Where the real cost of a money transfer hides

You send 1,000 US dollars to Nigeria. Service A says "no fee". Service B says "5 dollar fee". Which one is cheaper?

You cannot tell yet, and that is the whole problem. A transfer can cost you in three places, and many services only show you the first.

1. The fee

This is the number on the label: "5 dollars", "1.5%", or "free". It is the easiest cost to compare, and the easiest to make look small.

2. The exchange rate

Every currency pair has a mid-market rate: the midpoint between what buyers and sellers are asking on the market. It is the fairest rate to compare against, and you can look it up for free.

A service that gives you less than the mid-market rate is charging you the difference. It is a real cost; it just does not have a label.

Here is a made-up example, with illustrative numbers and no real provider:

The mid-market rate is 1,500 naira per dollar.
Service A ("no fee") converts at 1,455, a 3% mark-up. Your 1,000 dollars become 1,455,000 naira.
Service B (5 dollar fee) converts at 1,500. Your remaining 995 dollars become 1,492,500 naira.

Service A was "free" and cost you 37,500 naira more. The rate was where the money went.

3. What your recipient pays to cash out

Some services take a charge on arrival, or the recipient's bank adds one. If your recipient needs 1,450,000 naira and gets 1,445,000, that is a cost too, just not one you saw.

The test that always works

Ask three questions before you send:

What is the fee?
What exchange rate do you use, and what is today's mid-market rate?
Exactly how much will my recipient receive, after any charges?

If a service cannot answer all three before you pay, treat that as the answer.

This is how Monk Pay shows every transfer: the fee, the mid-market rate, our margin and what arrives, each on its own line. See the numbers for your own amount.