Open your bank's FX screen. Open a second bank's. If the dollar-peso rate matches to the fourth decimal, you are not looking at two prices.
You are looking at one reference, passed along twice. Two desks that actually trade almost never land on the same price to four decimals. That is the whole problem with measuring FX cost, and it takes two minutes to see.
This is written for whoever runs treasury or FX at a fintech, PSP, remittance company or exporter converting more than USD 5 million a month. Below that, the exercise is still right but rarely worth a provider change. Above it, the gap between what you pay and what you could pay is often the size of a senior finance salary.
What makes up the cost of converting pesos to dollars?
An FX cost has three parts, and providers can move money between them.
- The spread. The gap between the rate you get and the market rate at that moment. The biggest part and the hardest to see.
- The transfer fee. Moving the money: a network fee on a stablecoin, correspondent fees on a wire. Small next to the spread at institutional size.
- The fiat fee. A charge for receiving or paying out pesos on the local rail, when it is billed separately.
This is why comparing published fees gets you nowhere. A provider can post a very low fee and make it back in the rate it executes at, and no invoice will show it. The fee and the spread are two pockets of the same coat.
A basis point is one hundredth of one percent. On a million dollars, one basis point is a hundred dollars. Hold on to that for the table below.
How do you know what you are paying for MXN FX today?
Most treasuries cannot see it, and not from carelessness. If your accounting system books the trade at the day's reference rate, the peso figure in the ledger is a calculation, not the rate you got. The real cost lives outside the record. So you have to go and get it.
The hidden cost of bank FX: two days of cash in transit
Time. On the banking road a USD/MXN trade settles two business days later. For those two days your cash is committed, earns nothing, and you carry the risk that the rate moves between order and settlement. Someone absorbs that risk, and the bank charges for it inside the spread.
Move USD 50 million a month in trades spread across the month and T+2 means several million dollars permanently in transit. If you had to borrow that on a credit line, the cost would have a line item. Because it comes out of working capital, nobody measures it.
A stablecoin conversion that settles in one to two minutes removes the money in transit. The price you accept is the price you settle at, in the same minute. Piece 01 in this series follows a USD 10 million trade down both roads, with timestamps.
How much do companies pay to convert pesos to dollars in Mexico?
There is no public benchmark for this market, so what follows is what Rio sees in the trades it executes in Mexico, not an industry statistic. On corporate peso-dollar conversions, the all-in cost against the market rate is usually in the tens of basis points. Rio's largest-volume clients trade in single digits.
Put numbers on it. A fintech converting USD 20 million a month at 25 basis points all-in leaves USD 50 thousand a month in the spread, USD 600 thousand a year. The same fintech at 5 basis points pays USD 10 thousand a month. The difference, USD 480 thousand a year, is the cost of never having run the test above.
How many basis points of improvement justify switching FX provider?
There is no rule of thumb. It is arithmetic: each basis point of improvement, times your monthly volume, times twelve. If that does not cover the cost of migrating, integrating and clearing compliance again, stay where you are.
| Monthly volume | 5 bps | 10 bps | 25 bps | 50 bps |
|---|---|---|---|---|
| USD 1 million | 6,000 | 12,000 | 30,000 | 60,000 |
| USD 5 million | 30,000 | 60,000 | 150,000 | 300,000 |
| USD 20 million | 120,000 | 240,000 | 600,000 | 1,200,000 |
| USD 50 million | 300,000 | 600,000 | 1,500,000 | 3,000,000 |
Against that saving, count the cost of change: engineering time, onboarding and compliance with a new counterparty, and the weeks of running two providers side by side. At USD 1 million a month, ten basis points rarely cover it. At USD 20 million, five can. Same basis points, opposite decisions.
What to ask an FX provider so quotes are comparable
Ask every provider the same thing, the same day, for the same amount. If each answers in a different format, you have nothing to compare.
- The market rate and the spread, separately. Not one blind number.
- The all-in cost in basis points against that market rate.
- Whether network and fiat fees are inside the number or billed apart.
- Whether the price is firm, and for how long, or only indicative.
- Up to what size it holds without moving.
- When it settles, T+2, T+1 or minutes, and how much cash sits in transit meanwhile.
- How it changes outside New York hours and on weekends. Piece 03 is about that.
A quote you cannot split into market rate plus spread is not comparable with any other. Full stop.
How Rio prices conversion between pesos and USDC
Four things, and you can check all four with the measurement above.
One number. Every quote is an all-in price against the live market rate, with the market rate and the spread shown separately. No taker fee, no separate fiat fee. The spread in the quote is the whole cost.
Firm for the full amount. The quote can be executed for the quoted size for about ten seconds. No re-quote at confirmation, no last look.
Single digits at institutional volume. Rio's largest clients trade in single-digit basis points against the market rate. Pricing is agreed by volume and corridor, not posted as a tariff.
Minutes, not T+2. Stablecoin to pesos over SPEI, or pesos to stablecoin, in one to two minutes, seven days a week. The money in transit leaves your balance sheet.
For large tickets or known payment dates there is also TWAP execution, forwards, and an overdraft that lets you settle your side up to three days after receiving the local currency. Details in the developer docs.
FAQ
What is a basis point?
One hundredth of one percent. A hundred basis points is one percent. On a million dollars, one basis point is a hundred dollars. Institutional FX is negotiated in basis points rather than percentages because at USD 20 million a month, the gap between 5 and 25 basis points is USD 480 thousand a year.
How do I calculate the all-in cost of a trade?
Divide the pesos you delivered by the dollars you received to get the rate you really got, then compare it with the market rate at the moment of the trade. The gap, in basis points, is your all-in cost. Use the exact time of execution, not the day's close.
Why do my bank and my provider show me the same exchange rate?
Because they are almost certainly showing you a reference for the day, not the price they executed at. Two independent counterparties almost never execute at the same price to the fourth decimal. Matching rates mean one quote passed along, not competition.
Is cash in transit a real cost?
Yes. A two-day settlement cycle on recurring flow keeps a permanent balance outside your working capital, and it leaves the FX risk between order and settlement with you. The cost is invisible only because it is paid in lost opportunity rather than fees.
Does Rio publish its spreads?
No. The price depends on volume, corridor and market conditions at the moment of the trade, so a posted tariff would mislead. What Rio does give you is the market rate and the spread separately on every quote, which is the only thing that makes one provider comparable with another.
What is Rio?
Rio is stablecoin FX infrastructure for Latin America. It provides liquidity, conversion and payout to local rails in Mexico, Colombia and Peru for fintechs and enterprises, with all-in pricing against the market rate, firm quotes for the full amount and settlement in minutes. Rio processes USD 12 billion in annualized volume.
In Mexico, FX services are provided by Rampa Blockchain, S.A.P.I. de C.V. Rio is a technology company, not a bank, and does not take deposits.
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