When pricing a SaaS product for international markets, founders must decide whether to charge exclusively in US Dollars (USD) or localized currencies (EUR, GBP, JPY). While local currency options increase conversion rates, they introduce exchange rate risks.
When converting prices, developers often check search engine conversion values. However, the value displayed on Google is the mid-market rate, which is not the price you will receive in your bank account.
This guide explains how mid-market rates work and how to handle exchange rates when pricing.
1. What is the Mid-Market Rate?
The mid-market rate (also called the interbank rate) is the midpoint between the buy and sell prices of two currencies on the global currency markets. It is the real, un-marked-up rate used by banks to trade currency between themselves.
Why You Don't Get the Mid-Market Rate
When you receive international payments or transfer money abroad:
- Processor Spreads: Payment processors (like Stripe or Dodo Payments) charge currency conversion fees (typically 1–2% above the mid-market rate).
- Bank Markups: Traditional banks add a markup to the conversion rate, which is often hidden inside the total transaction cost.
Always account for a 1.5–3% fee buffer when converting localized prices back to your primary business currency.
2. Best Practices for International SaaS Pricing
To mitigate exchange rate risks:
- Fixed Localized Pricing: Instead of converting prices dynamically on every load (which makes pricing look inconsistent), set fixed regional prices (e.g. $99 USD, €99 EUR, £89 GBP) that buffer average exchange fluctuations.
- Accept Major Currencies directly: Configure your payment processor to settle major currencies directly into matching currency bank accounts to avoid conversion loops.
3. Querying Current Exchange Values
To check mid-market rates for planning pricing configurations, you can run a query.
Use the Currency Converter to look up exchange values. It pulls rates from reference data feeds, converts amounts, and shows baseline interbank values to help you structure your pricing tiers.
- Check exchange rates: Currency Converter