When you deal with money transactions from all around the world, then it is important for you to know about exchange rates. Oftentimes, you may find that your bank’s exchange rate differs from the one that is shown on your online payment service as well as through a money transfer service. But how do you find out which one is the real exchange rate?
The same exchange rate?
You will never get the same exchange rate amount with your bank, ForEx, money transfer service, and an online payment provider. This is because each of them takes a percentage for converting your funds for you. There will always be markup to the global exchange rate that you get through your exchange rate search online. The important thing to know is if you are being charged fairly for the service you are getting.
Finding the real exchange rate
The first thing to do for you to get the right exchange rate is to search for it through the global market. These rates fluctuate and change every day so even just having a good estimate on how much the rate really is will help you a lot in finding out if you are getting overcharged through your payment solution or not.
Getting the exchange rate offered
Once you get the base amount for your currency’s exchange rate, you should then get the exchange rate that your payment solution is offering you. Take note that these rates are different from every payment provider so if you are planning on using a money transfer service, then their exchange rate information is the one that you have to get.
Get the markup percentage
Now that you have both the real exchange rate for your currency as well as the one offered by the payment solution, you can start to find out how much the conversion will cost you. The first step to this is to find out the difference in the rates by subtracting the amount of the global exchange rate from the offered exchange rate given to you. Then divide that amount by the real exchange rate and multiply by 100. The product will be the percentage of markup the payment service is charging you.
Calculate the markups
You can use this method to calculate the markup amounts of the online payment solutions that you have available. This way, you can compare percentages and be able to make an informed decision on which service to use that can save you more money in the long run.
Get a USD or Euro prepaid card
When you want to find out the real exchange rate for your money transfer, there should be an option to compute it. If that isn’t possible, you’ll only find out after the transaction has been made and you see it in your statement. You’ll also have to factor in the transaction fees as that adds to the total amount debited from your account. If you want to avoid losing money because of low exchange rates, you have the option to get a Euro or USD prepaid card. Your card can be funded and you can also send payments using it, so you won’t need to use a local currency to USD or Euro exchange.