If you have ever sent money overseas and noticed that the rate you got was different from the one shown on Google — you are not imagining it. Exchange rates can be confusing, and the difference between a good rate and a poor one can cost your family real money.
This guide explains what exchange rates are, why they vary between providers, and what to look for when you are sending money home.
What is an exchange rate?
An exchange rate is the price at which one currency can be exchanged for another. It tells you how much of one currency you get for each unit of another.
For example: if the exchange rate between the Australian dollar and the Philippine peso is 43, it means one Australian dollar buys 43 Philippine pesos. If you send AUD 500, your recipient would receive 21,500 PHP before any fees are applied.
Exchange rates change constantly — throughout the day, every day — based on supply and demand in global currency markets. The rate at 9am can be different from the rate at 3pm.
What is the mid-market rate?
The mid-market rate (also called the interbank rate or the real exchange rate) is the midpoint between the buy price and the sell price of a currency on the global market. It is the rate you see when you search a currency pair on Google, XE.com, or any financial website.
The mid-market rate is considered the fairest, most neutral benchmark for any currency exchange. It is the rate that banks and financial institutions use when trading currencies with each other.
The mid-market rate is almost never the rate you get as a consumer. When you exchange money — through a bank, a remittance provider, or a currency exchange — the provider applies a markup to the mid-market rate. That markup is how they make money on the exchange.
Why is my exchange rate different from Google?
When you search “AUD to PHP” on Google, you see the mid-market rate. When you send money through a bank or transfer provider, the rate you receive is almost always slightly worse than that — because the provider has added a margin on top.
This margin is sometimes called an exchange rate markup, a spread, or an FX margin. It is the difference between the rate the provider buys currency at (close to mid-market) and the rate they pass on to you.
Example: If the mid-market rate is AUD 1 = PHP 43, and a provider applies a 2% markup, the rate you receive is AUD 1 = PHP 42.14. On a AUD 1,000 transfer, that is PHP 860 less for your recipient — without any visible fee being charged.
This is why the true cost of a transfer is not just the fee you see — it is the fee plus the exchange rate margin combined.
What is an exchange rate markup?
An exchange rate markup is the difference between the mid-market rate and the rate a provider offers you. It is how many banks, currency exchanges and some money transfer services make their revenue — by giving you a slightly worse rate than the wholesale rate they transact at.
Markups are expressed as a percentage. A 1% markup means you get 1% fewer units of foreign currency than the mid-market rate would give you. A 3% markup means 3% fewer units.
Banks typically apply exchange rate markups of 2–5% on personal international transfers, which is why the received amount is often significantly less than what a comparison site calculator suggests.
Some specialist money transfer providers offer lower markups — or in the case of some providers, no markup at all on the exchange rate (charging a transparent fee instead). Comparing the total amount your recipient receives — not just the fee — is the only accurate way to compare providers.
What is a fixed exchange rate?
When a money transfer provider says the rate is “fixed at the time of transfer” or “guaranteed,” it means the rate shown when you confirm your transfer is the rate that will be applied — regardless of how the market moves while your transfer is being processed.
This matters because exchange rates can fluctuate between when you confirm a transfer and when it is processed. A provider that fixes the rate at confirmation gives you certainty — you know exactly how many pesos, rupees, or taka your recipient will receive before you commit.
OrbitRemit fixes the exchange rate at the time of transfer. The rate shown when you confirm is the rate applied to your transaction.
How to compare exchange rates when sending money overseas
When choosing a money transfer provider, do not compare the fee alone. Compare the total amount your recipient receives in their local currency.
Here is a simple approach:
- Go to each provider’s calculator or website
- Enter the same amount (e.g. AUD 500)
- Select the same destination country and delivery method
- Note the total amount your recipient will receive in local currency
- Choose the provider where your recipient receives the most
This accounts for both the fee and the exchange rate markup in a single comparison. It is the only number that truly matters.
Key exchange rate terms explained
| Term | What it means |
|---|---|
| Mid-market rate | The fairest benchmark rate — the midpoint between buy and sell prices on global markets. What you see on Google or XE. |
| Exchange rate markup | The difference between the mid-market rate and the rate you receive. How most providers make money on currency exchange. |
| Spread | Another term for the markup — the gap between the buy and sell price. |
| Fixed rate | A rate guaranteed at the time you confirm your transfer — it will not change before your transfer is processed. |
| FX margin | Short for foreign exchange margin. Same as exchange rate markup. |
| Interbank rate | The rate banks use when trading with each other. Equivalent to the mid-market rate. |
FAQ’s (Frequently asked questions)
What is an exchange rate in simple terms?
An exchange rate tells you how much of one currency you can get in exchange for another. For example, an AUD to PHP exchange rate of 43 means one Australian dollar buys 43 Philippine pesos.
Why is the exchange rate I get different from Google?
Google shows the mid-market rate — the wholesale benchmark used between banks. When you send money through a provider, they apply a small markup to that rate. The difference between the mid-market rate and the rate you receive is the exchange rate margin.
What is the mid-market rate?
The mid-market rate is the midpoint between the buy and sell prices of a currency on global markets. It is the most neutral benchmark for any currency pair. Most consumers receive a rate slightly worse than the mid-market rate because providers add a margin.
What is an exchange rate markup?
An exchange rate markup is the percentage difference between the mid-market rate and the rate a provider offers you. A 2% markup on an AUD 1,000 transfer to the Philippines would mean your recipient receives approximately PHP 860 less than the mid-market rate would suggest.
Does OrbitRemit fix the exchange rate at the time of transfer?
Yes. OrbitRemit fixes the exchange rate at the time you confirm your transfer. The rate shown at confirmation is the rate applied — it will not change while your transfer is being processed.
How do I get the best exchange rate when sending money overseas?
Compare the total amount your recipient will receive in local currency — not just the transfer fee. Use each provider’s calculator, enter the same amount and destination, and compare the output. The provider where your recipient receives the most is the best value for that transfer.
Send money overseas with OrbitRemit
OrbitRemit shows you the exchange rate and full fee upfront — before you confirm. Like all transfer providers except those offering the mid-market rate directly, OrbitRemit’s exchange rate includes a margin above the mid-market rate. This margin is reflected in the rate shown at checkout — there are no additional hidden charges on top of what is displayed. The rate shown when you confirm is the rate applied to your transaction, with no deductions at the receiving end.
- Exchange rate fixed at the time of transfer
- Full fee shown upfront — no hidden charges
- 52 destination countries from Australia and New Zealand
- Fee-free above AUD or NZD 10,000
- Regulated by ASIC in Australia (AFSL: 470646) | DIA-supervised in New Zealand (FSP7721)
- Rated Excellent on Trustpilot from over 34,000 reviews
Exchange rates change constantly and vary between providers. Always check the live rate and total amount your recipient will receive before confirming any transfer. Last updated June 2026.
