If you are trying to work out "how much do banks charge for foreign exchange", there is no single published figure to look up. What you can measure is the difference between the reference rate you see quoted in the market and the rate you are actually offered, because that gap, combined with fees, sets the amount that lands in your recipient's account.
Start with the two rates, not one
The Reserve Bank of Australia describes an exchange rate as the relative price of one currency in terms of another, and notes it is an important economic variable. Australia has operated a floating exchange rate regime since 1983, which means the rate is not pegged; it moves continuously in response to market conditions.
That continuous movement is why comparing providers is difficult. A rate quoted at 9am is not the rate quoted at 4pm, so any "cheap versus expensive" judgement made hours apart can be misleading. Reference rates published by rate websites, search engines or news services are typically mid-market measures — the middle of the buying and selling prices in the wholesale market. Retail customers are rarely offered that exact rate. The provider applies its own rate, and the difference between the two is the margin.
The important practical point: this margin is the cost, and it is usually built into the price rather than listed as a separate line item like a transfer fee. So asking "what's the fee?" will often get you one number, while the actual cost of the transaction is higher.
Compare the recipient amount, not the rate
The Australian Competition and Consumer Commission's guidance on foreign currency and money exchange is explicit on this point: look at the total price and the amount the recipient will receive.
That instruction exists because the rate and the fee interact. One provider may advertise a lower upfront fee and recover more through the exchange rate. Another may charge a visible fee and apply a rate closer to the reference rate. Comparing the headline fee alone rewards the wrong provider; comparing the advertised rate alone ignores fees entirely. The payout figure is the only number where both effects are already combined.
| Factor | How it changes the payout | What to ask |
|---|---|---|
| Rate margin | Reduces the payout proportionally to the amount sent | What is the exact rate for this transaction, right now? |
| Upfront or transfer fee | A fixed deduction, so it hurts small transfers most | Is the fee flat or a percentage? Is it deducted from the send amount or added to it? |
| Timing | Rates move during the delay between quoting and settling | How long until the funds are paid, and is the rate locked? |
| Intermediary deductions | The recipient's bank or an intermediary may deduct charges | Is the quoted payout guaranteed, or an estimate? |
| Weekend or public holiday pricing | Some suppliers price differently when markets are shut | Does the quote change if I send on a Friday night? |
Timing and weekend pricing matter more than people expect
Currency markets close for the weekend. According to the ACCC, some suppliers charge an extra fee or may apply a worse exchange rate over the weekend to mitigate any possible movement in the market.
If you routinely send money on a Friday evening or Saturday, this is worth testing rather than assuming. Get a quote on a Tuesday afternoon and an equivalent quote on a Saturday for the same amount and destination, and compare the payout figures. If the weekend figure is consistently lower for the same provider, sending during business hours may be the cheapest change you can make without switching providers.
For transfers that are not urgent, also ask how long settlement takes. A slower service is not inherently worse, but it introduces a period where the rate can move. If the provider guarantees the payout amount, that risk sits with them. If the payout is only estimated, it sits with you.
Work the margin out yourself
You do not need to accept a provider's summary to understand what you are paying. Record four numbers at the same moment:
- The reference (mid-market) rate from an independent rate source.
- The rate the provider quotes for your specific transaction.
- Any upfront fee, and whether it is deducted from what you send.
- The payout figure in the destination currency, and whether it is guaranteed.
The margin in percentage terms is approximately: (reference rate − offered rate) ÷ reference rate × 100. Multiply that by the amount you are converting to get the cost attributable to the rate, then add the fee. Compare that total against a second provider using the same method and the same moment in time.
One caution on interpretation: the resulting percentage is specific to that provider, that currency pair, that amount and that minute. It is not a stable property of the provider. Many providers price differently by corridor, by transfer size and by payment method, so treating one calculation as a permanent verdict can lead you to overpay later.
What to ask before you commit
Ask these before authorising the transfer, and keep the answers:
- Is the recipient amount guaranteed or estimated? If it is estimated, ask what could reduce it.
- Will any amount be deducted after the money leaves the provider? Intermediary and recipient-bank charges are outside the sender's control but should be disclosed.
- Is the payout amount higher if I send more? Margins sometimes scale down at higher transfer amounts, so a larger, less frequent transfer may cost less overall. Test it rather than assume it.
- What happens if the rate moves before settlement? Understand whether the quoted rate holds.
- Am I being charged in the currency I expect? The ACCC notes it may be misleading if an overseas business indicates a consumer will be charged in Australian dollars but then charges in a foreign currency. At a card terminal or overseas checkout, check which currency the transaction is being processed in before you approve it.
If you run a business and take payments from overseas customers, the ACCC's guidance is that you should alert customers before they enter into a transaction if they are likely to be charged international transaction fees. That disclosure obligation sits alongside whatever your payment provider charges you.
Next steps
- Pick one recent overseas transfer and look it up. Write down the amount you sent, the rate applied, the fee and the amount received.
- Get quotes from at least two other providers for the same corridor and amount, minutes apart, and record only the payout figures.
- Check whether your regular sending day falls on a weekend or public holiday, and compare a weekday quote against a weekend one.
- Re-run the comparison whenever the amount, destination currency or payment method changes, since pricing often differs across those variables.
- If the recipient's account is in a currency other than the one you are sending, ask both institutions whether a conversion happens on arrival, because that is a second conversion with its own rate and possibly its own margin.
Keeping the comparison centred on the amount received keeps the task simple. You are not trying to beat the market or judge whether a rate is "fair" in the abstract — you are trying to identify which option delivers more to the person you are sending it to, after every deduction.
Australian Cash provides general information only. This article is not financial, legal or tax advice, and it is not a recommendation of any product or provider. Exchange rates, margins and fees change frequently and vary by provider, currency, amount, payment method and timing, so confirm all figures directly with the provider and the recipient's institution before you send money. Nothing here should be read as a promise of a particular payout, saving or outcome.
If you want to see how different options stack up for your own transfer amount and destination, the matching tool at /match/ is a reasonable place to start — enter the details and compare the payout figures rather than the advertised rates.