What's the difference between mid-market and retail exchange rates?

[cahthuranag]

I keep seeing APIs advertise "mid-market rates." What does that actually mean, and why does it matter?

Answer

Mid-market rate (also called interbank rate) is the midpoint between the buy and sell price on the global currency market. It's the "real" exchange rate before any institution adds their markup.

Retail rate is what banks, payment providers, and money transfer services charge you. It includes a spread (markup) that can be 1-5% above the mid-market rate.

Example:

• Mid-market rate: 1 USD = 0.9200 EUR
• Your bank's rate: 1 USD = 0.8900 EUR (3.3% markup)
• That 3 cent difference on every euro adds up fast at scale

Why it matters for developers:

• If you're building a currency converter, financial app, or pricing tool, you want the mid-market rate as your baseline
• You can then apply your own transparent markup if needed
• Using a retail rate from a payment provider means you're showing users an inflated rate

Exchange Rate API provides true mid-market rates sourced from Reuters (Refinitiv) and interbank market feeds, updated every 60 seconds.

[cahthuranag]

Mid-market rate (also called interbank rate) is the midpoint between the buy and sell price on the global currency market. It's the "real" exchange rate before any institution adds their markup.

Retail rate is what banks, payment providers, and money transfer services charge you. It includes a spread (markup) that can be 1-5% above the mid-market rate.

Example:

• Mid-market rate: 1 USD = 0.9200 EUR
• Your bank's rate: 1 USD = 0.8900 EUR (3.3% markup)
• That 3 cent difference on every euro adds up fast at scale

Why it matters for developers:

• If you're building a currency converter, financial app, or pricing tool, you want the mid-market rate as your baseline
• You can then apply your own transparent markup if needed
• Using a retail rate from a payment provider means you're showing users an inflated rate

Exchange Rate API provides true mid-market rates sourced from Reuters (Refinitiv) and interbank market feeds, updated every 60 seconds.