Currency exchange feels like it should be simple: you hand over pounds and receive euros (or dollars, or yen). In practice, the cost you pay is spread across several layers, and providers are not always transparent about where their profit sits. Understanding these layers is the single most useful thing you can do to get a better deal on your travel money.
The Exchange Rate Margin
Every currency has a mid-market rate — the real-time rate at which banks trade with each other. You will never get this rate as a retail customer, and that is normal. The provider adds a margin (sometimes called a spread) on top. This margin is their primary revenue source. It might be 1% at a competitive specialist, 3-4% at a high street bank, or 8-12% at an airport bureau. The problem is that most providers do not disclose the margin explicitly. They simply show you their rate and let you assume it is close to the real one. You can check the mid-market rate on Google or XE, then compare it to what you are being offered to calculate the real margin. Check our live rates to see a transparent comparison.
Commission and Fixed Fees
Some providers charge a flat commission on top of the exchange rate — typically £0 to £5 per transaction. Others advertise “0% commission” but compensate by widening the rate margin. Neither approach is inherently better or worse; what matters is the total amount of foreign currency you walk away with for a given amount of pounds. Always ask: for £500, how many euros do I actually receive? That final number is the only comparison that matters. At Covent Garden FX, we charge 0% commission — the rate you see is the rate you get, with no additional charges on collection orders.
Delivery and Card Surcharges
If you are ordering online for home delivery, factor in shipping costs. Some providers offer free delivery above a minimum order (ours is free over £1,000 via Royal Mail Special Delivery), while others charge £3-7 regardless. Card payment surcharges are rarer now thanks to UK regulations, but some providers still add a small percentage for credit card orders. Bank transfer or debit card payments typically avoid this. When you order from us, the checkout shows you the total cost including delivery before you confirm.
How to Compare Providers Fairly
The fairest comparison is the simplest: for the same amount of pounds, which provider gives you the most foreign currency after all fees? Ignore headline rates, ignore marketing claims about “competitive rates.” Take a specific amount — say £1,000 — and ask each provider how much currency you will receive in hand after commission, delivery, and any other charges. That number tells you everything you need to know.