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Exchange rates aren’t complicated. The average person would look at the mid-market rate, but it is not what you can obtain from any provider, no matter what they make you think.

How is the exchange rate set?

How many ringgit do you need to buy a US dollar? What about a pound? What even is a Forint? (spoiler: it’s the currency of Hungary). 

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This ratio of how much one currency costs to buy another is called the exchange rate and is usually quoted in buy (how much in your currency it will cost to buy) or sell (how much in your currency you will receive if you sell) ratios.

Rate providers such as Bloomberg, Reuters, Visa, Mastercard, and banks, all set their own rates, so there’s no one answer; it depends on who you ask. Online aggregator sites like Google Finance and Yahoo usually display the mid-market rate as a guide, which is simply the mathematical median of the highest buy and lowest selling rate obtained from various sources.

The ‘real’ rate?

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The foreign exchange market is made up of millions of traders and bankers buying and selling currencies all the time. In this industry, the mid-market rate is meaningless because it is not something that can ever be obtained by either the buying or selling party.

As there are different sources of exchange rates from different providers, the rate obtained can vary temporarily, but it generally shouldn’t vary too much. MoneyMatch obtains our exchange rates (mid-rate) from xe.com, which is updated very frequently, 24 hours a day, 7 days a week.

When comparing exchange rates, one should watch out for the following:

1. Misleading Pricing

Wild offers of “mid-market” rates, only for you to be charged high variable and/or fixed fees, translating to a higher effective exchange rate. Similarly, for credit cards, it is common practice for some providers to charge you upfront with at the mid-rate, but when the transaction is settled a few days later the rate has changed and is often significantly different from the original rate. It is the same concept as budget airlines vs full-fare airlines; you think you are getting a good deal when in fact, you may be getting ripped off at the end of the day!

2. A Set ‘Day Rate’

A lot of providers only update their rates three times a day at most, as well as charging a high mark-up over the mid-market rate to compensate. You won’t be getting a good deal compared to real-time exchange rates like what we offer!

3. An Unfair Deal on your Currency

By hiding behind low or even mid-market exchange rates offered, some providers are charging you high variable fees and you are none the wiser 🙁 The worst part is…by offering the “lowest rates”, these providers will likely be at the very top of your web searches because they do not take fees into account!

Beware of hidden fees

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Money transfer operators and banks often mark up the rate to cover their true costs as well as generate profits. As businesses, they have to generate profits to pay salaries and to continue providing customers with their services. So, watch out when a service promises a “mid-rate” or too-good-to-be-true exchange rates. Oftentimes, they are hiding those costs as variable fees or commissions, on top of the transaction fee they are charging you to use their service! At MoneyMatch, we have always favored a transparent approach, with a very simple flat (not variable) fee structure, and we continuously try to provide the best rates possible based on our costs, which we keep low at scale by employing technology.

Compare before you send

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An informed customer should compare apples to apples, namely, how much in your currency (net of fees) will it cost you to send the most amount of foreign currency. You can use our calculator to see how much money your recipient will get. Compare that to the amount you’d get with your bank (selling TT), credit card, and other transfer services after including their fees. Then make your decision to go with the one which gives you the best bang for your ringgit!


What are your thoughts on how exchange rates fair, the All-in Rate? Let us know in the comments below!

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