What’s meant by the ‘best exchange rate’?
The best exchange rate is the one closest to the mid-market rate – the midpoint between demand and supply for a currency.
It changes all the time and is considered the fairest exchange rate possible. To find it out, check independent sources like Google, XE and Yahoo Finance.
When you go to send money abroad, you won’t see this rate. That’s because providers take the mid-market rate and apply an extra charge on top. Think of this as a service fee for getting your money where it needs to be.
How to compare exchange rates
What do you do when everyone says their exchange rate is the best? Approach with caution.
To get the best exchange rates, you need the bigger picture. The most competitive rates can be accompanied by high transaction fees or hidden fees. When you take these fees into account, what at first looks like a great deal might not be worthwhile.
Here are a few things you can do to ensure you get the best deal available…
Search for transparency
Be wary of headlines stating ‘zero fees’ – usually when something sounds too good to be true, it is!
Dive deeper and you often find the ‘send’ fee is zero but the FX fee (the cost of exchanging your currency) is high. There might also be an administration fee that adds to the cost.
Many providers have send money calculators to help you out. These calculators clear up any uncertainty around how much money your recipient will receive by showing you the amount that will arrive in their account.
The international money transfer market is a crowded field, with new players emerging all the time.
Do your research: compare what’s on offer and then check the fees. Currency exchange comparison sites are a good start, but also look out for limited time deals companies are running.
Understand the costs
You pay two costs to send money abroad: a transaction fee and a commission charge. Some providers state these clearly; most do not.
Just because a transfer service offers '0% commission', you're not guaranteed value for money. Often, companies offering 0% commission make their money by offering poor exchange rates in the first place.
Companies like Skrill specialise in international money transfers and offer better rates than most banks. What’s more, money transfer specialists are set up to make your transfer as quick and simple as possible.
Don’t leave things until the day you send money. Instead, find out where you're likely to find the best rates in advance.
Thinking ahead will give you time to work out who combines the best exchanges rates with reasonable fees. Then when you go to send, you’ll have a shortlist of websites to compare.
Sending money with Skrill
With Skrill, you can send money to 185 countries in 40 different currencies. Send direct to a bank account, a mobile wallet or an email address – the choice is yours.
When you send with Skrill, you'll see exactly how much money your recipient will receive. That way, you know you're getting competitive rates from a trusted provider.