Bank rate vs market rate: who gets the spread on your group's expenses?
Last updated by The EvenRound team.
Your bank's exchange rate is 2-4% worse than the mid-market rate. On a €5,000 trip, that's €100-200 silently going to the bank.
Most travellers don't realise their bank charges them a 'spread' on every foreign-currency transaction - typically 2-4% above the mid-market rate. For an individual €40 dinner this is €1-2. For an entire group trip with €5,000 in shared expenses split across 6 people, this is €100-200 silently absorbed by whoever's card was used most. Understanding this spread changes how you decide who pays what abroad.
What 'mid-market rate' means
The mid-market rate is the rate at which currencies are exchanged between large banks themselves - wholesale, no margin. It's the rate Google shows when you search 'EUR to GBP'. Retail customers (you) get a worse rate because the bank or fintech adds a margin. The margin is the bank's revenue.
Typical spreads by provider
Major banks (Chase, HSBC, Santander, Deutsche Bank): 2-4% spread on foreign transactions, sometimes plus a flat fee. Cash bureaux (especially at airports): 4-10%. PayPal cross-currency: ~4%. Wise: 0.4-0.7%. Revolut: 0.3% during weekdays, 1% on weekends. Bank-issued travel cards: usually 0.5-2%. The cheapest is always Wise or Revolut.
Why this matters for group expense splitting
If one person uses a major-bank credit card abroad for the whole group, they're absorbing 2-4% on top of their own share. The split itself doesn't capture this - they paid €40 in EUR but it cost them £36 + 3% = £37.10. Equal-splitting still divides €40, leaving the bank-card user €1-2 short for every €40 they paid.
How to handle bank spreads in a group
Three approaches: (1) Ignore it - for small spreads (<2%) on short trips, the math isn't worth the social complexity. (2) Designate a Wise or Revolut user as the 'group payer' so spreads are minimised. (3) Reimburse the bank-card user with a small premium (e.g., 'we'll pay you €41 for every €40 you put on your bank card'). Option 2 is by far the cleanest.
Apps that help here
EvenRound uses ECB mid-market for snapshotting, so the recorded amount is at the fairest rate. The actual payment to the group payer happens at their settlement-rail rate (Wise or Revolut, ideally). This decouples the recorded math from the spread: you don't argue about €40 being worth £36 vs £37; everyone agrees on €40, and Wise handles the conversion at settlement.
Bank spreads are real money. For group trips, designate a Wise or Revolut user as the primary payer - it's the cheapest way to keep the group's money in the group, not at the bank.