Mark-up

What it means. Mark-up is a universal commercial concept: the amount a seller adds to their cost to make a profit. If a product costs a certain amount to provide (its base price) and is sold for more, the difference is the mark-up. It can be expressed as a fixed amount or as a percentage of the base, and it is how businesses across every sector earn their margin. Understanding the mark-up on something is understanding how much of its price is cost and how much is margin.

In payments and FX. In financial services, mark-up often appears as a spread rather than an explicit fee. In currency conversion, for instance, the mark-up is the gap between the market exchange rate and the rate a customer actually receives; in payments, it may be a margin added per transaction. Because these mark-ups are sometimes buried in the price rather than shown separately, transparency about the mark-up applied is an important measure of fair pricing — a low headline fee can conceal a wide spread, and a customer only understands the true cost by looking at the mark-up as well as any stated fee.

Where it fits. Mark-up is the counterpart to base price: base price plus mark-up equals the final price. In arrangements where one party supplies a capability at a base price and another sells it on, the reseller's mark-up is their revenue. Understanding mark-up — especially where it is expressed as a spread rather than a stated fee — is key to understanding the true cost of a financial product, and to comparing providers fairly, since the cheapest headline rate is not always the cheapest once the mark-up is included.