Why the headline rate is not what you get
Currency providers advertise the exchange rate prominently and bury the fees. Even a provider with ‘zero commission’ often widens the spread — the gap between the buy and sell rate — so they earn on every transaction without listing a fee. Adding a percentage fee on top compounds the loss.
Worked example. You convert $1,000 at a headline rate of 0.92 with a 2% fee. The fee takes $20, leaving $980 to convert. At 0.92, that gives you 901.6 in the target currency — an effective rate of 0.9016, not the 0.92 on the tin.
The formula
Fee amount = amount × (fee% ÷ 100) + fixed fee. Amount received = (amount − fee amount) × exchange rate. Effective rate = amount received ÷ original amount.
Comparing providers
Use this calculator to compare two providers side by side. Plug in each provider’s rate and fee structure; the effective rate column tells you instantly which deal leaves more money in your pocket.