Why Google Rate Isn't the Real Exchange Rate

Introduction

You've probably done this: searched "EUR to INR" on Google, seen the rate, and assumed that's what you'll get when sending money to India. But then the actual amount your recipient receives is surprisingly less. What happened? The Google rate isn't the rate you actually get, and understanding why can save you significant money.

What is the Google Rate?

When you search for exchange rates on Google, you see the mid-market rate (also called the interbank rate). This is the midpoint between the buying and selling price of currencies in global wholesale markets. It's the rate banks use when trading large amounts with each other.

Think of it as the wholesale price—real, but not available to retail customers like you and me.

The Mid-Market Rate: A Reference Point

The mid-market rate is:

• The rate used by financial institutions trading among themselves

• Updated constantly based on market conditions

• The fairest representation of a currency's value

• Not the rate ordinary consumers can access

It's similar to seeing the factory price of a product. By the time it reaches you, there are additional costs involved.

Why You Don't Get the Google Rate

1. Currency Exchange Markup Most banks and money transfer services add a margin to the mid-market rate. This markup can range from 1% to 5% or even higher. For example:

• Mid-market rate: 1 EUR = 88 INR

• Bank's rate: 1 EUR = 85 INR

• You lose: 3 INR per EUR (approximately 3.4% markup)

2. Transfer Fees Beyond the exchange rate markup, services charge:

• Fixed transfer fees (€5-€25 per transaction)

• Percentage-based fees (1-3% of transfer amount)

• Receiving fees (sometimes charged by the recipient's bank)

3. Hidden Costs Some providers advertise "zero fees" but compensate by:

• Offering significantly worse exchange rates

• Adding intermediary bank charges

• Applying currency conversion fees

4. Payment Method Fees Your payment method affects costs:

• Credit card: Often 2-3% additional fee

• Debit card: Lower or no additional fees

• Bank transfer: Usually the cheapest option

Real Example: The True Cost

Let's say you want to send €1,000 to India:

Scenario 1: Traditional Bank

• Google rate: 1 EUR = 88 INR

• Bank's rate: 1 EUR = 85 INR

• Transfer fee: €15

• You pay: €1,015

• Recipient gets: ₹85,000

• Real rate you got: 1 EUR = 83.74 INR

• Cost: 4.8% below mid-market rate

Scenario 2: Transparent Service

• Mid-market rate: 1 EUR = 88 INR

• Service rate: 1 EUR = 87.5 INR

• Transfer fee: €3

• You pay: €1,003

• Recipient gets: ₹87,500

• Real rate you got: 1 EUR = 87.24 INR

• Cost: 0.9% below mid-market rate

The difference? ₹2,500 more for your recipient with the transparent service.

How to Find the Real Rate You're Getting

Calculate the true exchange rate:

1. Take the total amount your recipient receives (in INR)

2. Divide by the total amount you're sending (in EUR)

3. Compare this to the mid-market rate

Formula: Real Rate = (Amount Received) ÷ (Amount Sent)

This reveals the true cost, including all fees and markups.

Red Flags to Watch For

"Zero Fees" Claims If there's no transfer fee, check the exchange rate carefully. The markup is likely much higher than services that charge transparent fees.

"Bank Rate" or "Official Rate" These vague terms often hide poor exchange rates. Always ask for the specific rate you'll receive.

Rates That Seem Too Good If a service offers a rate better than the mid-market rate, something is wrong. No one can sustainably offer better than wholesale prices.

Complex Fee Structures Multiple fees (sending fee, receiving fee, conversion fee) can hide the true cost. Look for services with straightforward pricing.

What to Look for Instead

1. Transparency Choose services that clearly show:

• The exact exchange rate you're getting

• All fees upfront

• Total amount recipient will receive

2. Proximity to Mid-Market Rate The closer to Google's rate, the better. Services within 0.5-1% of the mid-market rate are competitive.

3. Clear Fee Structure One simple fee is better than multiple hidden charges.

4. Rate Lock-In Some services let you lock in a rate for a short period, protecting you from fluctuations while you complete the transfer.

Why Transparency Matters

When you understand the real exchange rate, you can:

• Compare services accurately

• Make informed decisions

• Save hundreds or thousands over time

• Avoid deceptive marketing

For regular remittances, even a 1% difference in exchange rate can mean thousands of rupees in savings annually.

The SimplyRemit Difference

At SimplyRemit, we believe in radical transparency:

• Exchange rates clearly displayed before you commit

• Fees shown upfront with no surprises

• Rates close to the mid-market rate

• No hidden charges or complex fee structures

• Real-time comparison tools to see exactly what you're getting

Conclusion

The Google rate is useful as a benchmark, but it's not the rate you'll actually get when sending money. Understanding the difference between mid-market rates and retail rates empowers you to choose services that offer fair, transparent pricing. Don't just search for exchange rates—search for services that respect your money and your intelligence.