FX margin
aka foreign exchange margin, FX spread, currency conversion fee
The markup a bank or fintech platform charges above the interbank mid-market exchange rate when converting currencies. A 2% FX margin on a USD 10,000 payment costs the Irish business EUR 200 compared to converting at the mid-market rate.
Last reviewed May 2026
Definition
When an Irish business converts EUR to USD (or any other currency), the provider applies an exchange rate. The difference between the mid-market rate - the midpoint between the buy and sell rates on the interbank market, published by Reuters and Bloomberg - and the rate the provider actually applies is the FX margin. A 1.5% margin on EUR 50,000 of annual USD supplier payments costs EUR 750 per year purely in conversion overhead. Traditional Irish banks (AIB, Bank of Ireland) typically apply FX margins of 2 to 3.5 percent above mid-market on business accounts. The exact rate is often not published prominently and can vary by transaction size and currency pair. Fintech providers compete directly on this number: Wise Business charges a transparent fee of 0.4 to 1 percent depending on currency pair; Revolut Business on paid plans converts at interbank rates up to a monthly FX allowance, then applies a 0.5 to 1 percent fee above the allowance. For Irish importers and exporters the FX margin is a recurring cost that compounds. A company doing EUR 500,000 per year in USD payments pays approximately EUR 10,000 to EUR 17,500 per year at a 2 to 3.5 percent bank margin versus approximately EUR 2,000 to EUR 5,000 at a fintech rate. This is the primary economic case for pairing a traditional Irish bank account (for SEPA, domestic payments, and lending) with a Revolut or Wise account (for non-EUR supplier and client flows). FX margins are distinct from wire transfer fees (a flat per-payment charge) and from SWIFT correspondent banking fees (charged by intermediate banks in the payment chain). Total FX cost for an international payment is the sum of all three.
Why it matters for software choice
FX margin is the silent cost most Irish SMEs underestimate when banking with a traditional bank for non-EUR payments. Switching the non-EUR portion of business payments to Revolut Business or Wise Business typically saves 1 to 2.5 percentage points per conversion, which is material once annual foreign-currency flows exceed EUR 50,000.
Authority sources
- European Central Bank: Euro foreign exchange reference rates (www.ecb.europa.eu)
- Competition and Consumer Protection Commission: Foreign exchange services (www.ccpc.ie)
Software categories this affects
Vendors covered by this term
Revolut Business
EU-licensed business banking with Irish IBANs, SEPA Instant, and multi-currency accounts
Wise Business
Multi-currency business account with mid-market FX rates and EU IBAN for Irish SMEs
Related terms
Multi-currency account
A business account that holds balances in multiple currencies simultaneously, allowing Irish SMEs to receive, hold, and pay in USD, GBP, EUR and other currencies without converting each time.
ECB rate
Daily mid-market euro exchange rates published by the European Central Bank at 16:00 CET. The benchmark used by fintechs like Wise to price FX conversions and by Irish businesses to verify how much their bank marks up currency conversions.
Irish IBAN
International Bank Account Number issued by Irish-based banks. 22 characters starting with IE, includes a 6-digit sort code and 8-digit account number. Required for SEPA payments.