GLOSSARY
Transaction Cost Analysis (TCA)
Comparing executed FX rates against the mid-market rate at the time of trade to measure the spread actually paid. Standard practice for large corporates; adopted by ~23% of mid-market companies.
Transaction Cost Analysis (TCA) in FX measures the spread between the rate you actually paid on a conversion and the mid-market rate at the trade timestamp. Done at scale across every conversion, it produces an aggregate spread number per provider, per corridor, per ticket size — the basis for negotiating better terms or routing flows differently.
Why it matters
AFP data shows ~23% of mid-market companies do TCA, vs. near-100% at large corporates. The gap is structural: without TCA, "our bank gives us a good rate" is unfalsifiable. With it, the spread is a line item — and one that compounds across volume.
Related terms
- Mid-market Rate
- FX Spread
- Forward Hedging