When sending money internationally, many people focus on the visible transfer fee. But in many cases, the biggest cost is hidden in the exchange rate itself. This hidden cost is called the exchange rate margin.
The exchange rate margin is the difference between the real (mid-market) exchange rate and the rate offered by a bank or transfer service. Instead of charging a large fee upfront, some providers earn money by offering a worse exchange rate.
Even a small margin can become expensive on larger transfers. For example, a 1% margin on a $1,000 transfer is effectively a $10 cost — often higher than the “fee” shown on the screen.
The simplest way to estimate the true cost is to compare two outcomes:
The difference between what you pay and what the recipient receives (converted at the real exchange rate) represents the true total cost — and the exchange rate margin is often a major part of it.
When comparing banks and fintech services, do not compare fees alone. Compare the final received amount for the same send amount (or the required send amount for the same receive amount). This approach makes hidden exchange rate costs visible.
Costoria is built around this “true cost” perspective. A fee comparison and calculation tool (MVP) is currently under development to help users estimate and compare real transfer costs.
This site is currently under construction.