Every year people lose serious money on international transfers without realising it — not in visible fees, but in the hidden margin that banks and money changers add on top of the real exchange rate. This guide explains how the currency-exchange business actually works, what your options are, and which one is cheapest for your situation.
The hidden cost nobody tells you about
When your bank says "no exchange fee", it does not mean the conversion is free. What it does is apply its own exchange rate, which is worse than the real mid-market rate. The gap between the real rate and the one you get is called the spread (or exchange margin), and it can be anywhere from 2% to 5% of the amount.
On a £5,000 transfer to US dollars, a 3% spread means £150 lost in the conversion — even though your statement shows no fee at all.
Real comparison: bank vs Wise vs Revolut (2026)
For a transfer of £1,000 to US dollars at a mid-market GBP/USD rate of 1.27:
| Method | USD received | Fixed fee | Rate margin | Real cost |
|---|---|---|---|---|
| High-street bank (SWIFT) | ~1,232 USD | ~£20 | ~3% | ~£58 |
| Wise | ~1,262 USD | ~£5 | ~0.5% | ~£11 |
| Revolut (free plan) | ~1,268 USD | £0* | ~0%* | ~£0–8* |
| Western Union / MoneyGram | ~1,245 USD | ~£4 | ~2% | ~£25 |
| Standard debit/credit card | — | £0 | ~2.5% | ~£25 per use |
* Revolut's free plan has a monthly fee-free exchange limit (~£1,000). Beyond the limit or at weekends it adds a ~1% markup. Figures are indicative and vary by rate and provider.
Wise: the most transparent option for international transfers
Wise (formerly TransferWise) uses the real mid-market rate and charges an explicit fixed fee that you see before you confirm. Its strengths are full transparency and speed (many transfers arrive in minutes or a few hours). The cost varies by currency pair: GBP→USD is around 0.4%–0.5%, GBP→EUR roughly 0.4%, and exotic pairs can reach 1%–2%.
Revolut: best if you already have an account
Revolut gives you the real mid-market rate within the free plan's monthly limit (~£1,000). Beyond that limit, or at weekends when markets are closed, it adds a ~1% markup. If you already use Revolut day to day, it is the most convenient choice for small and medium amounts. For large transfers or once you are over the limit, Wise is often cheaper.
When to use a card and when to use a transfer
- No-FX-fee card (Revolut, Wise, Monzo, N26): ideal for paying abroad, online purchases in another currency, or ATM withdrawals. Always decline the "pay in your home currency" (DCC) option an ATM or terminal offers — it applies a very poor rate.
- Transfer: best for sending money to another person, paying large invoices in another currency, or moving funds between your own accounts in different countries.
- Traditional bank: only when unavoidable (the recipient only accepts SWIFT, regulatory limits require it, or the amount is very large and you prefer the bank's process).
How to work out the real cost of your transfer
Before you send, check the real cost in three steps:
- Look up the real mid-market rate right now with our currency converter (it uses ECB reference rates).
- Work out how much the recipient would get at that ideal rate.
- Compare it with what each provider offers — the gap in currency received plus the fixed fees is your real cost.
Check the real exchange rate between 30+ currencies before you send your transfer.
See live rate →Tips to minimise losses on the exchange
- Never change money at the airport — the margins are the worst on the market, sometimes 8%–10%.
- Avoid DCC (Dynamic Currency Conversion): when a terminal or ATM asks whether you want to pay in your home currency, always say no.
- Batch your transfers: if you send money regularly, one larger transfer usually beats several small ones, because fixed fees weigh more on small amounts.
- Pick your moment: rates move. If there is no rush, wait for a favourable rate — our converter shows the recent trend.
- Always compare before confirming. What looks "fee-free" almost always hides a margin in the rate.
Frequently asked questions
What is the cheapest way to send money abroad?
Specialist providers like Wise or Revolut are usually cheapest: they use the real mid-market rate and charge 0.4%–1.5%, versus the 3%–5% margin of high-street banks. On £1,000 the difference can be £30–£50.
What is the mid-market exchange rate?
The rate banks use to trade currency with each other — the fairest on the market. Banks add a margin on top (the spread) as their profit. Check it in our currency converter.
Is Wise or Revolut better for sending money?
Wise is best for one-off larger transfers with full transparency. Revolut is more convenient if you already have an account and stay within the free monthly limit. For large amounts, compare both before sending.
How much does a bank charge for an international transfer?
Between £10 and £35 in fixed fees plus a 2%–5% margin on the rate. On £1,000 the total can be £35–£90 versus £5–£15 with Wise.
Is it safe to use Wise or Revolut?
Yes. Both are regulated in the UK and EU and keep customer funds segregated (safeguarded) from their operating money. They are built for moving money rather than long-term saving, so they are not covered by deposit-guarantee schemes.
When is a card better than a transfer?
A no-FX-fee card (Revolut, Wise) is better for spending abroad or online. A transfer is better for sending money to someone or paying large invoices. Always avoid "pay in your home currency" (DCC) at ATMs and terminals.