The hidden FX markup on your payments to India, and how to find it
On a payment to India, the exchange rate often costs more than the fee. How UK payers can measure the markup, see who applies it and compare providers on total cost.
Your bank statement shows one charge against last month's payment to your development team in Bangalore: a flat transfer fee, small enough that nobody queried it. The invoice was settled and the team was paid. But that fee was only the part of the cost your bank chose to show you. The rest sat inside the exchange rate, where it never appears as a line item.
An exchange rate is a price, and like any price it can carry a margin. For a UK business paying people in India, that margin is often the largest single cost of the payment, and it is the one most finance teams never measure. This is how to find it.
What an FX markup actually is
Every currency pair has a mid-market rate: the midpoint between the price at which banks buy a currency and the price at which they sell it, moving through the trading day. It is the rate you see when you search for a currency conversion online. Providers rarely convert your money at that rate. They give you their own rate, set slightly worse than mid-market, and keep the difference.
That difference is the markup, also called the FX margin or spread. It is a percentage, so it grows with the payment. A flat fee costs the same on £2,000 as on £200,000. A 2% markup costs £40 on the first and £4,000 on the second.
The FCA has been plain about how this should be presented. In its May 2025 review of international payment pricing for retail customers, it listed as poor practice firms that highlight a zero fixed fee while charging a markup, because it gives the impression that no costs apply. Its good-practice examples describe a markup as what it is: a cost to the customer. Not every business payment falls under that guidance, but the lesson holds for any payer. A quote with no fee can still be the most expensive one on the table.
How to measure the markup on your own payments
You need two rates taken at the same moment: the rate your provider applied, and the mid-market rate at that time. Your provider's rate is on the quote screen or the payment confirmation. For the mid-market rate, use a public currency converter, or the reference rate your provider shows if it shows one. Then:
Markup (%) = (mid-market rate − your rate) ÷ mid-market rate × 100
Say the mid-market rate is 100 rupees to the pound and your bank gives you 98. That is a 2% markup. On a £10,000 payment your vendor receives ₹980,000 instead of ₹1,000,000, and the missing ₹20,000 is a cost of the payment, even though nothing on your statement says so. The numbers are round to keep the arithmetic clear; real rates move by the minute.
Two things make this harder than it sounds. Rates move, so a mid-market rate checked an hour later is not a fair comparison: take a screenshot of both when you confirm. And if your bank only shows you the sterling amount debited, divide what your vendor received by what left your account. That gives you an effective rate that includes every deduction along the way, which is the honest number to compare anyway.
Who is converting your money?
On a payment to India, the conversion does not always happen where you expect. There are three common set-ups, and each puts the markup in a different place.
- You pay in sterling and your bank converts to rupees. Your bank sets the rate and keeps the margin. You can see the rate before you send, so you can measure it.
- You pay in sterling, your bank converts to US dollars, and your vendor's bank converts the dollars to rupees. That is two conversions and two margins. You see the first. The second happens in India, at a rate your vendor's bank chooses, and you only hear about it if your vendor tells you.
- You hold dollars and pay in dollars. There is no conversion on your side, so your cost looks like zero, but the whole conversion now happens at your vendor's end. If the invoice is in rupees, you may be asked to make up the gap.
The second set-up is the one that catches people out, because half the cost is invisible to the payer. Agree the payment currency with your vendor before the first invoice, and ask them which currency their account receives. The fees charged by banks along the route are a separate cost again; we covered those in why your Indian vendor received less than you sent.
Comparing providers on the number that matters
Specialist providers publish their FX pricing, which makes them easier to compare than most bank tariffs. The table below uses the same data as the calculator on our homepage, for payments sent from the UK, quoted as each provider publishes it. It splits the fixed fee from the published FX charge so you can see how much of the cost sits in the rate.
| Provider (plan) | Fixed fee | Published FX charge | Fee on $10,000 | Fee on $50,000 |
|---|---|---|---|---|
| Wise (Business) | $7.08 | 0.4182%, USD→INR bank-funded quote, as checked 19 Sep 2026 | $48.90 | $216.18 |
| Revolut (Basic) | £5 | 0.6% above £1,000 a month | $58.66 | $298.66 |
| Payoneer (Business) | Up to $20 minimum | From 1.2% (lower-bound estimate) | $120.00 | $600.00 |
| Airwallex (Business) | $25 | 1% for INR | $125.00 | $525.00 |
Look at the last two columns. On $10,000 the fixed fee is still a visible part of the cost. On $50,000 it barely registers: for every provider in the table, more than 95% of the cost is the percentage charge. The bigger and more regular your payments to India, the more the rate matters and the less the fee does.
The fair comparison is the amount your vendor receives for the amount that leaves your account, measured at the same moment. Get quotes for the same payment from two or three providers at the same time and compare that one number. It captures the fee, the markup and anything deducted on your vendor's side, which a fee-only comparison misses.
Banks are harder to compare this way, because many set the rate at the moment you send rather than publishing a fixed percentage for each currency. Ask yours for the FX margin it applies to business payments of your size, or work out the effective rate on your last few payments to India using the method above.
Habits that keep the markup visible
- Record the rate on every payment. Add the applied rate and the mid-market rate at the time to your payment log. After a quarter you will know what your provider really charges.
- Agree the payment currency in writing. If the invoice is in dollars, pay in dollars, and both sides know who bears the conversion. If it is in rupees, find out who is converting and at what rate before the first payment.
- Ask your vendor what arrived. Their bank's credit advice shows the rupee amount and often the rate their bank applied. It is the only way to see a conversion that happens in India.
For a monthly payroll to a team in India, a one-point difference in markup is a cost you pay every month for as long as you work together. Timing is the other half of the comparison, and we covered it in how long does a payment to India actually take.
Where Winvesta fits
Winvesta lets you pay Indian vendors, contractors and teams in US dollars with no sender fee and no markup on your side. You send one USD transfer from your business account with the invoices attached, and we split it across your vendors. We convert the net invoice amount at the live USD→INR rate, and vendor-side charges are shown before you send, so neither of you discovers a cost afterwards.
Two limits to be clear about. We are live on USD to INR today, so if your business account holds sterling, your own bank's conversion from pounds to dollars still applies, and its margin is worth measuring with the method above. And Winvesta is not a UK bank account and does not give tax advice. If you want to see what your payments to India would cost, tell us about them.
Frequently asked questions
What is a hidden FX markup?
It is the difference between the exchange rate a provider gives you and the mid-market rate, kept by the provider as a charge. It is called hidden because it is built into the rate rather than shown as a separate fee.
How do I calculate the markup on a payment to India?
Take the mid-market rate and your provider's rate at the same moment, subtract your rate from the mid-market rate, divide by the mid-market rate and multiply by 100. If you only know what left your account and what arrived, divide one by the other to get an effective rate that includes every deduction.
Is a provider with no transfer fee always cheaper?
No. A provider can charge no fixed fee and still apply a markup to the rate. The FCA lists highlighting zero fees while charging a markup as poor practice for this reason. Compare what your vendor receives for the same amount sent.
Should I pay my Indian vendor in pounds, dollars or rupees?
That is a commercial choice between you and your vendor. What matters is agreeing it in writing and knowing who converts the money, because whoever converts sets the rate. Ask your vendor which currency their account receives.
Does Winvesta charge an FX markup?
There is no sender fee and no markup on your side. We convert the net invoice amount at the live USD→INR rate, and vendor-side charges are shown before you send. If you pay from a sterling account, your own bank's conversion to dollars still applies.
