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Spread: the price nobody charges you and everybody applies
It is the gap between the price a currency is bought at and the price it is sold at. That is where the margin on a conversion travels, without appearing as a fee.
Two services advertise the same rate. One charges a fee and the other says it charges none. You run the same amount through both and different sums arrive. The difference sat somewhere neither of them wrote down.
What it actually is
The spread is the gap between the price a currency is bought at and the price it is sold at. Whoever converts buys at one price and sells at another, and that distance is their margin.
Why it doesn't show as a fee
| Way of charging | Where you see it | How to compare it |
|---|---|---|
| Explicit fee | As a line in the detail | Easy, it is written down |
| Spread | Inside the rate applied | Only by comparing the final amount |
Both are legitimate ways to charge for a service. The practical difference is that one can be read and the other has to be worked out.
Spreads stack
If the money crosses two or three currency changes along the way, each leg applies its own. That is why an attractive rate with several legs ahead of it can end up worse than an ordinary one with a single leg.
The comparison that does work
Note how much left and how much arrived, for the same operation on the same day. That number includes fees and spreads together. The method is in the mistakes that cost you money when sending money home.
Where you will be asked for it
You are not asked: you pay it. It shows up in any operation crossing currencies, including those that advertise no conversion at all because it happens on an intermediate leg.
Related terms
The reference it is measured against is the mid-market rate, and how conversion works inside the app is in what the BNKA swap is. The rest is in the glossary.
This is not financial, legal, tax, or investment advice.
Questions on this topic
Is a fee-free conversion free?
Not necessarily. When no fee is listed, the margin usually sits inside the rate applied, which is exactly what we call the spread. A service with no fee and a wide spread can work out costlier than one with a fee and a narrow spread.
How do I spot it if it isn't written down?
By comparing the rate applied to you with the mid-market point at the same moment, or more simply, by comparing how much lands at the end for the same operation across two services. The final amount includes the spread even when nobody names it.
Is the spread always the same?
No. It changes with the currency pair, the moment, and who does the conversion. Less common pairs tend to carry wider spreads than heavily traded ones, and that does not depend on you.
Keep reading
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