Well, they are not charging a fee - they are offering a price. If you go and buy a pound of oranges, then usually also no fee is being charged, but that doesn't and shouldn't mean that they are selling the oranges for the same price as wholesale.
And nobody (including you, Floyds or Jesus) can get mid-market rate for an immediate exchange of $1000:
1) The rate that you can get for a deal right now is different than the rate of the deal you made a minute ago - since the market is moving, but the mid-market rate is based on previous deals; so depending on rise/fall you might not get anyone to accept your deal at that price;
2) You can get market rates for market-sized deals, and that is measured in round millions; if you want to buy 1000 EUR, then that rightly deserves a markup of wholesale/retail;
3) In the common forex market, you don't get your funds immediately; spot deals are usually settled within 2 business days. If you want immediate money - then that is a different product with a different price.
Aren't "market-sized" deals measured in millions because banks are making one deal to cover lots of smaller deals that they've made with their own customers?
If someone can cut out the middle-man and let the small deals trade with each other directly, there is no reason why people can't get the mid-market rate for a trade of $100 never-mind $1000.
And nobody (including you, Floyds or Jesus) can get mid-market rate for an immediate exchange of $1000:
1) The rate that you can get for a deal right now is different than the rate of the deal you made a minute ago - since the market is moving, but the mid-market rate is based on previous deals; so depending on rise/fall you might not get anyone to accept your deal at that price;
2) You can get market rates for market-sized deals, and that is measured in round millions; if you want to buy 1000 EUR, then that rightly deserves a markup of wholesale/retail;
3) In the common forex market, you don't get your funds immediately; spot deals are usually settled within 2 business days. If you want immediate money - then that is a different product with a different price.