FX margin
FX margin is the difference between the exchange rate a provider gives a customer and a reference rate, such as the interbank or mid-market rate, expressed as a percentage. In remittances it is a cost on top of the visible transfer fee.
How it works
The World Bank's Remittance Prices Worldwide splits every price into a transfer fee and an exchange rate margin, noting that the margin is not quoted in the fee. Together they make the total cost. The global average cost of sending $200 was 6.36% in Q3 2025, and for $500 it was 4.08%.
Providers describe the same gap from their side. Remitly defines foreign exchange spreads as the difference between the rate offered to customers and the rate on its own currency purchases. Western Union describes the difference between the rate it sets for the customer and a rate available in the wholesale foreign exchange market.
Some rules force the margin into the open. In the EU, Regulation (EU) 2021/1230 requires currency conversion charges on card payments to be shown as a percentage mark-up over the latest ECB euro reference rates, before the payment. In the US, Regulation E requires remittance transfer providers to disclose the exchange rate used, rounded to between two and four decimal places.
Example
Mid-market USD/MXN is 18.0000. A provider gives the customer 17.7300 and charges a $2.99 fee on $200. The FX margin is 0.27 divided by 18.0000, or 1.5%, which is $3.00. The total cost is $5.99, or 2.995% of the amount sent.
Frequently asked questions
Is a zero-fee transfer free?
No. If the rate is below the reference rate, the margin is the price. Compare the amount the recipient gets, not the fee.
Which reference rate should we measure against?
One you can observe at the time of the trade, such as a live interbank mid. The ECB publishes euro reference rates around 16:00 CET for information only and discourages using them for transactions.
Where Polynopsis fits
Polynopsis shows balances in every currency across banks, partners and exchanges, so the effect of each conversion on every corridor is visible.
Compared with
Related terms
Sources
- Remittance Prices Worldwide methodology · World Bank
- Remittance Prices Worldwide, Issue 54, September 2025 · World Bank
- Remitly Global, Inc. Form 10-K for fiscal year 2025 · U.S. Securities and Exchange Commission (EDGAR)
- The Western Union Company Form 10-K for fiscal year 2025 · U.S. Securities and Exchange Commission (EDGAR)
- Regulation (EU) 2021/1230 on cross-border payments in the Union · EUR-Lex, Publications Office of the European Union
- 12 CFR 1005.31, Disclosures (Regulation E, remittance transfers) · Electronic Code of Federal Regulations
- Euro foreign exchange reference rates · European Central Bank
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.
About Polynopsis
Polynopsis is liquidity management software for cross-border payment companies. The name joins poly, many, and synopsis, a seeing together: one live view of money spread across many banks, payout partners, exchanges and stablecoin wallets, including money in flight, with a warning before any corridor runs dry.
Why it is called Polynopsis · About Polynopsis · Glossary · Corridor runway calculator