Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited.

Why do financial institutions charge so much to convert currency?
Mainly because they can.  Yes, there is a cost for banks to execute such transactions, and yes, there is a cost to cover the implied risks, but it is far from 3 or 4%. There are banks that charge a flat rate of less than 30$ (and no percentage), so for larger amounts, it is worth shopping around. Note that for smaller amounts, which are the majority of personal transactions, that is probably about as, if not more expensive, than paying 3% - below 1000$, 3% is less than 30$. So charging a percentage is actually better for people that want to transfer smaller amounts.