What is an exchange rate? How currency prices work
By SendPay Business · · 2 min read
An exchange rate is the price of one currency in another. If the GBP/EUR rate is 1.15, one pound buys 1.15 euros. Rates change all day as currencies are bought and sold around the world.
Why exchange rates move
Rates move with supply and demand. Interest rates, inflation, economic news and politics all change how much people want to hold a currency, and so its price.
The rate you see vs the rate you get
- The mid-market rate is halfway between the buy and sell prices on the wholesale market.
- Providers usually offer a rate a little worse than that, and keep the difference.
- Some also charge a separate fee, so compare the total you'll receive, not just the fee.
Reading a quote
A quote like GBP/USD 1.27 means one pound costs 1.27 dollars. The first currency is the base and the second is the quote currency. Flip the pair and the rate becomes 1 divided by 1.27.
Where SendPay fits
SendPay platforms include GBP, EUR and USD accounts and exchange between them under your own brand, powered by licensed partners. You can preview your platform before you pay.
Build it
Create your own financial platform.
Pick a template, name it, brand it, preview every page before you pay. Your brand, your users, your fees.
Build my platform →Questions people ask
How do I work out a rate between two other currencies?
Get a cross rate from two rates you know.
Currency cross rate calculator →Which currency looks cheap?
Compare prices between countries and find the PPP exchange rate, free.
Purchasing power parity calculator →What does sending money abroad really cost?
Add up the fee and the rate markup.
Money transfer cost calculator →What is the mid-market rate?
The fair rate halfway between buy and sell.
What is the mid-market rate? →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.