The two costs you actually pay
Providers make money in two ways. The first is the exchange rate margin: the gap between the mid-market rate you see on a currency site and the rate you are actually quoted. The second is a fixed fee or transfer charge. A bank might advertise “no transfer fee” while applying a 3% margin, which on a £200,000 transfer is £6,000.
The mid-market rate is the wholesale rate banks use with each other. No consumer provider offers it exactly, so the honest comparison is how far a quote sits from that benchmark, not whether a fee appears on the statement.
Typical margins by provider type
| Provider | Typical margin above mid-market | Separate fee |
|---|---|---|
| High street bank | 2% – 5% | Often £10 – £25 |
| Specialist currency broker | 0.5% – 1.5% | Usually none |
| Money transfer app | 0.35% – 1% | Small fixed fee |
| Bureau de change | 3% – 6% | Varies |
What that means in pounds
The table below compares a bank at a 3% margin with a specialist broker at 0.75%. It uses illustrative rates and excludes any fixed fees, so it isolates the cost of the margin alone.
| Transfer amount | Bank at 3% | Broker at 0.75% | Saving |
|---|---|---|---|
| £10,000 | £300 | £75 | £225 |
| £50,000 | £1,500 | £375 | £1,125 |
| £200,000 | £6,000 | £1,500 | £4,500 |
| £500,000 | £15,000 | £3,750 | £11,250 |
Fees beyond the exchange rate
A quote is not always what lands. International payments can pass through one or more intermediary banks, and each may deduct a handling charge before the funds reach the recipient. SWIFT transfers also attract a fixed charge, typically £15 to £50. Ask for the expected beneficiary amount in writing, not just the rate, so these deductions are visible before you commit.
How to reduce the cost of a transfer
- Compare the quoted rate with the mid-market rate at the same moment, then multiply the difference by the amount you are sending.
- Ask for the all-in beneficiary amount, including any intermediary deductions, rather than the headline rate.
- For a payment with a known future date, use a forward contract to fix the rate now and remove currency risk during the wait.
- For transfers above about £10,000, compare a specialist broker against your bank, as shown in our broker versus bank comparison.
What a specialist transfer costs at IFA Markets FX
IFA Markets FX applies a disclosed spread rather than a transfer fee, and every client is assigned a named specialist. Transfers are available in 142 currencies to more than 170 countries with no upper limit, and international money transfers can be arranged as spot payments, target orders or forward contracts of up to 12 months. If you would like a figure for your own transfer, request a free quote and we will show the source amount and expected beneficiary amount side by side.