate the provider keeps instead, so it never appears as a line item. Two transfers can have the same fee but very different markups, which is why the fee alone never tells you the real cost.
Why does the mid-market rate matter?
It is the rate banks trade at with each other and the one a currency converter shows, so it is the fairest baseline there is. Any provider that gives you a rate below it is keeping the difference as a hidden markup. Measuring every quote against the mid-market rate is the quickest way to expose that cost.
Is a "no fee" transfer actually free?
No. A provider that waives the fee usually makes its money on the markup, giving you a worse rate than the mid-market one. The real cost is the fee plus the markup together, so a transfer advertised as free can still cost several percent once the rate is taken into account. Always check what the recipient gets against the mid-market figure.
Sources: Wise pricing (opens in a new tab), Interactive Brokers FX commissions (opens in a new tab), IBUK and IBLLC Client Agreement (opens in a new tab), Interactive Brokers third-party withdrawals (opens in a new tab). Accessed 22 August 2026.