Every currency (FX) conversion is priced at the time of quote or conversion as a single formula:

Customer Rate = Live FX Rate + Spread (bps)

Components of the calculation

Customer Rate - The effective rate for the conversation, expressed as a ratio between the two currencies.
- Depending on which currency is being exchanged for another the ratio can also be thought of as equivalent to the inverse transfer - for example, when converting EUR to GBP the EUR:GBP rate may be 0.8904 which would be same as a GBP to EUR GBP:EUR conversion at a rate of 1.1230
Live FX Rate - is the live rate quoted to Modulr by its FX partners at the moment of conversion. It may differ slightly from publicly available reference rates ("Mid Market Rates") shown on sources such as Google or XE.com.
- Under normal market conditions, the Live FX rate available on any quote or trade execution typically sits 1–3 bps above commonly available reference rates often called "mid market rates (MMR)" for Tier 1 currencies
- Note: For other Tiers the gap in basis points (bps) may be wider due to higher interest rate differentials in those markets. Rates may increase in volatile market conditions and outside the hours of operation of Foreign Exchange markets. Modulr is not responsible or liable for movements in the Live FX Rate.
Spread - is Modulr's charge (in basis points) for the currency conversion service over the Live FX Rate. Unless otherwise agreed in your contract the following rates are applied for different currency tiers.
- Currencies are allocated into different Tiers by Modulr; with a spread for each Tier defined in your contract, or using the default below.

Currency Tiers

Currency Tier	Currencies
Tier 1	GBP, EUR, USD
Tier 2	AUD, CAD, CHF, DKK, JPY, NOK, NZD, SEK
Tier 3	CZK, HUF, PLN, RON, AED, SGD, HKD
Tier 4	TRY, THB

Any currency conversion can only be performed where at least Tier 1 currency is specified as either the Initial Currency or Exchange Currency.

What does this mean?
You can only execute a conversion between accounts that you have on our platform where one account is a Tier 1- such as EUR>AUD or JPY>GBP - conversions between lower Tier currency accounts directly is not allowed (e.g. trying to convert CAD>SGD will throw a validation error in our API).
TIP: If you want to move CAD to SGD you can do this in two conversions through a Tier 1 currency account. e.g. CAD>EUR account then EUR>SGD account

Default Spread

Default	Tier 1	Tier 2	Tier 3	Tier 4
Spread (bps)	26	44	68	99

These are default rates, and further rates are available for higher volume customers who can commit to larger (nominal gross) currency conversions across a contract period. Speak to your account manager for more information.

How everything is shown in your transaction information

For transparency, the transaction information (including a Quote if one is requested pre-execution) made available to you will show the Live FX Rate, the Mid-Market Rate, and the Fee applied to your conversion.

What is this Mid Market Rate (MMR) thing anyway?

The mid-market rate is a widely used reference representing the midpoint between the buy and sell price for a given currency pair in a particular market at a given moment - it's commonly used to see how competitive an exchange rate is.

There is no single 'global' MMR - the Foreign Exchange Markets are complicated, with different markets, participants, instruments and derivatives. There are data aggregators like LSEG that work across these markets to deliver comparatives and data sets used by companies. This is why there will sometimes be slight differences in the MMR shown on sources such as Bloomberg or XE.com.

How does Modulr Calculate the Fee shown in transaction information?

To give you a clear, comparable reference point, Modulr discloses its own Mid-Market Rate: the midpoint between the bid and offer rates available to Modulr through its institutional FX liquidity providers at the time of conversion. We don't confuse with misleading '0% fee' or 'zero commission' offers seen in the consumer space - you see what we see.

The Fee is the monetary difference between the amount you would have theoretically paid or using the Mid-Market Rate, and the amount you actually paid using the Customer Rate. It is inclusive of the Live FX Rate + Spread outlined above and is the - the total effective cost your conversion, no further fees or charges apply.

Limits for Currency Conversion

The follwing limits apply for currency conversions.

Internal Account-to-Account (A2A) transfers - Limit of GBP £100,000 per transfer (and the equivalent in other currenices as determined by Modulr from time to time)
Dynamic (rule triggered) conversion for Card Authorisation - A limit of GBP £25,000 per transfer (and the equivalent in other currenices as determined by Modulr from time to time)

Any currnecy conversion above these limits will be rejected. In the case of Dynamic (rule triggered) conversion for Card Authorisation this means the upstream card transaciton will be declined as funds are not made available in the card linked account.