You open your banking app. EUR/USD is shown as 1.0850. But when you actually convert 1,000 euros, you get 1.0780. That's not a mistake — it's the spread. The gap between the interbank rate (what banks trade among themselves) and the retail rate (what you get) is where financial institutions make their quiet profits.
Where does the spread come from?
Every currency conversion involves two prices: the bid (what the market will buy from you) and the ask (what the market will sell to you). The difference is the spread. For major pairs like EUR/USD, the interbank spread can be as low as 0.0001 (0.01%). For a retail customer, your bank adds a markup — often 1% to 3% — sometimes hidden as "no commission."
| Provider Type | Typical Spread (EUR/USD) | Hidden Fees? |
|---|---|---|
| Interbank Market | 0.01% | No |
| Online Challenger Bank | 0.3% — 0.7% | Rare |
| Traditional Bank (wire) | 1.5% — 3% | Often + flat fee |
| Airport Kiosk | 6% — 12% | Yes |
Why real-time tools like Tixya matter
When you see a rate on our currency converter, you're seeing the mid-market rate — the average of bid and ask, with no markup. That's your reference point. Every time you pay more than that, you're paying for convenience, risk, or lack of transparency.
"A 2% invisible spread on a $10,000 transfer costs you $200. Over a lifetime of travel and remittances, that adds up to thousands."
How to minimize the spread damage
First, avoid airport kiosks at all costs. Second, compare using a live reference like Tixya before any transfer. Third, consider using peer-to-peer currency exchanges or specialized remittance services (Wise, Revolut, etc.) that advertise the real spread upfront. And finally, for large transfers (over $5k), always negotiate. Banks have discretion — they just don't advertise it.
The mid-market rate is your benchmark. It's the fairest price available. Anything above that is a cost. Now you know where to look.