Sending money to family abroad is one of the most meaningful things you can do for the people you love. Whether you are supporting relatives across continents or helping cover everyday essentials from thousands of kilometres away, you want every euro to count. But between exchange rates, fees, and fine print, it is not always easy to know exactly how much will arrive on the other side. Understanding how exchange rates work in an international money transfer puts you in control and helps you make smarter decisions every time you send money.
This guide breaks down the key questions about exchange rates in plain, simple language so you can send with confidence and make sure your money goes further.
What is an exchange rate, and how does it work?
An exchange rate is the price of one currency expressed in terms of another. It tells you how many units of a foreign currency you receive for every euro you send. For example, if the exchange rate between the euro and the Nigerian naira is 1 to 1,600, sending €100 would give the recipient 160,000 naira before any fees are applied.
Exchange rates exist because different countries use different currencies, and global trade, travel, and remittances all require converting between them. These rates are set continuously by the foreign exchange market, which operates around the clock across financial institutions worldwide. The rate you see when you send an international money transfer is based on this global market, although the rate you are actually offered may differ from the raw market price.
How do exchange rates affect the amount received in a money transfer?
The exchange rate directly determines how much money your recipient receives in their local currency. Even a small difference in the rate can have a meaningful impact on the final amount, especially when sending larger sums or sending regularly over time.
Consider two scenarios. You send €200 at a rate of 1 to 1,580, and your family receives 316,000 naira. The following week, the rate shifts to 1 to 1,650, and the same €200 now delivers 330,000 naira. That is 14,000 naira more for exactly the same amount sent. Over months and years of regular transfers, these differences add up significantly. This is why it is worth paying attention to the rate you are offered, not just the transfer fee.
What’s the difference between the mid-market rate and the rate you’re offered?
The mid-market rate, sometimes called the interbank rate or the real exchange rate, is the midpoint between the buying and selling prices of two currencies on the global market. It is the rate you see on Google or financial news sites. The rate you are offered by a money transfer provider is almost always slightly less favorable than this benchmark.
The gap between the two is known as the exchange rate margin or spread. This is how many providers make part of their profit. A provider might advertise no fees while quietly building a margin into the exchange rate, meaning you receive fewer units of the destination currency than the mid-market rate would suggest. For those sending money to countries such as Nigeria, Ethiopia, or Eritrea, this can mean a notable difference in what your family actually receives in naira, birr, or nakfa.
- Mid-market rate: The true, unbiased exchange rate used between banks
- Offered rate: The rate a transfer provider gives you, which includes their margin
- The spread: The difference between the two, which represents a hidden cost
- Transparent providers: Show you both rates clearly so you can calculate what your recipient actually receives
When comparing providers for your next international money transfer, always check the offered rate against the mid-market rate, not just the advertised fee.
Why do exchange rates change so often?
Exchange rates fluctuate constantly because they are driven by supply and demand in the global currency market, which responds to economic events in real time. The rate between the euro and any given currency can shift multiple times within a single day.
Several factors drive these movements:
- Inflation levels: Higher inflation in one country typically weakens its currency relative to others
- Interest rate decisions: Central banks raising or lowering interest rates affect how attractive a currency is to investors
- Political stability: Elections, policy changes, or conflict can cause sharp currency movements
- Trade balances: Countries that export more than they import tend to have stronger currencies
- Global market sentiment: Broader economic uncertainty can shift demand for certain currencies quickly
For diaspora communities sending money home regularly, including those supporting families across Africa, this volatility is a practical reality. Timing your transfer during a favorable rate period can make a real difference in how much your family receives.
How can you get a better exchange rate on international transfers?
Getting a better exchange rate comes down to comparing providers carefully, timing your transfers when possible, and understanding the full cost of a transaction rather than focusing only on the headline fee.
Here are practical steps you can take:
First, always compare the offered exchange rate across multiple providers, not just the transfer fee. A provider with zero fees but a poor exchange rate may cost you more overall than one that charges a small flat fee but offers a rate closer to the mid-market benchmark.
Second, if your transfer is not urgent, monitor the rate over a few days. Many transfer apps allow you to set rate alerts so you are notified when the rate reaches a level you are comfortable with. Third, sending larger amounts less frequently can sometimes reduce the proportional impact of fees, though this depends on your personal situation and the recipient’s needs.
What are the hidden costs to watch out for in international transfers?
Hidden costs in international money transfers typically appear in three places: the exchange rate margin, intermediary bank fees, and receiving fees charged on the recipient’s end. Understanding each one helps you avoid unpleasant surprises.
The exchange rate margin is the most common hidden cost. A provider may advertise “free transfers” while offering an exchange rate that is significantly below the mid-market rate. The difference goes to the provider, not your recipient. Always calculate the total amount your family will receive in their local currency before confirming a transfer.
Intermediary bank fees can apply when a transfer passes through one or more correspondent banks on its way to the destination country. These fees are sometimes deducted from the transfer amount without clear disclosure upfront. Receiving fees are charged by the recipient’s bank or mobile money provider and can also reduce the final amount delivered.
Transparent providers will show you the full picture before you confirm, including the exchange rate used, any flat fees, and the exact amount your recipient will receive. If a provider cannot give you a clear answer to these questions, that is a sign to look elsewhere.
How FroggyTalk helps with international money transfers
We built FroggyTalk because we believe staying connected to the people you love should never cost more than it has to. That same principle drives our International Money Transfer Service, which is designed specifically for African diaspora communities across Europe.
- Competitive, transparent exchange rates with no hidden margin surprises
- No hidden fees, so your family receives exactly what you expect
- Real-time transaction tracking so you always know where your money is
- Multilingual support in Tigrinya, English, Arabic, Hausa, Amharic, Dutch, French, Swedish, Danish, Norwegian, and Italian, with everything in the app translatable into your local language
- A single platform where you can manage both your calls and your transfers, because your time matters
We want you to feel heard, seen, and valued—not just as a customer, but as someone whose connections across borders truly matter. Whether you are sending money home for the first time or looking for a more reliable alternative to what you use now, we are here to make it simpler and more affordable.
See exactly how much your family will receive, or get in touch with our team if you have questions. We are ready to help.