The cost of converting currency is rarely the fee shown on the receipt. Most of it sits inside the exchange rate applied to the transaction.
There are two rates, not one
Wholesale currency trades between large institutions at a rate that moves continuously. That mid-market rate is the reference point everything else is measured against.
A retail customer is never offered the mid-market rate. They are offered a rate set slightly worse, and the difference is the provider's margin.
Because the margin is expressed as a rate rather than a charge, it does not appear as a line on the statement even though it is the larger cost.
The spread is the actual price
Providers quote one rate for buying a currency and another for selling it. The gap between the two is the spread.
A wide spread on a zero-commission service can cost considerably more than a narrow spread with a visible flat fee, particularly on small amounts.
Comparing offers therefore requires converting everything to a single question: how many units of the destination currency actually arrive for a given amount sent.
Point-of-sale conversion adds a second layer
When a card terminal abroad offers to charge in the cardholder's home currency, the conversion is performed by the merchant's provider rather than the card network.
That provider sets its own rate, and it is generally less favourable than the network rate that would otherwise apply. The offer is presented as a convenience.
Declining it returns the transaction to the card network's own conversion, which is usually the narrower spread of the two available options.
Timing and settlement introduce further gaps
The rate that applies is fixed at the moment the transaction is processed, which may be a day or more after the purchase was made.
For volatile pairs the movement in that interval can exceed the fee entirely, in either direction, and neither party controls it.
Cross-border transfers add correspondent bank charges deducted in transit, which is why the amount received sometimes falls short of the amount confirmed at the sending end.
Disclosure rules differ by market
Several jurisdictions now require providers to state the total cost of a transfer, including the rate margin, before the customer commits.
Coverage is uneven. Rules typically apply to particular product types and particular corridors, leaving other routes disclosed only as a rate.
The practical response is arithmetic rather than trust in labels: compare the final delivered amount across providers, since that figure absorbs every charge whatever it is called.