If you have ever compared the exchange rate on your remittance app to the rate you see on Google or Reuters, you have probably noticed a gap. That gap is where a lot of hidden remittance cost actually lives.
What is the mid-market rate?
The mid-market rate is the midpoint between the buy and sell price of a currency on the global wholesale market - the rate banks and large institutions trade at amongst themselves. It is the closest thing to a "true" exchange rate at any given moment.
Why your rate is usually worse
Most providers add a margin on top of the mid-market rate instead of charging a clear fee, because a marked-up exchange rate is easy to hide and hard for customers to notice. A transfer advertised as "fee-free" can still cost more overall than one with a small explicit fee, if the exchange rate margin is wide enough.
What to ask before you send
Compare the rate you are offered to the live mid-market rate for that currency pair. The closer the two numbers, the more of your money actually reaches your recipient.