If you've ever sent money internationally — a remittance, a freelance invoice, a tuition payment — you've probably noticed that the amount that arrives is smaller than the currency converter told you to expect. The difference isn't a mistake: it's the gap between the mid-market rate (what Google, Bloomberg and most online converters show) and the retail rate (what your bank or transfer service actually gives you).
What the mid-market rate is
The mid-market rate is the midpoint between the rates at which big financial institutions buy and sell a currency on the interbank market. It's effectively the "no-spread" price — the closest thing to a "true" exchange rate that exists for a given moment.
Almost every online converter (including the Tulnest Currency Converter) shows the mid-market rate. Reuters, Bloomberg and Google all do the same. It's the rate banks use to trade with each other — but it's not the rate they give to retail customers.
How retail providers make money on currency
A bank or money-transfer service can charge you in two ways, and usually uses both:
- An explicit fee — a clear line item like "transfer fee: $5."
- An exchange-rate markup — a spread added to the mid-market rate in the provider's favour. Often invisible unless you compare.
Markups typically range from 0.5% (very good) to 4% (very expensive) per transaction. Banks sending international wires are often at the high end; dedicated transfer services like Wise compete by being at the low end. The markup is often larger than the explicit fee, which is why "no-fee" advertised services aren't always the cheapest overall.
A worked example
Suppose the mid-market USD → RWF rate is 1,450. You want to send 1,000 USD.
- At the mid-market rate: 1,000 × 1,450 = 1,450,000 RWF.
- Bank offering a 3% markup and a $25 fee: the effective rate is ~1,406.5 (1,450 × 0.97). You pay $1,025. You send $1,000 at 1,406.5 = 1,406,500 RWF. Total cost of the transfer: 43,500 RWF ($30) in rate markup + $25 fee ≈ $55 on $1,000.
- Transfer service with a 0.5% markup and a $3 fee: effective rate ~1,442.8. You pay $1,003. You send $1,000 at 1,442.8 = 1,442,800 RWF. Total cost: ~$8 on $1,000.
The "$25 fee" bank turned out to be ~7× more expensive than the "0.5% markup" service, even though the latter also had a fee. The explicit fee was a small part of the total cost.
How to compare providers fairly
The honest comparison in four steps:
- Look up the current mid-market rate — use any reputable converter (e.g. our USD to RWF page).
- Ask each provider: "If I send X units of source currency, how many units of target currency will the recipient get, after all fees?"
- Compute the effective rate = target received / source sent.
- Compare each provider's effective rate against the mid-market rate. The closer, the cheaper.
A note on mobile money
Domestic transfers (within Rwanda, say) don't cross a currency, so there's no mid-market question — but there are flat transfer fees instead. For those, see our walkthrough of MTN MoMo fees.
The takeaway
When you see "USD to RWF = 1,450" online, that's the mid-market rate — an informational benchmark, not the rate you'll get at a bank. Always ask your actual provider for the final number the recipient will receive, not just for "the fee" — and compare that against the mid-market benchmark to see the real cost of the transfer.