Your statement tells you what you were charged in fees. It does not tell you what the payment cost you. The difference between the two is the conversion markup, and the only way to see it is to do the sum yourself. It takes five minutes.
What you need
- The gross amount your client paid, in their currency.
- The date and, if you can, the time of the payment (your provider's dashboard shows it).
- What reached your account, in your currency.
The five steps
Take a $5,000.00 card payment from a US client to a business in Spain, through Stripe. The 0.90 exchange rate is an example to keep the sums readable, not today's rate.
| Step | Value |
|---|---|
| 1. Gross charged to the client | $5,000.00 |
| 2. Mid-market rate at that moment (illustrative) | 1 USD = 0.90 EUR |
| 3. Fair value in euros (1 × 2) | €4,500.00 |
| 4. What reached your bank | €4,270.86 |
| 5. Real cost (3 − 4) | €229.14 (5.09%) |
- Step 1. The gross is what left your client's account, before any fee.
- Step 2. Look up the mid-market rate for the day and hour of the payment. Google Finance, XE and Reuters all show historical rates. Do not use the rate your provider gave you: that one already has its markup inside.
- Step 3. Multiply. This is what the payment was worth in your currency if nobody had kept anything.
- Step 4. What you were actually paid, after everything.
- Step 5. The difference is the total cost. Divide it by step 3 and you have the real percentage you paid.
Separating what you see from what you do not
In this example, the fees that appear as lines on the statement (the card fee and the foreign-card surcharge) come to about €141.98. The total cost is €229.14. The missing €87.16 is the conversion markup: money you paid that does not appear anywhere under that name.
If it has ever felt like "a bit less than expected always arrives", this is almost always why. I explain it in more detail in the guide to conversion markups.
The spreadsheet formula
With the gross in column A, the mid-market rate in B and the amount received in C:
- Real cost:
=A2*B2-C2 - Real percentage:
=(A2*B2-C2)/(A2*B2)
Do it for your last three payments. If the percentage varies a lot between them with the same provider, look at the amount: fixed fees weigh more on small payments. At these same rates, a $49.00 payment costs 5.59%, against 5.09% on a $5,000.00 one.
What to do with the result
- Compare it with what the same payment would cost through other routes in the calculator. If the gap is large and the client is recurring, it is worth changing method.
- If your real percentage is much higher than the calculator's, your provider may have changed its rates. Send me the statement and I will check it.
- If you are paid in dollars often, read how to get paid by US clients from Europe.
Every figure in this guide is calculated from the providers' public pricing pages, with the same function as the calculator. See the methodology for what the model includes and leaves out.